Recent Changes And Updates To New York Law

Settling into the new year, employers should be aware of several recent updates to New York state and city law. Specifically, in the past few months, New York has seen new laws, amendments, and regulations concerning (1) stay-or-pay provisions, (2) disparate impact claims, (3) safe and sick time, (4) executive and administrative exemptions and minimum wage laws and (5) pay data transparency. This column addresses each of these updates and relevant considerations for employers.

Stay-or-Pay Provisions

On Dec. 19, 2025, New York Governor Kathy Hochul signed the Trapped at Work Act (New York Labor Law §§ 1050–1055). Although the law became effective immediately, its effective date has since been delayed by a year by an amendment, signed by Governor Hochul on Feb. 13, 2026.

The legislation in its amended form prohibits employers from requiring employees to enter into promissory notes or other similar provisions, as a condition of employment, that "trap" individuals at work by requiring the employee to repay the employer should the employee leave employment before a specified period of time, even due to poor working conditions. The law defines "employment promissory note" as "any instrument, agreement, or contract provision that requires an employee to pay the employer, or the employer's agent or assignee, a sum of money if the employee's employment relationship with a specific employer terminates before the passage of a stated period of time."

6. Minimum Wage of $15 an Hour Biden is calling to more than double the federal minimum wage to $15 an hour from $7.25.

The law does not prohibit agreements between an employee and an employer that (1) require the employee to reimburse the employer for the cost of tuition, fees, or required educational materials for a transferable credential that meets outlined requirements, (2) require the employee to pay the employer for any property sold or leased to the employee, (3) require educational personnel to comply with any terms or conditions of sabbatical leaves granted by their employers, (4) require the employee to repay a financial bonus, relocation assistance or other non-educational incentive or other payment or benefit that is not tied to specific job performance or (5) are entered into as part of a program agreed to by the employer and its employees' collective bargaining representative.

A violation will result in fines of not less than $1,000 and not more than $5,000 for each violation, and any employee sued by an employer seeking to enforce a promissory note will be entitled to an award of attorney's fees.

Before the February 13th amendment, among other differences, the Act (1) applied to workers generally (not just employees), (2) lacked the exemptions for transferable credits, financial bonuses, relocation assistance and other non educational incentives and (3) lacked a complaint filing process for employees or prospective employees and criteria for the Department of Labor to consider when assessing penalties.

Disparate Impact Claims

Also on Dec. 19, 2025, Governor Kathy Hochul signed Senate Bill S8338, which amends the New York Human Rights Law (NYSHRL) to codify the disparate impact standard. The amendment became effective immediately.

The amended law expands how an unlawful discriminatory practice may be established under New York Executive Law §296. Under the amended law, an employee may establish that a practice is discriminatory based on its discriminatory effect, even if not motivated by discriminatory intent. Specifically, the amendment establishes that "a practice has a discriminatory effect where it actually or predictably results in a disparate impact on a group of persons, because of their membership in a class protected under this section."

It also clarifies that such a practice may be lawful if supported by a "legally sufficient justification," which exists where the practice "is job related for the position in question and consistent with business necessity" and "that the business necessity could not be served by another practice that has a less discriminatory effect." The complainant has the burden of proving that a challenged practice "caused or predictably will cause" a discriminatory effect, after which the burden shifts to the employer to prove that a legally sufficient justification exists for the practice. The burden then shifts back to the complainant to prove that the business necessity could be served by an alternative practice with a less discriminatory effect.

Although President Donald Trump's April 23, 2025 Executive Order (Restoring Equality of Opportunity and Meritocracy) directs agencies not to pursue disparate impact claims at the federal level and the disparate impact theory may be subject to constitutional challenge, New York employers should still monitor employment practices to ensure against disparate impact.

Safe and Sick Time

Effective Feb. 22, 2026, New York City employers must now allow safe and sick time under the City's Earned Safe and Sick Time Act to be used for additional reasons: to provide care for a child or care recipient, to attend a legal proceeding for subsistence benefits or housing, to respond to a public disaster or to respond to workplace violence.

The amendment also requires that employers also provide an additional 32 hours of unpaid safe and sick time to employees per year, which must be made available for use immediately upon hire and subsequently on the first day of each calendar year. Employers are not required to carry over to the following calendar year any unused safe and sick time provided pursuant to this law. Accordingly, New York City employers should review and revise their time-off policies and procedures for general compliance with these recent amendments.

Executive and Administrative Exemptions and Minimum Wage

Effective Jan. 1, 2026, the minimum wage in New York increased to $17 per hour in Nassau, Suffolk and Westchester counties and in New York City and $16 per hour elsewhere in New York state. These increases were set forth in Hochul's New York State 2024 Budget Agreement. Additionally, the minimum weekly salary for overtime exempt administrative and executive employees increased on Jan. 1st to $1,275 per week for employees who work in Nassau, Suffolk and Westchester counties and in New York City and $1,199.10 per week for employees who work elsewhere in New York state.

Pay Data Transparency Requirements

On Dec. 4, 2025, the New York City Council overrode then-Mayor Eric Adams' veto of two local laws regarding pay data. These laws, which became effective on Dec. 4, 2025, require private employers with more than 200 employees working in New York City to submit a pay data report to a designated agency and require the designated agency (in coordination with the Commission on Gender Equity and other relevant agencies) to conduct annual pay equity studies based on the pay data reports and to publish its findings.

These findings are to include (1) an analysis of the data collected, including but not limited to a statement of any disparities identified, (2) a description of every statistical methodology used to analyze the data and (3) recommendations regarding employer action plans for addressing any disparities identified. The data analyses will not reveal information about specific individual employers. However, a list of employers who do not comply with the submission requirements following 30 days' notice to comply following such noncompliance will be published annually online. Additionally, non-compliant employers are subject to civil penalties, up to a $5,000 fine.

Of note, the mayor has one year from the law's effective date to designate the required agency, and that agency has one year after being designated to develop a standardized fillable form for the pay data reports. Accordingly, employers do not have any current reporting requirements under this law. However, employers should anticipate increased internal data collection and reporting requirements in the future.

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