Amendments to New York “Trapped at Work Act” Pass Legislature

Update: On February 13, 2026, Governor Hochul signed into law the below amendments to New York's Trapped at Work Act.

Seyfarth Synopsis: The bill amending New York’s Trapped at Work Act (“Act”) has now passed both chambers of the New York State Legislature.  When Governor Hochul signs the legislation, as expected, various clarifications will become law, and the effective date will be delayed to December 19, 2026.

As previously discussed here, New York’s Trapped at Work Act (“Act”) prohibits agreements, entered into as a condition of employment, that require workers to repay money if they leave employment before a stated period of time. 

When Governor Hochul signed the Act into law in December 2025, she simultaneously announced an agreement with the State Legislature to enact amendments to clarify the scope of the Act.

A bill implementing those amendments was promptly introduced soon after the new legislative session began in early January.  On January 21, 2026, the Assembly passed the bill, and the Senate did so on January 28.  Once the bill is formally transmitted to Governor Hochul—which is expected imminently—she is certain to sign it. 

As previously discussed here, the amendments will narrow and clarify the Act in a manner that will ameliorate many of the employer community’s frustrations.  For example, the amendments provide:

1. A delayed effective date to December 19, 2026.
2. An exception for common compensation arrangements, subject to certain restrictions such as where the employee is terminated not for misconduct.
3. A standalone exception for tuition repayment agreements, subject to specific qualifications, including that the agreement relates to “transferable” educational credentials.
4. A narrowed definition of covered workers as “employees” instead of a term defined broadly to include independent contractors and other non-employees.
5. Detailed factors for New York Department of Labor consideration in assessing penalties and still not private right of action for employees to sue employers for violation.

 Next Steps for Employers

With the amendments all but guaranteed to take effect, employers with New York operations can breathe a sigh of relief as they will have until December 2026 to ensure their financial incentive and related clawback agreements satisfy the Act’s now-clarified provisions.  That said, such agreements face different and heightened requirements under California’s parallel law that went into effect on January 1, 2026.

As such, employers in New York and California should evaluate their bonus and other repayment agreements under these statutes and consider revisions to their current agreements and templates. 

Please reach out to the authors – or your Seyfarth attorney – with any questions.