Intro to New York Labor Laws

New York’s “Trapped at Work Act” is now in effect, imposing new limits on the use of employment‑related promissory notes and similar agreements that can restrict an employee’s ability to leave a job. The law prohibits employers from requiring employees (including contractors, interns, and volunteers) to repay training costs, sign‑on bonuses, relocation reimbursement, or other payments if the employee leaves before a specified date. 

Employers should review and revise any agreements or practices that tie repayment obligations to continued employment to ensure compliance with the new law.

New York amends the Fair Credit Reporting Act to prohibit employers from requesting or using an applicant’s or employee’s consumer credit history when making employment decisions — including hiring, compensation, or terms of employment.

The ban defines “consumer credit history” broadly to include credit reports, scores, and other credit‑related information obtained from the individual. Limited exemptions allow use of credit history for certain roles (e.g., peace officers, positions requiring bond or security clearance, or roles with access to trade secrets) or when required by law.

Employers should review background checks and hiring procedures now to prepare for the April 2026 effective date and ensure compliance with the new restrictions.

Under the revised law, employers must now provide an additional 32 hours of unpaid safe and sick leave to covered employees. The unpaid leave must be front-loaded upon hire and again at the beginning of each benefit year for immediate employee usage. Additional updates include a broader range of permissible uses for both paid and unpaid safe and sick time. New permissible uses include absences due to a public disaster or public health emergency that causes business, childcare, or school closures, or governmental “stay home” directives.

NYC employers should begin updating their leave policies to incorporate these changes. Specifically, employers should prepare to provide this additional unpaid leave and update their employee handbooks. Crucially, employers must also adjust their payroll systems to track and display both paid and unpaid time off on employee pay stubs, as required by the new law.

New York City has enacted new pay data reporting requirements requiring private employers with 200 or more employees working within New York City to submit annual reports containing pay information and workforce demographic data (including race, ethnicity, and sex) to a designated city agency. The reported data will support a citywide pay equity analysis and help identify potential disparities in compensation across industries and demographic groups. While the reporting framework has not yet been finalized, employers should continue to monitor developments and begin preparing to comply once requirements are established.

Employers should begin preparing to collect accurate pay and demographic information to ensure they can meet upcoming reporting obligations.

New York State has launched a mandatory Secure Choice Savings Program, a state-sponsored retirement plan for private-sector employers who do not already offer a qualified retirement plan. Eligible employers are those with 10+ employees, in business for at least two years. Deadlines are staggered based on company size, beginning March 18, 2026, for employers with 30+ employees.. Administration of the program is handled by the state, free for employers, and requires no contributions. Customers who operate in New York and participate in Justworks’ 401k plans through Empower generally meet or exceed the state’s requirements.

New York has significantly raised the maximum weekly unemployment benefit, effective immediately, increasing it from $504 to $869 per week. To fund this increase, the state has raised the wage cap for unemployment insurance from $12,800 to 18% of the state's average annual wage, which will result in increased employer contributions. However, to offset this cost for employers, the annual Interest Assessment Surcharge (IAS) charge has been eliminated. This change is estimated to provide employers with approximately $100 per-employee savings beginning in 2026.