Recent legislative developments have brought substantial changes to the newly enacted Trapped at Work Act (TAWA). Originally signed into law on December 19, 2025, the Act was designed to eliminate “stay-or-pay” agreements, provisions that require workers to repay training or onboarding costs if they leave their jobs within a certain timeframe.
Following concerns regarding the Act’s broad scope and immediate implementation, the New York State Legislature introduced and passed Assembly Bill A9452. This amendment, signed by the Governor on February 13, 2026, narrows the law’s application and introduces critical safe harbors for common employer sponsored benefits.
Key Modifications Under the Amendment
The amendments refine the Act in several ways that alleviate many employer concerns while maintaining core worker protection.
- Delayed Effective Date. The effective date of the Act has been pushed back one year to December 19, 2026. This provides a much-needed transitional period for employers to review and update existing agreement templates.
- Narrowed Scope of Covered Individuals. The law now applies strictly to employees rather than the previously broad category of workers. This change excludes independent contractors, interns, volunteers, and apprentices from the Act’s prohibitions.
- Safe Harbor for Transferable Credentials. The law permits repayment of educational expenses associated with transferable credentials only if strict statutory criteria are met. Employers should ensure that any reimbursement agreement is voluntary, separately documented, reflects actual costs, and complies with the Act’s proration and structural requirements.
- Exemptions for Common Incentives. The amendment explicitly permits repayment agreements for sign-on bonuses, relocation assistance, and other non-educational incentives, so long as the employee is not terminated without cause or due to job misrepresentation.
Prohibited Training and Enforcement
Even with these revisions, specific types of “stay-or-pay” arrangements remain strictly prohibited.
| Prohibited Reimbursement | Description |
| Employer-Specific Training | Instruction on proprietary software, internal systems, or unique business processes. |
| Legally Mandated Training | Compliance training required by law, such as OSHA safety certifications or sexual harassment prevention. |
| Non-Transferable Skills | Any training that does not demonstrably enhance the employee’s general employability outside the organization. |
Enforcement
While the law does not create a private right of action, employees may now file complaints directly with the New York State Department of Labor (DOL). Penalties for non-compliance remain between $1,000 and $5,000 per violation, though the DOL must now consider factors such as employer size and good-faith compliance efforts when assessing fines.
Next Steps for Employers
To ensure compliance before the new 2026 deadline, employers should:
- Inventory All Repayment Clauses: Review offer letters and bonus agreements to identify any “stay-or-pay” language that may now be considered void.
- Draft Standalone Agreements: For tuition or relocation benefits, ensure repayment obligations are documented in a separate, voluntary agreement rather than bundled into an employment offer.
- Implement Prorated Schedules: Ensure any repayment schedule is prorated evenly over time (for example, decreasing monthly in equal amounts) and does not impose balloon payments or immediate repayment of the entire remaining balance upon separation.
- Consult Legal Counsel: Given the complexity of defining transferable credentials, seek expert advice before enforcing existing notes or drafting new ones.
