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On February 13, 2026, Governor Kathy Hochul signed into law <a href="https://legislation.nysenate.gov/pdf/bills/2025/A9452" target="_blank" rel="noreferrer noopener">Assembly Bill A9452</a> which amends the recently enacted Trapped at Work Act (the “Act”). We previously discussed the originally passed and enacted version of the Act in our recent <a href="https://www.vedder.com/insights-events/new-york-enacts-trapped-at-work-act-to-ban-employment-promissory-notes/" target="_blank" rel="noreferrer noopener">blog post</a>. These new amendments delay the Act’s effective date, revise definitions for covered persons, create additional exceptions, and provide guidance on how the Act will be enforced.

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Under the original version of the Act, the ban on employment promissory notes that required employees to pay an employer for such things as training costs if the employee resigned before a certain date went into effect immediately on December 19, 2025. However, with these newly passed amendments, the effective date will now be delayed until December 19, 2026.

The prior version of the Act contained a definition of the term “worker,” which resulted in coverage under the law for employees, independent contractors, externs, interns, volunteers, apprentices, and sole proprietorships. With the new amendments, this overly broad term has been replaced with the term “employee,” which is defined as “any person employed for hire by an employer in any employment.” With this change, employers can still use promissory notes with independent contractors, externs, interns, volunteers, apprentices, and sole proprietorships.

The amendments also establish new exceptions to the Act’s general prohibition on employment promissory notes. The first exception is for bonuses, relocation assistance, and other non-educational incentives that an employer may provide as a benefit that is not related to an employee’s job performance. However, an employee would not be required to pay these back if the employer misrepresented the job requirements to the employee or the employee is terminated for a reason other than misconduct.

Additionally, there is also now an exception for agreements to repay tuitions and fees for a “transferable credential” that meets the requirements set forth in the amendment. A “transferable credential” is defined in the Act as “any degree, diploma, license, certificate, or documented evidence of skill proficiency or course completion that is widely recognized by employers in the relevant industry as a qualification for employment, independent of the employer’s specific business practices, or that provides skills or qualifications that demonstrably enhance the employee’s employability with other employers in the relevant industry.” This definition also expressly excludes any employer-specific training or mandated safety or compliance training. The agreement for repayment must also be separate from the regular employee contract. The agreement must also set out a prorated repayment schedule, cannot accelerate repayments if the employee separates from the employer, and cannot require repayments if the employee is terminated for a reason other than misconduct.

Lastly, the amendments provide additional guidance on how the Act will be enforced by the New York Department of Labor. In particular, employees do not have a private right of action and must submit their complaint to the Commissioner of Labor for determination. While the penalty for a violation remains between $1,000 and $5,000, the Commissioner is now required to consider the employer’s size, good faith compliance, and the gravity of the violation when determining the penalty that will be levied.

Again, the Act’s effective date is now delayed until December 19, 2026. Employers may continue enforcement and collection efforts for any current or former employees until such date. In the meantime, employers should continue to review their template employment agreements to ensure they do not impose a prohibited promissory note by the time the law goes into effect. Employers should also examine and separate repayment agreements that could be related to tuition for “transferable credentials” and make sure those will also come into compliance with the Act.

New York Amends Recently Enacted Trapped at Work Act that Bans Employment Promissory Notes

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