Key Legal Updates for New York Employers

Federal, state, and local laws governing the employer-employee relationship are constantly evolving. New York State and New York City are among the most active jurisdictions in passing new legislation that affects the workplace. Employers should try to keep themselves up to date with the various legal obligations governing their business, including the following key developments.     

Amendments and Proposed Rules to NYC Earned Safe and Sick Time Act

The amendments to the City’s Earned Safe and Sick Time Act (“ESSTA”) went into effect on February 22, 2026. As previously discussed here, the law now mandates that New York City employers provide employees with 32 hours of unpaid sick/safe time (in addition to existing paid sick/safe time entitlements) and broadens the permissible reasons for taking leave under the ESSTA. The amendments also incorporate prenatal leave rules previously enacted by the State and replace prior requirements for temporary schedule changes.

New York City’s Department of Consumer and Worker Protection (“DCWP”), the agency tasked with enforcing the ESSTA, issued proposed rules for implementing the amendments. Some notable parts of the DCWP’s proposed rules include:

• Renaming “safe/sick time” as “protected time off” throughout existing rules (although employers are allowed to continue using the “sick/safe time” phrase in their policies).
• Mandating employers’ written policies include language about the amount of unpaid protected time off provided to employees, including notice that the unpaid time is available for use immediately.
• Clarifying that employers who provide additional paid protected time off beyond the ESSTA’s obligations can use such paid time off to fulfill their obligations to provide 32 hours of unpaid leave, provided that the additional paid time off is immediately available for use.
• Informing employees of the amount of protected time off accrued and used during a relevant pay period through pay statements or other electronic systems used to issue pay statements, and differentiating between paid and unpaid time off.
• Updating the penalty provisions of the law for failure to provide unpaid protected time off and paid prenatal leave.

Comments to the proposed rules are now closed, and final rules are expected by the DCWP soon.

New York Minimum Wage Increase

New York raised the minimum wage to $17.00/hour for employees in New York City, Long Island, and Westchester County effective January 1, 2026. The minimum wage for employees in other areas of the State has also been increased to $16.00/hour.

Additional information regarding tipped and other workers not covered by the general minimum wage rates is available here.

Changes to Exempt Salary Threshold

Employees classified as “exempt” from minimum wage and overtime requirements must satisfy certain job duties and salary requirements. In addition to satisfying one of the job duties tests associated with an exemption under federal and state law, employees must also be paid on a salary basis and earn at least a specific minimum weekly salary (the “salary threshold”) to maintain their exempt status. In New York State, this salary threshold is much higher than the federal salary threshold, so New York employers must ensure compliance with the State’s more onerous requirements.

Effective January 1, 2026, the salary threshold for exempt status increased to $1,275.50 per week ($66,300 annually) for New York City, Long Island, and Westchester County. The salary threshold for the rest of New York increased to $1,199.10 per week ($62,353.20 annually).

Ban of the Use of Credit History in Employment Decisions

Effective April 18, 2026, New York employers, labor organizations, employment agencies, and/or their agents are prohibited from requesting or using a person’s consumer credit history for employment decisions, with specific limited exemptions.

For more details on the recent amendments to the New York Fair Credit Reporting Act, see our previous blog here.

NYSHRL Prohibition on Retaliation Based on Reasonable Accommodation Requests

New York now formally prohibits employers from retaliating against individuals who request a reasonable accommodation under the New York State Human Rights Law (“NYSHRL”). The State passed A4898 on December 5, 2025 to close a loophole in the NYSHRL by clarifying that its anti-retaliation provision extends to individuals requesting reasonable accommodations. Such retaliation was already unlawful under the Americans with Disabilities Act (“ADA”) and the New York City Human Rights Law (“NYCHRL”).

Ban on Certain “Stay or Pay” Agreements

On December 19, 2025, New York Governor Hochul signed the Trapped at Work Act into law, which broadly prohibited promissory notes that required workers repay their employer for certain training costs if the worker leaves before a specific period. Specifically, the law prohibited employers from requiring, as a condition of employment, that any current or prospective worker execute “any instrument, agreement, or contract provision that requires a worker to pay the employer, or the employer’s agent or assignee, a sum of money if the worker leaves such employment before the passage of a set period of time,” including any provision that characterizes such repayment as reimbursement of training provided to the worker. The original law contained certain limited exclusions and provided that it was effective “immediately.”

When Governor Hochul signed the bill, however, she noted that certain aspects of the law were ambiguous and, as a result, signed it into law via a “Chapter Amendment” – a legislative tool whereby the bill is conditioned on the legislature making amendments to the law as written.

On January 6, 2026, the legislature amended the Trapped at Work Act, which was signed into law on February 13, 2026. The amendments removed vague language and clarified which repayment agreements are not prohibited by the law. Specifically, employers are allowed to recover the costs of “transferable credentials” (i.e., any degree, diploma, license, certificate, etc., that is recognized by employers in the relevant industry or provides skills or qualifications that enhance the employee’s employability in the relevant industry) where the agreement also:

• Is set forth in a written contract that is offered separately from any contract for employment;
• Does not require the employee obtain the transferable credentials as a condition of employment;
• 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 education materials;
• Provides for prorated repayment during the repayment period proportional to the total repayment amount and does not require an accelerated payment schedule if the employee separates from the employer; and
• Does not require repayment if the employee is terminated, unless terminated for misconduct.

Signing bonuses, retention bonuses, relocation assistance, and similar incentive payments are also expressly carved out under the amended Trapped at Work Act. Specifically, the amended law does not prohibit any agreement between an employee and employer that 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.”

Further, the amendment limits the scope of covered individuals from “worker[s]” to only “employee[s],” which are defined as “any person employed for hire by an employer in any employment.”

The amended Trapped at Work Act is effective December 19, 2026. On its face, the amendment does not indicate whether the revised effective date applies to agreements entered into prior to December 19, 2026. As a result, employers should be mindful that, once the amended law becomes effective, agreements in place on or after December 19, 2026 may be subject to evaluation under the amended statute, even if they were executed earlier, and should consider proactively revising or updating their templates to reduce the risk of future enforceability issues.

NYC Pay-Data Reporting Requirements for Large Employers

On December 4, 2025, the New York City Council voted to override Mayor Adams’s veto of two bills, Int. 982-A-2024 and Int. 984-A-2024, enacting new pay-data reporting requirements for large private employers.

Under Int. 982-A-2024, private employers with at least 200 employees working in New York City will be required to submit annual pay-data reports to a designated city agency. The reports must include employee demographic and occupational information broken down by job title, pay band, race, ethnicity, and sex. Reports may be submitted anonymously but must be accompanied by a signed statement from an authorized representative confirming the accuracy of the data.

Under Int. 984-A-2024, the designated agency (which is not yet identified) will use the submitted data to conduct an annual pay equity study evaluating whether disparities in compensation exist based on gender, race, or ethnicity, and will publish the findings in a manner that does not reveal any particular employer’s or employee’s identifying information.

Although the legislation took effect immediately, employers are not required to submit data until a reporting framework is established. The mayor must designate a responsible city agency by December 2026. That agency will then have up to one year to develop a standardized reporting form. Covered employers will be required to begin filing reports within one year after the form is published, with annual submissions required thereafter. Employers that fail to comply face a written warning, and failure to cure may result in fines between $1,000 and $5,000.

Codification of Disparate Impact Liability under NYSHRL

On December 19, 2025, Governor Hochul signed Senate Bill S8338 into law, which amended the New York State Human Rights Law (“NYSHRL”) and expressly codified the disparate impact theory of discrimination. Under the amendment, a facially neutral employment practice may be deemed unlawful if it actually or predictably results in a disproportionate adverse effect on a protected group – regardless of whether there is discriminatory intent.

To establish a claim, a plaintiff must show that a specific policy or practice caused or predictably will cause a disparate effect on a legally protected class. If this is shown, the employer must establish a legally sufficient justification by showing that: (1) the policy is job-related and consistent with a business necessity, and (2) the business necessity cannot be achieved through a less discriminatory alternative. Even if the employer meets this burden, the plaintiff can still prevail by showing that a less discriminatory alternative exists.

While New York courts had already recognized disparate impact liability, this amendment formally codifies the standard established by case law and aligns the NYSHRL with federal antidiscrimination law (Title VII) and New York City Human Rights Law. This is particularly significant because it runs counter to the Trump Administration’s Executive Order directing the Equal Employment Opportunity Commission to cease pursuing disparate impact claims under federal law.

Takeaways

New York employers should review their existing policies and practices with counsel to ensure they are in compliance with these new and forthcoming changes.