Amd §§1050, 1052 & 1053, Lab L; amd §3, Chap of 2025 (as proposed in S.4070-B & A.584-C)
Relates to the prohibition of the use of employment promissory notes and other similar provisions; defines transferable credential; relates to the effectiveness of such provisions.
STATE OF NEW YORK
________________________________________________________________________
9452
IN ASSEMBLY
January 6, 2026
___________
Introduced by M. of A. STECK -- read once and referred to the Committee
on Labor
AN ACT to amend the labor law, in relation to prohibiting the use of
employment promissory notes and other similar provisions; and to amend
a chapter of the laws of 2025 amending the labor law relating to
enacting the "trapped at work act", as proposed in legislative bills
numbers S. 4070-B and A. 584-C, in relation to the effectiveness
thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 1050 of the labor law, as added by a chapter of the
2 laws of 2025 amending the labor law relating to enacting the "trapped at
3 work act", as proposed in legislative bills numbers S. 4070-B and A.
4 584-C, is amended to read as follows:
5 § 1050. Definitions. For purposes of this article:
6 1. "Employer" means [an individual, partnership, association, corpo-
7 ration, limited liability company, trust, government or government
8 subdivision, or any organized group that hires or contracts with a work-
9 er to work for the employer. For the purposes of this article, this term
10 shall also include any subsidiary of an employer and any individual,
11 partnership, association, corporation, limited liability company, trust,
12 government or government subdivision, or any organized group associated
13 with an employer that provides training to workers] any person, corpo-
14 ration, limited liability company, or association employing any individ-
15 ual in any occupation, industry, trade, business or service including
16 the state and its political subdivisions.
17 2. ["Worker" means an individual who is permitted to work for or on
18 behalf of an employer. The term "worker" includes an employee, independ-
19 ent contractor, extern, intern, volunteer, apprentice, sole proprietor
20 who provides a service or services to an employer or to a client or
21 customer of an employer on behalf of such employer, and an individual
22 who provides service through a business or nonprofit entity or associ-
23 ation. "Worker" does not include an individual, even if the individual
24 performs incidental service for the employer, whose sole relationship
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01084-10-6
A. 9452 2
1 with the employer is as a vendor of goods] "Employee" means any person
2 employed for hire by an employer in any employment.
3 3. "Employment promissory note" means any instrument, agreement, or
4 contract provision that requires [a worker] an employee to pay the
5 employer, or the employer's agent or assignee, a sum of money if the
6 [worker leaves such employment] employee's employment relationship with
7 a specific employer terminates before the passage of a stated period of
8 time. ["Employment promissory note" includes any such instrument, agree-
9 ment, or contract provision which states such payment of moneys consti-
10 tutes reimbursement for training provided to the worker by the employer
11 or by a third party.]
12 4. "Transferable credential" shall mean any degree, diploma, license,
13 certificate, or documented evidence of skill proficiency or course
14 completion that is widely recognized by employers in the relevant indus-
15 try as a qualification for employment, independent of the employer's
16 specific business practices, or that provides skills or qualifications
17 that demonstrably enhance the employee's employability with other
18 employers in the relevant industry. Notwithstanding the foregoing, a
19 "transferable credential" shall not include:
20 (a) Employer-specific or non-transferable training. (i) Instruction
21 regarding the employer's proprietary processes, proprietary systems,
22 internal policies, proprietary software, or proprietary equipment unique
23 to the employer, or (ii) instruction that does not qualify the employee
24 for a new occupational title, classification, or industry-recognized
25 credential and instead consists of skillful variations of general proc-
26 esses known to the relevant trade or industry.
27 (b) Mandated safety and compliance training. Any training required by
28 federal, state, or local law to maintain workplace safety, including but
29 not limited to OSHA certifications, sexual harassment prevention, or
30 diversity training.
31 § 2. Section 1052 of the labor law, as added by a chapter of the laws
32 of 2025 amending the labor law relating to enacting the "trapped at work
33 act", as proposed in legislative bills numbers S. 4070-B and A. 584-C,
34 is amended to read as follows:
35 § 1052. Prohibiting the use of employment promissory notes and other
36 similar provisions. 1. [Beginning on the effective date of this arti-
37 cle, no] No employer may require, as a condition of employment, any
38 [worker] employee or prospective [worker] employee to execute an employ-
39 ment promissory note. The execution of an employment promissory note as
40 a condition of employment is unconscionable, against public policy, and
41 unenforceable, and any such note shall be null and void. If any such
42 note is part of a larger agreement, the invalidity of such note shall
43 not affect the other provisions of such agreement.
44 2. Nothing in this section shall prohibit or render void or unenforce-
45 able any agreement between [a worker] an employee and an employer that:
46 (a) requires the [worker] employee to [repay to the employer any sums
47 advanced to such worker by the employer, unless such sums were used to
48 pay for training related to the worker's employment with the employer;
49 (b) requires the worker to pay the employer for any property it has
50 sold or leased to such worker;] reimburse the employer for the cost of
51 tuition, fees, and required educational materials for a transferable
52 credential that meets all of the following requirements:
53 (i) The agreement is set forth in a written contract that is offered
54 separately from any contract for employment.
55 (ii) The agreement does not require the employee to obtain the trans-
56 ferable credential as a condition of employment.
A. 9452 3
1 (iii) The agreement specifies the repayment amount before the employee
2 agrees to the contract, and the repayment amount does not exceed the
3 cost to the employer of the tuition, fees, and required educational
4 materials for the transferable credential received by the employee.
5 (iv) The agreement provides for a prorated repayment amount during any
6 required employment period that is proportional to the total repayment
7 amount and the length of the required employment period and does not
8 require an accelerated payment schedule if the employee separates from
9 the employment.
10 (v) The agreement does not require repayment to the employer by the
11 employee if the employee is terminated, except if the employee is termi-
12 nated for misconduct.
13 (b) requires the employee to pay the employer for any property the
14 employer has sold or leased to the employee, as long as such sale or
15 lease was voluntary.
16 (c) requires the employee to repay a financial bonus, relocation
17 assistance, or other non-educational incentive or other payment or bene-
18 fit that is not tied to specific job performance, unless the employee
19 was terminated for any reason other than misconduct or the duties or
20 requirements of the job were misrepresented to the employee.
21 [(c)] (d) requires educational personnel to comply with any terms or
22 conditions of sabbatical leaves granted by their employers; or
23 [(d)] (e) is entered into as part of a program agreed to by the
24 employer and its [workers'] employees' collective bargaining represen-
25 tative.
26 § 3. Subdivision 2 of section 1053 of the labor law, as added by a
27 chapter of the laws of 2025 amending the labor law relating to enacting
28 the "trapped at work act", as proposed in legislative bills numbers S.
29 4070-B and A. 584-C, is amended to read as follows:
30 2. An employee or prospective employee who is aggrieved by a violation
31 of this article may file a complaint with the commissioner. Any employer
32 [found] determined by the commissioner to have violated this article
33 shall be fined by the commissioner not less than one thousand dollars
34 and not more than five thousand dollars for each violation. In assessing
35 the amount of the penalty, the commissioner shall give due consideration
36 to the size of the employer's business, the good faith basis of the
37 employer to believe that its conduct was in compliance with the law, the
38 gravity of the violation, and the history of previous violations. Each
39 [worker] employee or prospective [worker] employee whom an employer
40 required to execute an employment promissory note or against whom an
41 employer seeks to enforce such a note shall constitute a separate
42 violation of this article.
43 § 4. Section 3 of a chapter of the laws of 2025 amending the labor law
44 relating to enacting the "trapped at work act", as proposed in legisla-
45 tive bills numbers S. 4070-B and A. 584-C, is amended to read as
46 follows:
47 § 3. This act shall take effect [immediately] one year after it shall
48 have become a law.
49 § 5. This act shall take effect immediately; provided, however, that
50 sections one, two, and three of this act shall take effect on the same
51 date and in the same manner as a chapter of the laws of 2025 amending
52 the labor law relating to enacting the "trapped at work act", as
53 proposed in legislative bills numbers S. 4070-B and A. 584-C, takes
54 effect.
