Relates to the prohibition of the use of employment promissory notes and other similar provisions

Workers gain protection from job repayment debts

New York employers, including state and local governments, cannot require employees or job applicants to sign job repayment notes. These notes demand payment for leaving before a set time and are void and unenforceable. Separate written agreements can cover widely recognized credentials, but getting the credential cannot be required for the job. Terms must be disclosed upfront, with repayment capped at the employer’s actual tuition, fees, and required educational materials. Repayment must shrink with time worked, cannot speed up when employment ends, and is waived after termination except for misconduct. Employer-specific training and legally required safety or compliance training do not qualify. Exceptions also cover voluntary purchases or leases of employer property, educator sabbaticals, and programs agreed to with a union representative. Certain non-educational bonuses or incentives qualify only when they are not tied to specific job performance. Their repayment is restricted after termination without misconduct or when job duties or requirements were misrepresented. Employees and job applicants harmed by violations can complain to the Labor Commissioner. Employers face fines of $1,000 to $5,000 per violation, with each person forced to sign or targeted for enforcement counted separately. Fine amounts depend on employer size, good-faith belief in compliance, seriousness, and prior violations. The broader framework defines workers to include contractors, interns, externs, volunteers, apprentices, and people providing services through businesses or nonprofits. It excludes people whose only relationship is selling goods. The law takes effect one year after becoming law, except sections one through three follow the related 2025 amendments’ timing.