N.Y. Labor Law § 1052: Prohibiting the use of employment promissory notes and other similar provisions

* § 1052. Prohibiting the use of employment promissory notes and other

similar provisions. 1. No employer may require, as a condition of

employment, any employee or prospective employee to execute an

employment promissory note. The execution of an employment promissory

note as a condition of employment is unconscionable, against public

policy, and unenforceable, and any such note shall be null and void. If

any such note is part of a larger agreement, the invalidity of such note

shall not affect the other provisions of such agreement.

2. Nothing in this section shall prohibit or render void or

unenforceable any agreement between an employee and an employer that:

(a) requires the employee to reimburse the employer for the cost of

tuition, fees, and required educational materials for a transferable

credential that meets all of the following requirements:

(i) The agreement is set forth in a written contract that is offered

separately from any contract for employment.

(ii) The agreement does not require the employee to obtain the

transferable credential as a condition of employment.

(iii) The agreement specifies the repayment amount before the employee

agrees to the contract, and the repayment amount does not exceed the

cost to the employer of the tuition, fees, and required educational

materials for the transferable credential received by the employee.

(iv) The agreement provides for a prorated repayment amount during any

required employment period that is proportional to the total repayment

amount and the length of the required employment period and does not

require an accelerated payment schedule if the employee separates from

the employment.

(v) The agreement does not require repayment to the employer by the

employee if the employee is terminated, except if the employee is

terminated for misconduct.

(b) requires the employee to pay the employer for any property the

employer has sold or leased to the employee, as long as such sale or

lease was voluntary.

(c) requires 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, unless the

employee was terminated for any reason other than misconduct or the

duties or requirements of the job were misrepresented to the employee.

(d) requires educational personnel to comply with any terms or

conditions of sabbatical leaves granted by their employers; or

(e) is entered into as part of a program agreed to by the employer and

its employees' collective bargaining representative.

* NB Effective December 19, 2026