What Employers Need to Know about New York State's Trapped at Work Act
What Employers Need to Know about New York State's Trapped at Work Act
Workers Cannot Be Required to Repay Certain Advances, Stipends, or Reimbursements If Leaving a Job Before a Set Amount of Time
Who is Affected by the Trapped at Work Act?
The Act broadly defines an affected "employer" as "an individual, partnership, association, corporation, limited liability company, trust, government or government subdivision, or any organized group that hires or contracts with a worker to work for the employer."
What Does the Act Prohibit?
The Act prohibits any covered employer from requiring a worker to execute an employment promissory note as a condition of the worker's employment.
Exceptions to the Act
Notably, the Act lists four distinct categories of agreements between workers and employers that are not prohibited.
An agreement that "requires the worker to repay to the employer any sums advanced to such worker by the employer, unless such sums were used to pay for training related to the worker's employment with the employer."
Agreements requiring a worker to pay the employer for any property it has sold or leased to such worker.
Agreements requiring educational personnel to comply with sabbatical leaves.
Agreements entered into as part of an applicable collective bargaining agreement.
Consequences of Violating the Act
If an employer is found to have required a worker to execute an employment promissory note in violation of the Act, the New York State Department of Labor may issue a fine ranging from at least $1,000 up to a maximum of $5,000.
How to Proceed
Moving forward, New York employers should carefully review all policies, onboarding materials, and agreements for potential repayment provisions that violate the Act.
This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client.
For further information please contact me at www.kmckernanlaw.com kevin@kmckernan.com or 718-317-5007.