Employers Prohibited from Compelling Workers to Repay Certain Training Expenses and Signing Bonuses
In New York and across the country, it has become common practice for employers to require that new hires enter into a contractual agreement to repay certain costs to the employer, such as tuition for training, signing bonuses, relocation assistance allowance and other financial bonuses or incentives not related to performance. To an extent, that practice will no longer be permitted in New York, effective February 13, 2027, when the state’s Trapped at Work Act goes into effect. The initial statute was signed into law by Governor Kathy Hochul on December 19, 2025, with amendments signed by the governor on February 13, 2026.
What Workers Need to Know about the Trapped At Work Act
Here are the key components of the initial legislation:
- The scope of the law is broad, covering not only employees, but independent contractors, interns and volunteers
- The statute prevent an employer from forcing an employee to sign an agreement that requires repayment of costs if the worker leaves employment before a specific date. Generally, those costs including training or education, signing bonuses or relocation expenses.
- The law prevents employers from “trapping” workers by imposing financial penalties for leaving
The Scope of the Amendments to the Trapped At Work Act
The most significant change to the law focuses on who is potentially covered. Under the amendment, the description of those covered has been changed from “workers” to “employees,” defined under the statute as “any person employed for hire by an employer in any employment.” Additionally, the definition of “employer” under the law has been narrowed.
The amendments also set forth some exemptions to the ban on reimbursement agreements for tuition and signing bonuses:
- Tuition reimbursement are now permitted if
- Set forth in a written agreement
- For a program not established as a condition of employment
- The reimbursement amount does not exceed the cost to the employer
- The agreement provides for proration and does not accelerate payment upon leaving
- The agreement does not require repayment if the employee is terminated, unless for misconduct
- The repayment of signing bonuses may be compelled if the employee voluntarily resigns or is terminated for misconduct
Let the Romero Law Group Protect Your Rights as an Employee
At the Romero Law Group, PLLC, we handle a wide range of legal issues for employees on Long Island,in Westchester County, Rockland County and Orange County in New York; and across Northern New Jersey, including all matters related to sexual harassment. We offer a free initial consultation to any employee with a potential employment law dispute. To schedule an appointment, contact our offices online or call us at (631)257-5588.