If your former employer sent you a bill, demand letter, or collection notice claiming you owe money for training it paid for during your employment, the first thing I would tell you is this: do not write a check before you speak with an employment attorney. New York enacted the Trapped at Work Act to address exactly these situations, and depending on when your agreement was signed and what it covers, the demand your former employer is making may not be legally enforceable.
What These Demands Usually Look Like
Training cost repayment demands come in a few common forms. Some employees sign what employers call a "training reimbursement agreement" or "training repayment obligation" at or near the start of employment. Others sign something labeled a "promissory note" tied to a course, certification program, or professional license the employer paid for. In each case, the document typically says that if you leave the company before a set period, usually one to three years, you must repay some or all of the employer's costs.
When an employee quits, is laid off, or is let go for any reason, the employer sends a demand letter, sometimes followed by an invoice from a third-party firm. In some cases the employer refers the matter to a debt collector or files a lawsuit in civil court. The amounts can range from a few hundred dollars to tens of thousands, depending on what the employer says it spent on the program.
I represent employees in New York City and Nassau County who are dealing with exactly these demands. The legal landscape in New York changed significantly when the state enacted the Trapped at Work Act in late 2025, and many of the agreements employers are currently trying to enforce are on uncertain ground.
New York's Trapped at Work Act: What It Does
In December 2025, New York enacted the Trapped at Work Act, adding Article 37 to the New York Labor Law. The statute declares that "employment promissory notes" (agreements requiring employees to repay money to an employer upon leaving a job before a specified date) are unconscionable, against public policy, and unenforceable. The law is broad and is not limited to documents literally labeled "promissory notes." It covers any agreement, by whatever name, that requires payment to the employer as a condition of departure before a set time period.
In February 2026, the Legislature amended the Act to sharpen its scope and address some ambiguities in the original text. The amendment narrowed coverage to employees (removing independent contractors, interns, and volunteers from the statute's reach), created specific and limited exceptions for certain kinds of arrangements, and extended the law's effective date. The amended version of the statute is what governs today.
I covered the Act in detail in a prior post on training cost repayment rules in New York. If you want more background on what the law requires and how it works, that post is a useful starting point: New York's Training Cost Repayment Rules Explained.
The Law Is Not Yet Fully in Effect, but That Does Not Mean You Should Pay
Here is where the timing matters, and I want to be straightforward with you. The Trapped at Work Act, as amended, is not yet fully in effect as of this writing. Previously I wrote that the effective date of the amended law is December 19, 2026, but there is ongoing debate among legal commentators about the precise enforcement date. Some now interpret the law's language to indicate that the effective date is February 13, 2027. Either way, the New York State Department of Labor has not yet begun issuing civil penalties to employers.
That said, the timing does not mean you should simply pay what is being demanded. Several things remain true right now.
First, your agreement may be independently unenforceable under existing New York contract law, separate from the Trapped at Work Act entirely. Courts in New York have scrutinized training repayment agreements on grounds including lack of adequate consideration, unconscionability, and misrepresentation about the nature or scope of the training. These are arguments that exist independent of any statute.
Second, the enactment of the Trapped at Work Act is itself a signal about public policy. Legislators and the Governor have declared this category of agreements to be disfavored. That declaration carries weight in settlement negotiations and, in some circumstances, in litigation.
Third, even if an employer files a lawsuit against you before the statute's enforcement date, a case that is still pending when the law takes full effect may be affected by the new statute. The retroactivity question is genuinely unsettled and will likely be litigated in the courts over the next year.
The worst thing you can do is ignore a demand letter entirely. An unanswered demand can become a lawsuit, and a default judgment creates real collection problems: wage garnishment, bank account restraints, and damage to your credit standing. Take the demand seriously, but take it seriously enough to get legal advice before you respond.
Whether Your Agreement Might Fall Under an Exception
The amended Trapped at Work Act does permit some specific types of repayment arrangements. Whether your agreement falls within one of these exceptions is a critical part of any legal analysis.
The statute allows repayment agreements for tuition, fees, and educational materials paid toward a degree, professional license, or certification that is recognized across the industry and that enhances your employability at companies other than your former employer. These agreements for what the statute calls "transferable credentials" are only valid if they meet strict conditions: the agreement must be in a separate, standalone written contract; the repayment amount must be prorated straight-line and capped at the employer's actual cost with no interest or additional fees; and the repayment obligation must be waived entirely if the employee is terminated for reasons other than misconduct.
The statute also allows repayment agreements for sign-on bonuses, relocation assistance, and other non-educational financial incentives, but only when the repayment is triggered by voluntary resignation or termination for employee misconduct. If you were laid off, terminated without cause, or constructively pushed out of your position, a demand for repayment of a bonus or relocation payment may be just as legally questionable as a training repayment demand.
If your agreement does not fit neatly within one of these exceptions, or if it was presented to you as a condition of beginning the job rather than as an optional benefit you chose to accept, those are facts worth discussing with an attorney.
Steps to Take If You Received a Demand
Here is what I generally advise clients who come to me after receiving a training cost repayment demand from a former employer.
Gather all your documents first. Find the original agreement you signed, your offer letter or onboarding paperwork, any written communications about the training program, and the demand letter itself. If you have pay stubs, performance reviews, or termination paperwork, hold onto those as well. The more complete the record, the better position you will be in.
Do not respond to the demand on your own before consulting an attorney. Anything you write in response can be used against you later. This is especially true if you acknowledge that you owe the money or offer to pay a smaller amount. Both actions can complicate your legal position significantly.
Make note of the facts surrounding your departure. Were you laid off rather than quitting voluntarily? Were you given a misleading description of what the training program was when you signed the agreement? Were the costs being demanded now different from what the agreement actually specified? Did you receive the promised training or did the program fall short of what was described? These details often matter.
If the employer has sent the matter to a third-party debt collector, be aware that you have rights under the federal Fair Debt Collection Practices Act. A debt collector is required to provide written verification of the debt if you request it, and certain collection conduct is prohibited regardless of whether the underlying debt is valid. If a debt collector has contacted you, mention this to your attorney at the outset.
What Happens If the Employer Sues You
Some employers do follow through and file a lawsuit when an employee refuses to pay. If you are sued in New York, you are entitled to raise defenses, including arguments that the agreement is unenforceable under existing contract law or under the Trapped at Work Act.
The amended statute contains a specific fee-shifting provision: if an employer sues to enforce a repayment agreement that violates the Act, and you successfully defend that lawsuit, you can recover your reasonable attorney's fees from the employer. That provision changes the calculation for employers considering litigation, and it is an argument that can be raised early in any defense.
The statute does not currently create a separate right for employees to sue employers as plaintiffs. Enforcement of the Act runs primarily through the New York State Department of Labor, which can impose civil penalties on employers who require employees to execute prohibited agreements. Penalties run from $1,000 to $5,000 per violation, with each affected employee counting as a separate violation. If you believe your former employer is currently requiring its employees to sign these agreements, you can raise that issue with the Department of Labor.
Speak with an Attorney Before You Do Anything Else
If your former employer is demanding repayment for training costs and you are in New York City or Nassau County, I can help you evaluate your situation. No two of these cases are identical. The specific language in your agreement, the circumstances in which you signed it, and the way your employment ended all affect your legal position. In my experience, many of these demands are either negotiable or unenforceable, and employees who get advice early are in a far stronger position than those who wait until a lawsuit has been filed.
You can reach me through the contact page to schedule a consultation. I handle a range of issues related to restrictive covenants and employment agreements for employees throughout New York City and Nassau County.
Frequently Asked Questions About a Former Employer Demanding Repayment of Training Costs
Is New York's Trapped at Work Act already in effect?
As of this writing, the Trapped at Work Act's enforcement date has been delayed. The amended statute is scheduled to take effect either on December 19, 2026 or February 13, 2027 (there is ongoing disagreement among legal commentators about the precise date). Agreements signed before the enforcement date are not automatically void under the statute today, but they may still be unenforceable on other grounds under existing contract law.
My employer says I signed a training repayment agreement. Does that mean I have to pay?
Not necessarily. A signed agreement can still be unenforceable if it lacks adequate consideration, was obtained through misrepresentation, is unconscionable, or falls within the scope of the Trapped at Work Act once that statute takes full effect. An employment attorney can review the specific language of your agreement and the circumstances in which you signed it to assess what defenses are available to you.
I was laid off. Can my former employer still demand repayment for training costs?
Whether your separation was voluntary or involuntary is a significant factor. Even under the exceptions the Trapped at Work Act allows, permitted repayment agreements cannot require repayment if you were terminated for reasons other than misconduct. If you were laid off, let go without cause, or resigned due to intolerable working conditions, a repayment demand may be legally questionable regardless of what your agreement says.
What exactly is an 'employment promissory note' under the law?
The term covers any agreement that requires you to pay money to your employer if you leave before a specified date. It includes documents labeled training reimbursement agreements, training repayment obligations, promissory notes tied to employer-funded programs, and any similar arrangement. The Trapped at Work Act is designed to reach these agreements broadly, regardless of how they are labeled or structured.
Can my former employer send the debt to a collection agency or report it to a credit bureau?
An employer can refer a claimed debt to a third-party collector, but doing so does not make the underlying debt enforceable. If a debt collector contacts you, federal law gives you the right to request written verification of the debt. Certain collection tactics are also prohibited regardless of whether the debt is valid. You should mention any collection activity to your attorney at the outset of your consultation, because it affects the options available to you.
What is a 'transferable credential' and does it apply to my situation?
The Trapped at Work Act permits repayment agreements for tuition and fees paid toward a degree, license, or industry-recognized certification that improves your ability to work elsewhere. A credential that only qualifies you to operate a proprietary company system or software is less likely to qualify. Whether yours applies depends on how the credential is recognized in your field and what your agreement actually says.
Does the law apply to agreements I signed before it was enacted?
This is one of the most contested questions under the Trapped at Work Act. The original law had no grandfather clause, suggesting it might reach pre-existing agreements. The February 2026 amendment did not clearly resolve retroactivity, and courts have not yet ruled on it. Whether the statute applies to your agreement may depend on the effective date ultimately set and the specific facts of your case.
If my employer sues me and I win, can I recover my attorney's fees?
Yes. The Trapped at Work Act contains a fee-shifting provision: if an employer sues to enforce a repayment agreement that violates the statute and you successfully defend that lawsuit, you are entitled to recover your reasonable attorney's fees from the employer. This provision is significant because it reduces the financial risk of mounting a defense and makes litigation less attractive for employers pursuing claims over void agreements.