Assemblymember Steck Introduces Legislation to Protect New Yorkers from Training Repayment Agreement Provisions

Last week, Assemblymember Phil Steck introduced legislation protecting New Yorkers from predatory "training repayment agreement provisions" or TRAPs, which are contract terms that require workers to pay prohibitive sums if they leave a job before a certain period (A.6819).

"The issue of TRAPs was brought to my attention by a constituent. She was paid $14 an hour in a lash salon and as a condition of employment, she was required to sign a contract to stay in her role for a year, otherwise she would be sued for $5,000 for training reimbursement," Steck said. "The training simply consisted of another employee demonstrating how to apply lashes on a customer. This was not training that the employer paid for nor lost revenue in providing. My constituent chose to leave her position and is now being sued multiple times by the employer and owes thousands in legal fees. This clearly violates our minimum wage laws and is not the right way to treat the working class."

Employers across New York State can hold workers hostage in low-paying and substandard working conditions through employer-driven debt. To lock workers in debt, employers rely on restrictive contracts that act as de facto non-competes, such as stay-or-pay contracts and training repayment agreement provisions, also known as TRAPs. This legislation addresses the issue by clearly defining what contract terms have the effect of creating debt at work, prohibiting employers from requiring these provisions in their employment contracts and enforcing them in state courts, and allowing workers to enforce their rights in court.

Since being introduced, Assemblymember Steck’s legislation has been endorsed by the Student Borrower Protection Center (SBPC). “Millions of workers across the nation, including workers in New York, are likely bound by TRAPs. These include some of the most essential workers that have helped keep our communities safe and functioning through the worst phases of the COVID-19 pandemic: nurses, retail workers, and truck drivers. The SBPC estimates that major employers rely upon TRAPs in segments of the U.S. labor market that collectively employ more than one in three private-sector workers,” said Winston Berkman-Breen, Policy Counsel and Deputy Director for Advocacy at SBPC.

The New York State Nurses Association (NYSNA) also strongly supports this legislation. “Tying nurses and other healthcare workers to an abusive employment situation through contractual financial penalties and shifting of employer costs to the employee is wrong and will only worsen the exodus of nurses from the workforce, said Pat Kane, RN, Executive Director of NYSNA. “Employer practices that seek to bind workers to their jobs and prevent them from leaving for higher pay or better conditions should be banned.”

With only three weeks left in the Legislative Session, Assemblymember Steck is hopeful the legislation will pass the Assembly. “As Democrats, we are obligated to follow in the footsteps of President Franklin Roosevelt, a progressive leader in building an economic New Deal that delivered for working people. By passing this legislation, the New York State Assembly would reaffirm our commitment to helping the working class.”