New York’s ‘Trapped at Work’ Law Now in Effect, Banning Stay‑or‑Pay Promissory Notes

Overview

• Governor Kathy Hochul signed Senate Bill S4070B on December 19, 2025, putting the Trapped at Work Act into immediate effect as an amendment to the state labor law.
• The statute deems employment promissory notes unconscionable and unenforceable, broadly covering any requirement to repay money for leaving early, including training reimbursements provided by the employer or a third party.
• The law preserves narrow exceptions for payroll advances unrelated to training, repayment for employer‑provided property that was leased or sold, sabbatical leave agreements for educational personnel, and programs established through collective bargaining.
• Enforcement rests with the New York State Department of Labor, which may assess civil penalties of $1,000 to $5,000 per violation; there is no private right of action, though workers who successfully defeat enforcement can recover attorneys’ fees.
• Guidance urges employers to review and revise templates, stop collection or enforcement of covered notes, and train HR teams, with retention bonuses still permitted and contract clauses severable, while questions about retroactivity await clarification.