NY Trapped at Work Act: What Employers Should Know in 2026
As predicted in our November 2025 issue of Mobility Trends and Hot Topics, legislative restrictions on employee repayment agreements continue to expand beyond California. New York’s Trapped at Work Act is part of that broader trend.
The Act, originally set to take effect December 19, 2025, generally prohibits employment-related repayment agreements — including provisions requiring employees to repay training costs, bonuses, relocation expenses, or similar payments as a condition of separation — regardless of whether repayment is triggered by resignation or termination.
However, the statute created significant uncertainty regarding tuition reimbursement, relocation expense repayment, and certain bonuses not tied to performance (e.g., signing bonuses).
Amendment Signed Into Law
On February 13, 2026, Governor Kathy Hochul signed amendments to the Trapped at Work Act into law. These amendments:
- Move the effective date to December 19, 2026, providing employers additional time to evaluate and revise policies; and
- Create a limited exception for relocation-related costs, enforceable under specific statutory circumstances.
While the statute includes an exception for certain relocation expenses, the exception is narrowly defined and subject to specific conditions. Employers should carefully review the statutory language and ensure any repayment provision satisfies all requirements before relying on the exception.
What Employers Should Do Now
Although the amendments provide clarity and additional time, employers should proceed cautiously.
- Repayment provisions should be reviewed with legal counsel to ensure compliance under the amended statute.
- Existing offer letters, promissory notes, and relocation policies should be audited for alignment with the revised law.
- Employers should avoid broadly drafted repayment provisions that could fall outside the statutory exception.
Violations may subject employers to civil penalties of up to $5,000 per violation imposed by the New York State Department of Labor, as well as attorney’s fees. Employees sued to enforce a prohibited repayment provision may also be entitled to attorneys’ fees.
A Growing Trend to Monitor
New York joins a growing list of states scrutinizing employee repayment agreements. We continue to monitor legislative activity nationwide and are watching Washington, Vermont, Nevada — and potentially Ohio and Massachusetts — for similar developments. Colorado, Minnesota, Oregon, and Pennsylvania have also expressed interest in related measures.
Relocation repayment structures are increasingly under legislative review. Employers should proactively evaluate their mobility policies to mitigate risk while maintaining program integrity.
We will continue to provide updates as further guidance or regulatory clarification becomes available.
About NEI Global Relocation
NEI is a certified Women’s Business Enterprise headquartered in the U.S., with in-region offices and teams in Switzerland and Singapore. As a full-service global relocation and assignment management company, we partner with clients around the world to provide consultative guidance and tailored solutions. NEI services more than 200 clients, including many Fortune 500 and Fortune 1000 companies, and delivers strategic insights, benchmarking, and trend analysis that help clients make informed, forward-looking mobility decisions.
NY Trapped at Work Act: What Employers Should Know in 2026
As predicted in our November 2025 issue of Mobility Trends and Hot Topics, legislative restrictions on employee repayment agreements continue to expand beyond California. New York’s Trapped at Work Act is part of that broader trend.
The Act, originally set to take effect December 19, 2025, generally prohibits employment-related repayment agreements — including provisions requiring employees to repay training costs, bonuses, relocation expenses, or similar payments as a condition of separation — regardless of whether repayment is triggered by resignation or termination.
However, the statute created significant uncertainty regarding tuition reimbursement, relocation expense repayment, and certain bonuses not tied to performance (e.g., signing bonuses).
Amendment Signed Into Law
On February 13, 2026, Governor Kathy Hochul signed amendments to the Trapped at Work Act into law. These amendments:
- Move the effective date to December 19, 2026, providing employers additional time to evaluate and revise policies; and
- Create a limited exception for relocation-related costs, enforceable under specific statutory circumstances.
While the statute includes an exception for certain relocation expenses, the exception is narrowly defined and subject to specific conditions. Employers should carefully review the statutory language and ensure any repayment provision satisfies all requirements before relying on the exception.
What Employers Should Do Now
Although the amendments provide clarity and additional time, employers should proceed cautiously.
- Repayment provisions should be reviewed with legal counsel to ensure compliance under the amended statute.
- Existing offer letters, promissory notes, and relocation policies should be audited for alignment with the revised law.
- Employers should avoid broadly drafted repayment provisions that could fall outside the statutory exception.
Violations may subject employers to civil penalties of up to $5,000 per violation imposed by the New York State Department of Labor, as well as attorney’s fees. Employees sued to enforce a prohibited repayment provision may also be entitled to attorneys’ fees.
A Growing Trend to Monitor
New York joins a growing list of states scrutinizing employee repayment agreements. We continue to monitor legislative activity nationwide and are watching Washington, Vermont, Nevada — and potentially Ohio and Massachusetts — for similar developments. Colorado, Minnesota, Oregon, and Pennsylvania have also expressed interest in related measures.
Relocation repayment structures are increasingly under legislative review. Employers should proactively evaluate their mobility policies to mitigate risk while maintaining program integrity.
We will continue to provide updates as further guidance or regulatory clarification becomes available.
About NEI Global Relocation
NEI is a certified Women’s Business Enterprise headquartered in the U.S., with in-region offices and teams in Switzerland and Singapore. As a full-service global relocation and assignment management company, we partner with clients around the world to provide consultative guidance and tailored solutions. NEI services more than 200 clients, including many Fortune 500 and Fortune 1000 companies, and delivers strategic insights, benchmarking, and trend analysis that help clients make informed, forward-looking mobility decisions.
NY Trapped at Work Act: What Employers Should Know in 2026
As predicted in our November 2025 issue of Mobility Trends and Hot Topics, legislative restrictions on employee repayment agreements continue to expand beyond California. New York’s Trapped at Work Act is part of that broader trend.
The Act, originally set to take effect December 19, 2025, generally prohibits employment-related repayment agreements — including provisions requiring employees to repay training costs, bonuses, relocation expenses, or similar payments as a condition of separation — regardless of whether repayment is triggered by resignation or termination.
However, the statute created significant uncertainty regarding tuition reimbursement, relocation expense repayment, and certain bonuses not tied to performance (e.g., signing bonuses).
Amendment Signed Into Law
On February 13, 2026, Governor Kathy Hochul signed amendments to the Trapped at Work Act into law. These amendments:
- Move the effective date to December 19, 2026, providing employers additional time to evaluate and revise policies; and
- Create a limited exception for relocation-related costs, enforceable under specific statutory circumstances.
While the statute includes an exception for certain relocation expenses, the exception is narrowly defined and subject to specific conditions. Employers should carefully review the statutory language and ensure any repayment provision satisfies all requirements before relying on the exception.
What Employers Should Do Now
Although the amendments provide clarity and additional time, employers should proceed cautiously.
- Repayment provisions should be reviewed with legal counsel to ensure compliance under the amended statute.
- Existing offer letters, promissory notes, and relocation policies should be audited for alignment with the revised law.
- Employers should avoid broadly drafted repayment provisions that could fall outside the statutory exception.
Violations may subject employers to civil penalties of up to $5,000 per violation imposed by the New York State Department of Labor, as well as attorney’s fees. Employees sued to enforce a prohibited repayment provision may also be entitled to attorneys’ fees.
A Growing Trend to Monitor
New York joins a growing list of states scrutinizing employee repayment agreements. We continue to monitor legislative activity nationwide and are watching Washington, Vermont, Nevada — and potentially Ohio and Massachusetts — for similar developments. Colorado, Minnesota, Oregon, and Pennsylvania have also expressed interest in related measures.
Relocation repayment structures are increasingly under legislative review. Employers should proactively evaluate their mobility policies to mitigate risk while maintaining program integrity.
We will continue to provide updates as further guidance or regulatory clarification becomes available.
About NEI Global Relocation
NEI is a certified Women’s Business Enterprise headquartered in the U.S., with in-region offices and teams in Switzerland and Singapore. As a full-service global relocation and assignment management company, we partner with clients around the world to provide consultative guidance and tailored solutions. NEI services more than 200 clients, including many Fortune 500 and Fortune 1000 companies, and delivers strategic insights, benchmarking, and trend analysis that help clients make informed, forward-looking mobility decisions.
