If you’ve ever felt stuck in a job because your employer threatened to make you pay thousands of dollars if you left, New York’s new “Trapped at Work Act” is designed to protect you. This groundbreaking legislation prohibits employers from trapping workers in their jobs through financial penalties disguised as “training repayment agreements.”
The Story That Sparked the Law
As Assemblymember Phil Steck explained uring Assembly floor debate, he introduced this legislation after a troubling experience with one of his constituents who was an esthetician. The constituent went to beauty school, got all the training she needed to do her job, and got her first job with a particular employer. She signed an agreement saying that she would pay $5,000 for being trained on the job when, in fact, there was no training on the job. When the job wasn’t as promised, she decided to leave. Her former employer sued her. She had to hire a lawyer to defend herself and ended up with a $5,000 judgment, Steck recounted. The case worked out negatively for his constituent—she incurred significant attorney’s fees and was still stuck with the $5,000 judgment. This was money she owed for training that never actually happened.
This constituent’s story illustrates a much broader problem: workers desperate for a job sign these agreements without fully understanding the legal trap they’re walking into. Then, even when the job doesn’t work out or the employer fails to deliver on promises, workers face lawsuits and devastating financial penalties simply for trying to leave.
What Is the Trapped at Work Act?
The Trapped at Work Act, passed as Senate Bill 4070 and Assembly Bill 584, amends New York’s labor law to ban “employment promissory notes”—contracts that require workers to pay their employer money if they leave their job before a certain period of time. These agreements often force employees to reimburse their employer for training costs, sometimes totaling tens of thousands of dollars, if they resign or accept another job.
Under the new law, these agreements are now considered unconscionable, against public policy, and unenforceable.” Any employment promissory note required as a condition of employment is void and cannot be enforced against you.
What Does This Law Do?
The Trapped at Work Act provides robust protections for New York workers:
Prohibits Training Repayment Agreements: Employers can no longer require you to sign an agreement promising to repay training costs if you leave your job.
Voids Existing Agreements: Any employment promissory note executed as a condition of employment is unenforceable, meaning employers cannot collect on these debts.
Covers All Workers: The law covers more than just employees of the employer. It also protects independent contractors, interns, externs, volunteers, apprentices, and others who work for or on behalf of an employer.
Imposes Penalties on Violators: Employers who violate this law face fines between $1,000 and $5,000 for each violation. Every worker forced to sign such an agreement, or against whom an employer tries to enforce one, counts as a separate violation.
Provides Private Right of Action: If your employer requires you to sign one of these agreements or tries to enforce one against you, you can sue and recover the greater of your actual damages or $5,000, plus attorney’s fees and costs.
Important Exceptions
The law does include some reasonable exceptions. It does not prohibit agreements that require you to:
- Repay advances from your employer (unless the money was used for training)
- Pay for property your employer sold or leased to you
- Comply with terms of sabbatical leaves (for educational personnel)
- Honor agreements made as part of a collective bargaining agreement
Importantly, if an employer sends you to actual off-site training that they pay for—such as specialized technical training at an outside institute—they may be able to recover those costs if you leave shortly after. But routine on-the-job training, orientation, or shadowing at another company location doesn’t qualify for this exception.
Why Was This Law Needed?
The Scope of the Problem
These so-called “training repayment agreement provisions,” or TRAPs, have exploded in recent years. According to data Assemblymember Steck cited during the floor debate, nearly 10 percent of American workers surveyed in 2020 were covered by a training repayment agreement. The Student Borrower Protection Center estimates that major employers rely upon TRAPs in segments of the U.S. labor market that collectively employ more than one in three private-sector workers.
The problem is particularly acute for newer workers. A survey of registered nurses found that about 45 percent of nurses working for 10 years or less reported being subject to a TRAP—compared to only 9.4 percent of nurses who have been working 21 years or more.
What reportedly began in the 1990s for higher-skilled, higher-wage positions like engineers and airline pilots is now common in lower- and moderate-wage industries including healthcare, transportation, retail, and service industries. Workers in occupations like mechanics, hairstylists, bank workers, and social workers are increasingly subject to these agreements.
The Core Principles
According to the statute’s statement of public policy, “workers’ ability to freely change jobs is critical to their economic liberty as well as to creating a thriving and innovative economy in the state of New York.” When employers saddle workers with debt for leaving their jobs, it reduces professional mobility, creates obstacles to financial security, and ultimately chills the state’s economy.
The legislature also emphasized a fundamental principle: “the cost of any training required by an employer to perform a job should be borne by the employer, who ultimately stands to financially benefit from a well-trained workforce.”
A Better Approach
Instead of threatening workers with debt if they leave, the law encourages employers to use positive incentives. For example, rather than paying a $10,000 signing bonus that must be repaid if you leave within three years, an employer could offer a $5,000 bonus after two years of service and another $5,000 after three years. That approach is legal under the new law and rewards loyalty without trapping workers in bad situations.
What This Means for You
If you’re currently bound by a training repayment agreement in New York, this law may render that agreement unenforceable. If your employer is threatening to collect money from you because you want to leave your job, or if you’re being asked to sign such an agreement as a condition of new employment, you now have legal protections.
The Trapped at Work Act affirms what should always have been true: you have the right to leave your job without facing financial penalties from your employer. Your freedom to pursue better opportunities is not only essential to your economic well-being—it’s now protected by law.
