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The National Law Review

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New York DOL Issues Guidance on Incoming Trapped at Work Act

Go-To Guide: Following the trend of states imposing stricter regulations on employer clawback programs, including California’s “Stay-or-Pay” law , New York’s Trapped at Work Act (TAWA), effective Dec. 19, 2026, will generally prohibit employers from requiring employees or applicants, as a condition of employment, to agree to repay the employer if their employment ends before a specified date. The TAWA includes exceptions for limited repayment arrangements, including those involving non-performance-related financial incentives (e.g. signing bonuses and relocation assistance), transferrable educational credentials, voluntary property transactions, educational personnel sabbaticals, and collectively bargained programs. The New York State Department of Labor (NY DOL) recently released guidance (the NY DOL guidance) clarifying its interpretation of certain aspects of the TAWA. Among key updates, the NY DOL guidance defines the term “misconduct,” confirms that the TAWA is not retroactive, and notes that truly voluntary repayment arrangements that are separate from accepting or continuing employment fall outside the legislation’s purview. Employers should consider reviewing offer letters, bonus and relocation agreements, promissory notes, tuition-reimbursement programs, and other repayment provisions before the TAWA takes effect. The TAWA, codified as Article 37 of the New York Labor Law, will generally prohibit employers from requiring employees or prospective employees, as

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