New York’s Trapped at Work Act, in Effect for Now, but New Bill Aims to Amend Terms and Extend Effective Date

On January 6, 2026, the New York Assembly introduced bill A9452 (Amendment), which would substantially amend the “Trapped at Work Act” (TAWA).

As we explained here, TAWA prohibits all employers—including subsidiaries and contractors—from requiring current or prospective workers to sign employment-related promissory notes as a condition of employment.

Signed into law by Governor Kathy Hochul on December 19, 2025, TAWA went into effect immediately. However, in her approval memo, the Governor noted that the legislation contained ambiguities, including that it “would have prohibited certain voluntary tuition assistance programs that provide real benefits to their participants.” Her approval was conditioned on an agreement with the Legislature to address those concerns, resulting in introduction of the Amendment less than three weeks after the law’s enactment. The Amendment would benefit employers and employees by clarifying TAWA’s parameters.

What Will Change?

This Amendment seeks to do multiple things: clean up the definitions section of TAWA; provide more detail about what types of payments are protected and which repayment agreements may be enforceable; clarify who can bring a complaint against an employer and the penalty associated with any violation; and delay the effective date of the agreement. In practice, while TAWA is already in effect, it is likely that the effective date will be pushed forward, offering employers some reprieve and an opportunity to adjust affected policies and employment agreements.

On January 21, 2026, the Amendment passed the Assembly and made its way to the Senate. No changes were made to the originally proposed bill, though it is subject to further changes. We provide a summary of its most significant provisions below.

Revised Definitions

TAWA, as enacted, has extremely wordy definitions for an “employer,” “worker,” and “employment promissory note.” The Amendment seeks to simplify these definitions. Under the Amendment, the term “employer” would be streamlined, eliminating references to a trust or “any organized group that hires or contracts…,” but still encompassing all employers in New York State. The Amendment also proposes removing the term “worker” (and its expansive definition) from TAWA and replacing it with “employee,” defined as: “any person employed for hire by an employer in any employment.”

The Amendment also seeks to revise the definition of “employment promissory note” to “any instrument, agreement, or contract provision that requires an employee to pay the employer…a sum of money if the employee’s employment relationship with a specific employer terminates before the passage of a stated period of time.” This revision eliminates language requiring that a worker “leave” employment.

Importantly, the Amendment would add a new term to TAWA: “transferable credential.” Essentially any educational requirement widely recognized across employers as a necessary qualification of employment, independent of the specific employer’s business practices, this new term serves to provide clarity as to what type of training qualifies for protection under TAWA. For example, all hospitals, regardless of their size, location, or type, require physicians to hold a medical degree and recognize board certification as evidence of mastery in a specialized field. Such qualifications would be considered a “transferable credential” under the Amendment.

The Amendment also places important limitations on what qualifies as a “transferable credential.” The exclusions include employer-specific, non-transferable training, such as instruction on proprietary operations and general training, as well as any training mandated by law, such as workplace safety training or harassment prevention.

Expanded Carve-Outs to Permit Recoupment

The Amendment overhauls TAWA’s provisions regarding what types of agreements employers may enter into with employees, adding two categories for exclusion from the law’s general prohibition on employment promissory notes to those already contained in the law.

First, the Amendment would allow for employers to obtain reimbursement for specified expenses paid toward a “transferable credential” – such as tuition and related costs, under specified conditions, requiring:

• a written agreement that is separate from any contract for employment;
• that the employee’s acquisition of the transferable credential is not a condition of employment;
• a specific repayment amount agreed to before the employee signs the agreement, no greater than the actual cost to the employer;
• provision of a prorated repayment amount during any required employment period that is proportional to the total amount and length of the required employment period and does not include a “balloon” payment or accelerated repayment in the event the employee separates from employment; AND
• a proviso that the employee is not required to repay the amount if terminated, unless terminated for misconduct.

The second category of agreements the Amendment seeks to permit are those that allow an employer to recoup various forms of incentive pay that is commonly subject to clawbacks, such as sign-on incentives, relocation assistance, or other non-educational inducements that are not tied to specific job performance. For these repayment agreements, an employee would not have to repay the employer if terminated for any reason other than misconduct or if the duties or requirements of the job were misrepresented to the employee.

Clarified Enforcement Provisions

The Amendment, if approved, would clarify that current or prospective employees may file a complaint with the New York State Department of Labor (NYSDOL), something not explicitly stated in the law. The Amendment also expands on factors for assessment of penalties, directing that any penalty should be based on the size of an employer, the good faith basis of an employer to comply with the law, the gravity of a violation, and whether an employer has a history of similar violations.

Effective Date

TAWA went into effect the day that Governor Hochul signed it—December 19, 2025. The Amendment proposes changing the effective date to “one year after it shall have become law,” or December 19, 2026. This planned extension of the deadline for compliance suggests that the NYSDOL is unlikely to take up TAWA enforcement action, despite the fact that the original law has been in effect for more than a month already.

What Does This Mean?

The Assembly has now adopted the Amendment, and it now sits with the Senate. If passed, it will require the Governor’s signature. All of these approvals are expected and will probably occur sometime in the next two months, pursuant to Albany’s standard operating procedures for Chapter Amendments. But anything can happen! We will continue to monitor all developments associated with TAWA and, in the meantime, encourage New York employers to review existing agreements and consider how recent and anticipated adjustments in the law apply.

Epstein Becker Green Staff Attorney Elizabeth A. Ledkovsky contributed to this article.