New York Legislature Introduces Chapter Amendment to Trapped at Work Act

As previously covered, the New York Legislature voted in favor of the Trapped at Work Act in July 2025. As passed by the New York Legislature, the Trapped at Work Act would broadly prohibit use of promissory notes that require workers to repay amounts to employers if they leave their jobs before staying a minimum specified period, with certain specified exceptions. On December 19, 2025, Governor Hochul signed the Trapped at Work Act into law, making it effective immediately. She noted, however, that it was “ambiguous in important respects, and would have prohibited certain voluntary tuition assistance programs that provide real benefits to their participants.” As a result, the governor signed the bill into law via a “Chapter Amendment”—a New York legislative tool whereby the governor signs a bill into law on the condition the legislature make amendments to the law as written in the next legislative session. 

On January 6, 2026, the New York State Assembly introduced a proposed chapter amendment to the Trapped at Work Act to address Governor Hochul’s concerns. If enacted, the proposed chapter amendment would significantly revise several provisions of the Act and would revise the original effective date clause so the Act would “take effect one year after it shall have become a law,” replacing the prior “immediately” language. The amendment’s substantive changes would therefore take effect on December 19, 2026.

If adopted, the amended Trapped at Work Act would maintain the prohibition on employment promissory notes, subject to newly proposed exceptions not found in the version signed on December 19, 2025. The amendment introduces an exception for tuition‑repayment agreements, permitting a separate, voluntary agreement under strict conditions: the educational credential is not a condition of employment; the amount is disclosed and capped at the employer’s actual costs; the obligation is prorated with no acceleration upon separation; and no repayment is owed if the employee is terminated, except for misconduct. The bill also defines “transferable credential” to cover degrees, diplomas, licenses, certificates, or documented skill completions that are widely recognized across the relevant industry and enhance employability beyond a single employer, while excluding employer‑specific training and mandated safety/compliance training.

If enacted, the amendment would also preserve voluntary payment for property sold or leased to employees by their employer, and clarify allowances for repayment of certain non‑educational monetary benefits provided by an employer, including bonuses and relocation assistance, subject to guardrails. Specifically, repayment would not be permitted if the employee was terminated for any reason other than misconduct or if the job was misrepresented to the employee applicant. It would direct the commissioner of labor to consider employer size, good‑faith compliance beliefs, gravity, and prior history in assessing penalties. Each affected employee or prospective employee would constitute a separate violation.

This proposed chapter amendment is similar to California’s recent legislation addressing TRAPs and stay‑or‑pay provisions, which likewise prohibits coercive repayment constructs while permitting narrowly tailored tuition repayment for portable, industry‑recognized credentials under strict conditions. 

New York’s measure remains a pending bill. While the bill signed by Governor Hochul on December 19, 2025 remains in effect, the proposed chapter amendment would represent a substantive change, and would postpone the effective date to December 19, 2026. If the proposed chapter amendment is enacted, York employers will have a meaningful runway to prepare ahead of the contemplated December 19, 2026, effective date. We will continue to monitor this developing issue, and will post key updates as they become available.