New York state has recently passed a new provision called the Trapped at Work Act. This law has been enacted to protect employees from being stuck at one job through monetary employment requirements. This new law prevents employers from including in any job offer or employment document a clause demanding restitution from an employee if that employee fails to remain employed for a certain period of time after hire (such as clauses pertaining to “reimbursement for training”)*. The law protects employees, independent contractors, and interns.

There are several exceptions to the reimbursement prohibition. The most notable ones are:

- Repayment of payroll advances (unless those advances were made for “training purposes”).

- Payment for employer‑provided property sold or leased to the worker.

- Programs agreed to under a collective bargaining agreement.

The new law also prohibits employers from even entering into such prohibited agreements on or after the effective date of this law (December 19, 2025). Employers should review all contracts, agreements, and other documents given to employees to ensure that there are no repayment requirements tied to employment. Employers should especially review their policies on equipment and ensure that no attempts to enforce reimbursement of lost equipment are made to a departing employee.

You can read the entire law HERE.

UPDATE: Governor Kathy Hochul has signaled an openness to consider a legislative amendment to this law which would alter several key aspects. Most importantly, the amendment would change the effective date to December 15, 2026, providing employers with an extra year to comply with the requirements of the law. FNA Insurance Services, Inc. will continue to monitor the legislative process and update this document when the proposed amendment becomes law.

* The law specifically prohibits “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."