Bill Would Ensure Workers Have Protections Against Employer-Driven Debt, “Trapped At Work Act” Bans Exploitative Practices First Exposed in SBPC’s Trapped At Work Investigation
June 13, 2025 | NEW YORK — Student Borrower Protection Center (SBPC) applauds the New York State Legislature for passing Assembly Bill A584C, the Trapped At Work Act. This bill will prohibit employers from imposing Training Repayment Agreement Provisions (widely known as TRAPs) on employees, which put workers on the hook for thousands of dollars in debts owed directly to their employers if they quit, change jobs, or are laid off.
The Trapped At Work Act, introduced by Assemblymember Phil Steck and State Senator Rachel May, passed the Assembly unanimously and the Senate 38-21. These protections are in direct response to employer abuses revealed after years of state and federal investigations—including by New York’s Office of the Attorney General. In 2022, SBPC published Trapped At Work, the groundbreaking investigation that first defined these contracts as TRAPs and warned policymakers of the use of employer-driven debt to exploit workers.
In response, SBPC Legal Director Winston Berkman-Breen released the following statement:
“Employers across New York State have held workers hostage in low-paying jobs and with substandard working conditions, exploiting contracts that threaten employer-driven debt, like TRAPs. Assemblymember Steck and Senator May heard their constituents’ stories and took action by introducing the Trapped at Work Act. Yesterday, the New York Legislature stood up for vulnerable workers and said: we have your back.
“We applaud the lawmakers who voted to ban TRAPs, which threaten to bury workers in debt for quitting to pursue a better opportunity or even for being laid off due to circumstances out of their control. These protections are more necessary than ever, as the Trump Administration imposes its blatantly anti-worker agenda and rolls back federal protections on TRAPs. We look forward to Governor Hochul signing this bill into law.”
In response, Chris Hicks, Senior Policy Advisor at SBPC and a co-author of Trapped at Work, the investigation that inspired the Trapped at Work Act, released the following statement:
“New York State is poised to join a movement across the country to ban TRAPs—freeing healthcare professionals, truck drivers, pet groomers, pilots, and millions of other workers from employers who are using debt as a tool of coercion to force workers to stay in low-paying, unsafe jobs. As the Trump Administration turns its back on workers, shredding protections against this exact type of worker exploitation, it is critical for states and cities across the country to follow New York’s lead and stand up for working people.”
Once the bill is signed by Governor Hochul, any employer that includes TRAPs in their employment contracts will face up to a $5,000 fine per violation. This bill’s passage is the latest in the growing movement among state lawmakers to ban the use of TRAPs. In addition to New York, in 2025 alone, more than half a dozen states took action to protect workers from TRAPs:
- Last week, the California Assembly passed AB 692, putting the state on track to prohibit employers from using TRAPs and allow workers to enforce their rights in court.
- Colorado passed SB 25-083 with bipartisan support, which prohibits hospitals and healthcare staffing companies from charging medical professionals any damages for departing their jobs.
- Indiana passed SEA 475, which prohibits hospitals from imposing stay-or-pay contracts—contracts that work by charging departing workers a fee for quitting, including TRAPs—in physicians’ employment contracts if the terms require workers to remain at a facility for more than three years.
- Wyoming passed SF0107, which prohibits employers from imposing stay-or-pay contracts that last longer than four years and requires employers to pro-rate the amount that can be collected every year of employment (ranging from 33 to 100 percent).
- Nevada, Ohio, Vermont, and Washington introduced bills that would prohibit employers from using TRAPs and other contracts that charge employees fees for quitting.
Background on TRAPs in New York
Assemblymember Steck first introduced the Trapped At Work Act in 2023 following a constituent reaching out to his office after being sued by her employer over a TRAP. Trisha D’Allaird, a licensed cosmetologist, began working at a lash bar where she earned $14 an hour, but she soon realized the working conditions were far from ideal. Three and half months in, she decided it was best to leave. Her employer responded by repeatedly suing her for a $5,000 training fee and costing her thousands more in legal fees. But Trisha had not received any formal training. She came into the job fully licensed, and the on-the-job training she had received was simply her employer’s own policies and procedures.
Ms. D’Allaird’s case is not an isolated incident. In 2023, the U.S. Department of Labor filed its first-ever lawsuit against a nursing agency based in Brooklyn, NY for allegedly using a “stay-or-pay” contract that required employees to pay the employer if they leave their job before the end of a contract. Advanced Care Staffing (ACS) required a nurse to sign a contract that required him to work for them for at least three years or pay the nursing agency $20,000—plus paying the company’s future profits, attorneys’ fees, and arbitration costs. After four months of raising concerns that went unaddressed, including how he was being assigned more patients than he felt he could responsibly care for and working under grueling conditions, he resigned. The company responded by suing the nurse for more than $24,000—$9,000 of which were for future profits—an amount that was more than he had been paid by the company, $20,372.90 in gross wages, for his entire period of employment. He responded by suing ACS for its practices, and the U.S. Department of Labor later joined the case as well. Because the quitting fee was greater than the amount he had earned, the Department of Labor argued the company had violated the federal minimum wage requirements.
In 2022, New York Attorney General Letitia James announced a settlement agreement with Albany Med Health System after finding that it required foreign-educated nurses, primarily from the Philippines, to pay up to $20,000 if they resigned or were fired within the first three years of employment at the hospital. If a nurse failed to pay the fee, the contract provision threatened legal action and reporting to immigration authorities. Attorney General James also found that the stay-or-pay provisions in these contracts violated the Trafficking Victims Protection Act, because of their threat of serious legal and financial harm to coerce these workers to continue working at the hospital.
Further Reading
SBPC report on TRAPs: Trapped at Work: How Big Business Uses Student Debt to Restrict Worker Mobility
SBPC blog on TRAPs: As Trump Administration Rolls Back Federal Protections, State Lawmakers Must Protect Workers From Predatory Employer-Driven Debt
SBPC toolkit on how states can stop TRAPs: Training Repayment Agreement Provision (TRAP) State Legislative Toolkit
SBPC blog on how local regulators can protect workers: How Cities and States Can Unlock Workers Across the Country from TRAPs
SBPC statement on the U.S. Department of Labor’s lawsuit against ACS: Advocates Commend U.S. Labor Department for Taking Action to Protect Workers from Predatory Employer-Driven Debt
Read the U.S. Department of Labor’s press release about their lawsuit against ACS: Department of Labor Seeks Court Order to Stop Brooklyn Staffing Agency From Demanding Employees Stay 3 Years or Repay Wages
Read the U.S. Department of Labor’s complaint against ACS filed in federal court in New York: https://towardsjustice.org/wp-content/uploads/2023/03/DOL-Complaint-Su-v.-Advanced-Care-Staffing-Sam-Klein.pdf
Lawsuit against PetSmart for its use of TRAPs, Scally v. PetSmart: Groundbreaking Lawsuit Seeks to Block PetSmart’s Predatory Lending Scheme
Lawsuit against Ameriflight for its use of TRAPs, Fredericks v. Ameriflight: Major Cargo Airline Company Accused of Illegally Trapping Pilots in Up to $30,000 of Training Debt Amidst Supply Chain Crisis
Lawsuit against Smoothstack for its use of TRAPs, O’Brien v. Smoothstack: “Unconscionable” Debt-for-Training Scheme Funnels Low-Wage Tech Workers to Fortune 500 Companies; Groundbreaking Class-Action Lawsuit Seeks to Void Predatory Training Repayment Agreement Provisions
###
About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.