On January 6, 2026, the New York State Assembly introduced Bill A09452, a proposed Amendment (the “Amendment”) that would materially revise the Trapped at Work Act (the “Act”) if adopted. For background on the Act as originally enacted, see our prior client alert summarizing the Act’s key provisions.
Although the Act prohibiting employment promissory notes, also referred to as “stay-or-pay” or training repayment agreements, remains in effect, the pending bill would implement significant changes to both the scope and the effective date of the Act. We summarize these proposed amendments below.
Delayed Enforcement of the Act
One significant change in the Amendment is a revised effective date. The Amendment replaces the Act’s “effective immediately” language with a provision stating that the law will take effect “one year after it shall have become law,” establishing a new effective date of December 19, 2026. This change provides employers with additional time to review, evaluate, and align new and existing agreements before the law takes effect.
New Exception Concerning “Transferable Credentials” / Tuition Reimbursement
The Amendment would permit employers to seek reimbursement for certain costs associated with “transferable credentials,” which are defined as “any degrees, diplomas, licenses, certificates, or documented evidence of skill proficiency” that are widely recognized by employers in the relevant industry and “enhance the employee’s employability with other employers in the relevant industry.” Excluded from this definition are employer-specific trainings, including internal policies and equipment “unique” to the employer, as well as legally mandated safety compliance trainings under federal, state, or local law.
To qualify for this exception, the arrangements must meet stringent requirements:
- Separate Agreement – The reimbursement obligation must be set forth in a written agreement separate and distinct from the employment contract;
- Voluntary Participation – The agreement must not be a condition of employment;
- Cost Disclosure and Cap – The repayment amount must be disclosed in advance and may not exceed the employer’s actual costs for tuition, fees, and required materials;
- Prorated Repayment – Any repayment obligation must be prorated with no acceleration if the employee separates from employment; and
- Termination Protection – No repayment is required if the employee is terminated, except in cases involving misconduct.
Refinement of Existing Definitions and Penalties
The Amendment also refines several key definitions. Importantly, it replaces the term “worker” with “employee,” defined as “any person employed for hire by an employer in any employment,” thereby limiting the Act’s reach to traditional employment relationships. In addition, the Amendment removes specific references and examples of “employment promissory notes.”
Although the Act still excludes a private right of action, the Amendment would expressly permit employees to file formal complaints with the Commissioner of the New York State Department of Labor. When assessing penalties under the Act, the Commissioner would be required to consider a range of factors, including the size of the employer’s business, good-faith compliance efforts, the severity of the violation, and any history of prior violations.
Since the Amendment is still pending, the current version of the Act remains in effect, governing relevant employment practices. Employers should note these important changes and keep them in mind when reviewing or amending existing repayment arrangements.
Hinckley Allen is monitoring developments closely and will update this alert if and when any amendments are adopted.
