FH
Ford & Harrison LLP
More
FordHarrison is a labor and employment firm with attorneys in 29 offices, including two affiliate firms. The firm has built a national legal practice as one of the nation’s leading defense firms with an exclusive focus on labor law, employment law, litigation, business immigration, employee benefits and executive compensation.
As discussed in our previous Alert, a bill recently signed into law by New York Governor Hochul and now in effect prohibits certain “stay or pay” agreements that require employees to repay…
United States
Employment and HR
To print this article, all you need is to be registered or login on Mondaq.com.
Article Insights
Gregory B. Reilly’s articles from Ford & Harrison LLP are most popular:
with readers working within the Securities & Investment and Law Firm industries
Ford & Harrison LLP are most popular:
with Senior Company Executives, HR and Inhouse Counsel
As discussed in our previous Alert, a bill recently signed into law by New York
Governor Hochul and now in effect prohibits certain “stay or
pay” agreements that require employees to repay their employer
for training costs if the employee resigns before a specified
period. As mentioned previously, however, there are some
ambiguities with the new law, including, for example, where
training costs might also be characterized as tuition assistance
programs.
The Governor has reportedly reached an agreement with the
Legislature to resolve some of these ambiguities in the next
legislative session. The currently proposed amendments to the new
law include the following:
Changing the effective date of the “Trapped at Work
Act” to December 19, 2026.
Clarification that tuition repayment agreements are permissible
if the education credential is not a condition of employment; the
amount is based upon the employer’s actual cost, is clearly
disclosed and capped; the employee’s repayment obligation is
prorated with no acceleration for repayment or payment required
upon termination of employment, except if termination was for
misconduct.
See https://assembly.state.ny.us/leg/?default_fld=%0D%0A&leg_video=&bn=A09452&term=2025&Text=Y.
We will keep you updated about when, if at all, any such amendments
are made to the existing law. In the interim, requiring departing
employees to pay for their training costs is potentially
illegal.
The Bottom Line
Accordingly, New York employers should review and, where
necessary, revise offer letters, employment agreements, or any
other agreements between the employer and employees that may
include repayment terms. We note that the statute’s language
does not expressly grandfather existing agreements so employers
would be prudent to assume that the new law might apply
retroactively until the courts make a determination.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.