The "Trapped at Work" Act: New York Bans Stay-or-Pay Provisions

Starting December 23, 2025, New York became one of the first states to outlaw "stay or pay" agreements — employment contracts that require workers to repay training costs, signing bonuses, or relocation expenses if they leave before a specified date. The law, formally known as the Trapped at Work Act, addresses a growing practice that effectively traps workers in jobs by holding debt over their heads.

What the Law Prohibits

Employers can no longer require workers to execute employment promissory notes — agreements that obligate the worker to repay the employer for:

• On-the-job training costs
• Orientation or onboarding expenses
• Certification programs required by the employer
• Equipment or uniform costs
• Any other job-related training or development

These provisions have been increasingly common in industries like healthcare (especially nursing), trucking, tech, and retail management, where employers invest in training and use repayment agreements to prevent turnover.

Limited Exceptions

The law allows repayment agreements only for:

• Tuition or educational expenses — actual costs of degree programs or courses at accredited institutions that provide transferable credentials (not employer-specific training)
• Voluntary education benefits — programs the worker chooses to participate in, not requirements for the job

Even these exceptions must meet strict requirements:

• The agreement must clearly state the amount owed
• The repayment obligation must be proportional (decreasing over time)
• The employee must voluntarily agree

Penalties for Violations

Employers who violate the Trapped at Work Act face:

• Civil penalties of $1,000–$5,000 per violation
• If an employer sues a worker to enforce an illegal repayment agreement, the worker can recover attorney's fees and costs
• Workers may also have defenses against collection efforts based on illegal promissory notes

Who This Helps

The workers most affected by stay-or-pay provisions are often those who can least afford to fight them:

• Nurses and healthcare workers — many hospitals and nursing homes require TRAPs (Training Repayment Agreement Provisions) that can run $10,000–$50,000
• Truck drivers — CDL training programs frequently come with repayment clauses
• Tech workers — coding bootcamps and employer-sponsored certifications often have strings attached
• Retail and service managers — management training programs with multi-year commitments

What to Do If You Signed a Stay-or-Pay Agreement

If you signed an employment promissory note before December 23, 2025:

• The law's applicability to existing agreements is still being interpreted
• Consult an attorney to evaluate whether your specific agreement is enforceable
• Many pre-existing agreements may be unenforceable on other grounds (unconscionability, lack of consideration, etc.)

If your employer is currently requiring you to sign one:

• You can refuse — requiring such agreements is now illegal
• Document the request in writing
• If your employer retaliates for refusing, that's a separate violation

The Bigger Picture

The Trapped at Work Act is part of a broader trend of states addressing economic coercion in employment. Non-compete agreements, forced arbitration clauses, and now stay-or-pay provisions are all increasingly regulated as lawmakers recognize that these contracts limit worker mobility and suppress wages.

New York's law sends a clear message: if an employer benefits from training you, the cost of that training is a business expense — not a debt to hold over your head.