Are pay-or-stay agreements legal?
January 05, 2026
Not in some locations. A pay-or-stay agreement requires an employee to stay on a job for a set period or repay training costs. As of the first of this year, under the Training Repayment Agreement Provisions (TRAPs) Act, it’s unlawful for employers in California to enforce such agreements (with some exceptions). New York has a similar law, which became effective on December 19, 2025. Some other states—Colorado, Illinois, Maine, Maryland, Rhode Island, Virginia, and Washington—limit the use of such agreements by income or profession. Watch for developments in your state. #IdeaoftheDay
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