New York workers gained important protections last year when the state passed the Trapped at Work Act, prohibiting employers from using “stay-or-pay” agreements that trap employees in bad jobs. Now, a new amendment (Assembly Bill A9452) is refining how this law works—and it’s crucial to understand what’s changed.
What Is the Trapped at Work Act?
The original Trapped at Work Act banned employment promissory notes and similar provisions that force workers to pay back their employers if they leave their jobs. These arrangements—sometimes called “stay-or-pay” clauses—have been used to keep workers locked in positions even when facing poor working conditions, low wages, or better opportunities elsewhere.
What Does the Amendment Change?
The new amendment, introduced in January 2026 and signed by the Governor in February, clarifies several important aspects of the law:
1. Only Employees Will be Covered
The amendment tightens the definitions of “employer” and “worker” and clarifies what counts as an employment promissory note.
Who is a “worker”? The amendment narrows the definition of “worker” to mean “any person employed for hire by an employer in any employment.” This focuses the law’s protections on traditional employment relationships.
Who is an “employer”? The amendment aligns the definition of “employer” with other definitions used throughout New York labor law, creating consistency across employment statutes.
What is an “employment promissory note”? The amendment clarifies what counts as an employment promissory note—the type of agreement the law prohibits. While the amendment doesn’t provide the exact new language, this clarification helps distinguish between unlawful stay-or-pay arrangements (which trap workers) and legitimate business agreements.
2. New Category: “Transferable Credits”
The amendment creates a specific definition for “transferable credits”—degrees, diplomas, licenses, certificates, or other credentials that are widely recognized, independent of your specific employer, and genuinely improve your job prospects across the industry. This does NOT include employer-specific training or mandatory safety and compliance training.
3. Limited Exceptions
While the law still protects workers from most stay-or-pay arrangements, the amendment establishes narrow exceptions where repayment may be required:
- Education/Credentials: Employers can require repayment for transferable credits (like a nursing degree or professional license) ONLY if:
- The agreement is separate from your employment contract
- You’re not required to get the credential to keep your job
- Repayment is capped at actual costs (tuition, fees, materials)
- The repayment amount decreases over time (prorated)
- You don’t have to repay if you’re fired for any reason other than misconduct
- Bonuses and Relocation: Financial bonuses or relocation assistance can be subject to repayment, BUT not if you were fired for reasons other than misconduct or if your employer misrepresented your job duties.
- Property: Items you voluntarily purchased or leased from your employer may require repayment.
4. How to File a Complaint
The amendment establishes a formal complaint process through the New York Department of Labor for employees who believe their employer is violating the law.
5. Delayed Start Date
The amendment pushes back the effective date of the Trapped at Work Act to one year after enactment, giving employers more time to adjust.
What This Means for You
The bottom line: New York is still protecting workers from being trapped in jobs through unfair financial penalties. The amendment simply clarifies legitimate exceptions while maintaining strong protections for employees.
If you’re facing a stay-or-pay clause or believe your employer is requiring unlawful repayment, you have rights. The new complaint process makes it easier to challenge violations.
