On December 19, 2025, New York Governor Kathy Hochul signed into law Senate Bill S4070B, otherwise known as the Trapped at Work Act (“the Act”). The Act, an amendment to the New York Labor Law, bans promissory notes that require employees to repay their employer for training expenses if they leave their employment before the note period expires.
In particular, the Act provides that the signing 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.” It defines employment promissory notes broadly to include “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.” This definition is inclusive of any agreement “which states such payment of moneys constitutes reimbursement for training provided to the worker by the employer or by a third party.”
Even with this broad definition, the Act expressly excludes agreements related to: (1) repayment for payroll advances unrelated to the employee’s training, (2) repayment for property leased or sold to the employee; (3) sabbatical leave for educational personnel; and (4) programs agreed to under a collective bargaining agreement. Additionally, while an employment promissory note is unenforceable, its inclusion within a larger employment agreement will not render the entire agreement unenforceable. Also, the Act does not prohibit employers from offering “stay” or “retention” bonuses to employees, which provide for certain payments to employees when they reach a specified duration of employment.
Employers found to be in violation of the Act may be subject to a civil penalty from the New York Department of Labor of between $1,000 and $5,000 for each violation. Employees who successfully defend against an employer’s attempt to enforce void promissory note are permitted recovery of their attorneys’ fees. However, there is no private right of action provided to employees for an employer’s violation of the Act.
The Act went into effect immediately on December 19, 2025. Employers should review their template employment agreements to ensure they follow the new law and are not seeking to impose prohibited promissory notes on employees. Employers should also discontinue enforcement and collection efforts based on any prohibited employment promissory notes for any current or former employees.