NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A584C
SPONSOR: Steck TITLE OF BILL:
An act to amend the labor law, in relation to enacting the "trapped at
work act"
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to prohibit reimbursement clauses or promis-
sory notes as a condition of employment.
SUMMARY OF PROVISIONS:
This bill would create a new article with six new sections in the labor
law.
New section 1050 would define employers, employees, and promissory
notes. Both public and private employers are included.
New section 1051 would establish the scope of the bill.
New section 1052 would prohibit employers from requiring, as a condition
of employment, any worker or prospective worker to execute a promissory
note. It would also render any existing note unenforceable. Nothing is
this new section would prohibit or render void or unenforceable any
agreement between a worker and an employer that:
1. 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;
2. Requires the worker to pay the employer for any property it has sold
or leased to such worker;
3. Requires educational personnel to comply with any terms or conditions
of sabbatical leaves granted by their employers; or
4. Is entered into as part of a program agreed to by the employer and
its workers' collective bargaining representative.
New section 1053 would establish penalties not less than $1,000 and not
more than $5,000 for each violation.
New section 1054 would allow the Department of Labor to establish neces-
sary rules and regulations to enforce this article.
New Section 1055 is the savings clause.
JUSTIFICATION:
Employers across the state have been trapping employees at work by
requiring employment promissory notes a/k/a "training reimbursement
agreements" as a condition of employment. Workers desperate for a job
will sign these contractual agreements without the advice of counsel,
unknowingly being trapped in a position under the threat of legal action
should not complete the terms of the contract. Minimum and low-wage
workers subject to these agreements are required to "repay" the employer
thousands of dollars should they leave the employment due to poor work-
ing conditions or anything unrelated to job performance for non-existent
"on the job" training while also making money for the employer. This
legislation prohibits this practice except under specific conditions,
such as where there is true training that must be paid for, property has
been sold or leased to the employee, sabbatical leaves and collective
bargaining agreements.
PRIOR LEGISLATIVE HISTORY:
New bill.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION:
A-print and B-print amendments make technical changes and remove the
statement of public policy section from the bill. C-print amendment
limits what the employee is entitled to receive when their employer sues
them to enforce the provisions of a promissory note made void by this
article. Said employee would not only be entitled to attorney's fees.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
584--C
2025-2026 Regular Sessions
IN ASSEMBLY(Prefiled)
January 8, 2025
___________
Introduced by M. of A. STECK, SANTABARBARA, PAULIN, LEVENBERG, REYES,
SHIMSKY, DAVILA -- read once and referred to the Committee on Labor --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee -- again reported from said committee
with amendments, ordered reprinted as amended and recommitted to said
committee -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
AN ACT to amend the labor law, in relation to enacting the "trapped at
work act"
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "trapped at work act".
3 § 2. The labor law is amended by adding a new article 37 to read as
4 follows:
5 ARTICLE 37
6 TRAPPED AT WORK ACT
7 Section 1050. Definitions.
8 1051. Scope.
9 1052. Prohibiting the use of employment promissory notes and
10 other similar provisions.
11 1053. Enforcement.
12 1054. Rules.
13 1055. Savings clause.
14 § 1050. Definitions. For purposes of this article:
15 1. "Employer" means an individual, partnership, association, corpo-
16 ration, limited liability company, trust, government or government
17 subdivision, or any organized group that hires or contracts with a work-
18 er to work for the employer. For the purposes of this article, this term
19 shall also include any subsidiary of an employer and any individual,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01084-08-5
A. 584--C 2
1 partnership, association, corporation, limited liability company, trust,
2 government or government subdivision, or any organized group associated
3 with an employer that provides training to workers.
4 2. "Worker" means an individual who is permitted to work for or on
5 behalf of an employer. The term "worker" includes an employee, independ-
6 ent contractor, extern, intern, volunteer, apprentice, sole proprietor
7 who provides a service or services to an employer or to a client or
8 customer of an employer on behalf of such employer, and an individual
9 who provides service through a business or nonprofit entity or associ-
10 ation. "Worker" does not include an individual, even if the individual
11 performs incidental service for the employer, whose sole relationship
12 with the employer is as a vendor of goods.
13 3. "Employment promissory note" means any instrument, agreement, or
14 contract provision that requires a worker to pay the employer, or the
15 employer's agent or assignee, a sum of money if the worker leaves such
16 employment before the passage of a stated period of time. "Employment
17 promissory note" includes any such instrument, agreement, or contract
18 provision which states such payment of moneys constitutes reimbursement
19 for training provided to the worker by the employer or by a third party.
20 § 1051. Scope. The rights and remedies provided pursuant to this arti-
21 cle shall not supersede any other rights and remedies provided by stat-
22 ute or common law.
23 § 1052. Prohibiting the use of employment promissory notes and other
24 similar provisions. 1. Beginning on the effective date of this article,
25 no employer may require, as a condition of employment, any worker or
26 prospective worker to execute an employment promissory note. The
27 execution of an employment promissory note as a condition of employment
28 is unconscionable, against public policy, and unenforceable, and any
29 such note shall be null and void. If any such note is part of a larger
30 agreement, the invalidity of such note shall not affect the other
31 provisions of such agreement.
32 2. Nothing in this section shall prohibit or render void or unenforce-
33 able any agreement between a worker and an employer that:
34 (a) requires the worker to repay to the employer any sums advanced to
35 such worker by the employer, unless such sums were used to pay for
36 training related to the worker's employment with the employer;
37 (b) requires the worker to pay the employer for any property it has
38 sold or leased to such worker;
39 (c) requires educational personnel to comply with any terms or condi-
40 tions of sabbatical leaves granted by their employers; or
41 (d) is entered into as part of a program agreed to by the employer and
42 its workers' collective bargaining representative.
43 § 1053. Enforcement. 1. Notwithstanding any other provision of law, an
44 employee who is sued by an employer seeking to enforce the provisions of
45 a promissory note made null and void by this article shall be able to
46 recover attorney's fees upon a successful defense.
47 2. Any employer found to have violated this article shall be fined by
48 the commissioner not less than one thousand dollars and not more than
49 five thousand dollars for each violation. Each worker or prospective
50 worker whom an employer required to execute an employment promissory
51 note or against whom an employer seeks to enforce such a note shall
52 constitute a separate violation of this article.
53 § 1054. Rules. The commissioner may promulgate rules and regulations
54 necessary to carry out the provisions of this article.
55 § 1055. Savings clause. If any portion of this article or the applica-
56 tion thereof to any person, occupation or circumstance is held invalid,
A. 584--C 3
1 the remainder of the article and the application of such provision to
2 other persons, employees, occupations, or circumstances shall not be
3 affected thereby.
4 § 3. This act shall take effect immediately.
