On December 19 2025, New York Governor Kathy Hochul signed the “Trapped at Work Act.” This law, which is effective immediately, adds a new Article 37 to the New York Labor Law, beginning with section 1050. Its stated purpose is to prohibit reimbursement clauses or promissory notes as a condition of employment.
The law’s text provides, in part:
Beginning on the effective date of this article, no employer may require, as a condition of employment, any worker or prospective worker to execute an employment promissory note. The execution of an employment promissory note as a condition of employment is unconscionable, against public policy, and unenforceable, and any such note shall be null and void. If any such note is part of a larger agreement, the invalidity of such note shall not affect the other provisions of such agreement.
N.Y. Labor Law § 1052(1).
However, it also provides that it does not
prohibit or render void or unenforceable any agreement between a worker and an employer that:
(a) requires the worker to repay to the employer any sums advanced to such worker by the employer, unless such sums were used to pay for training related to the worker’s employment with the employer;
(b) requires the worker to pay the employer for any property it has sold or leased to such worker;
(c) requires educational personnel to comply with any terms or conditions of sabbatical leaves granted by their employers; or
(d) is entered into as part of a program agreed to by the employer and its workers’ collective bargaining representative.
N.Y. Labor Law § 1052(2).
The law defines “employment promissory note” as “any instrument, agreement, or contract provision that requires a worker to pay the employer, or the employer’s agent or assignee, a sum of money if the worker leaves such employment before the passage of a stated period of time. “Employment promissory note” includes any such instrument, agreement, or contract provision which states such payment of moneys constitutes reimbursement for training provided to the worker by the employer or by a third party.” N.Y. Labor Law § 1050(3).