The New York Legislature has passed Assembly Bill A584B, known as the “Trapped at Work Act,” which would prohibit employers from requiring employees or job candidates to sign employment-promissory notes or similar agreements as a condition of employment. The bill is awaiting delivery to Governor Kathy Hochul, and it is not yet clear whether she will sign it into law.
If enacted, the law would take effect immediately upon signing.
Key Provisions of AB A584B
- Scope of Application. Applies to both public and private employers across New York and covers employees, independent contractors, interns, apprentices, and volunteers.
- Prohibition of Promissory Notes. Prohibits agreements that require employees to repay training or other costs if they leave employment early. Such notes are deemed unconscionable, against public policy, and unenforceable (i.e., void). If embedded in a broader agreement, the rest of the agreement remains valid.
- Exceptions. The prohibition does not apply to repayment agreements for:
- Money advanced to a worker that is not for training.
- Items sold or leased to a worker, such as uniforms, tools, or equipment.
- Compensation received during sabbatical leave if the individual does not return as agreed.
- Terms permitted under a valid Collective Bargaining Agreements (CBA).
- Preservation of Other Rights. The bill’s provisions are in addition to, not in lieu of, other statutory or common law remedies, preserving existing labor protections.
Next Steps for Employers
While the bill is awaiting Governor Hochul’s signature, employers should review onboarding documents, hiring practices, and reimbursement agreements now to identify and remove any provisions that could be interpreted as an employment-promissory note. If enacted, retaining such clauses would render them void and could create legal exposure. Preparing in advance will ensure a smooth transition to compliance if the law is signed.
HR Works will continue to monitor this topic and provide updates as more information is available.
