Happy New Year! The Regulators Would Like A Word

Happy New Year! The Regulators Would Like A Word

Happy New Year! We’re thrilled to bring you another year of legal updates, practical tips, and momentary respites from all the [non-labor and employment law] shenanigans currently going on. And if you’re here primarily to escape being inundated with James Clear interviews, newsletters, podcasts, and think pieces, you too are welcome!

(Seriously though, impeccable marketing and a master class in capitalizing on New Year’s resolutions from that dude’s team – from one professional fearmonger to another: respect, James. Respect.)

In our first post of 2026, we’re covering a brand-new New York law aimed at “stay-or-pay” agreements, along with a few updates out of our favorite federal agencies, both of which appear well-rested, fully staffed, and ready to make some noise.

If you’ve already optimized your morning routine, color-coded your goals, and embraced being “the designer of your world and not merely the consumer of it” (it really is catchy), sit back and enjoy!

New York Bans “Stay-or-Pay” Agreements (Sort Of)

While you may have never heard the phrase “stay-or-pay agreement”, you’re probably familiar with the concept. An agreement or provision that requires a worker to repay an employer for certain fees in the event the worker resigns before a certain date. Currently, only one state has enacted legislation banning these types of agreements (and you’ll never guess which . . . ok yes, it’s California). And if you were wishing Santa would finally do something so more states would prohibit these types of agreements, do we have good news for you!

On December 19, Governor Hochul signed the “Trapped at Work Act,” a new – not at all dramatically named – law aimed at these “stay-or-pay” arrangements. The basic rule is simple: if repayment is a condition of employment, it’s out. The law labels these provisions unconscionable, against public policy, and unenforceable (oh my!). That includes agreements dressed up as “training reimbursement,” even when the training comes from a third party.

And this is not just about employees. The statute covers “workers,” a term broad enough to include independent contractors, interns, apprentices, and others. Enforcement has teeth, too: civil penalties per worker, plus fee-shifting if an employer tries (and fails) to enforce one of these provisions.

But, because nothing can ever be simple and clean, Governor Hochul of course signed the bill while openly acknowledging it was “ambiguous in important respects,” particularly because it risked wiping out voluntary tuition assistance programs that actually benefit workers. Thus, the bill was signed with the understanding that the Legislature would fix it in the next session. In other words, “let’s get together in the new year” – politician style.

That fix is already underway. A proposed chapter amendment would push the real effective date out to December 19, 2026 and carve out a narrow exception for voluntary tuition-repayment agreements tied to genuinely transferable, industry-recognized credentials, with strict guardrails and no repayment if the worker is terminated absent misconduct.

For now, employers should assume that these types of arrangements are dead in New York, and that anything tied to training or education needs a hard look. The final version of this law is coming, but the direction of travel is already clear.

The Agencies Are Back . . . and They’re Tweeting

As we’ve been sharing with you, the EEOC has been shaping up to be far more active, with all indications that this activity would be geared toward enforcing more “traditional” workplace norms and taking aim at what it views as unlawful DEI initiatives. And if you were wishing Santa would finally encourage private entities to petition the EEOC to take even more action on these policies, do we have good news for you!

A week before Christmas, America First Legal, a conservative legal group that has made a cottage industry out of challenging corporate DEI programs, publicly asked the EEOC to investigate Penguin Random House for allegedly discriminatory hiring and promotion practices. The theory is familiar by now: Penguin’s DEI efforts allegedly favor certain demographic groups to the detriment of white men, in violation of Title VII.

On its own, this would be just another press-release-as-complaint. What’s changed is that the EEOC now appears to be reading them.

Earlier this year, the agency issued guidance spelling out ways DEI programs may be unlawful. And around the same time as the Penguin Random House story broke, EEOC Chair Andrea Lucas took to X to explicitly encourage white men to come forward with claims of discrimination (yes – seriously).

Whether the Penguin Random House request ultimately leads to an investigation remains to be seen. But the message to employers is already clear: the EEOC is not sitting quietly on the sidelines of the DEI debate, and it appears increasingly eager to wade in.

And not to be outdone, the NLRB is officially back in business!

With recent Senate confirmations, the National Labor Relations Board once again has a quorum, meaning it now has the minimum number of members required to hear cases and issue decisions. For the past several months, that lack of a quorum effectively sidelined the agency. That constraint is now gone. The minor constraint of whether the NLRB as currently structured is actually constitutional, meanwhile, remains unresolved.

So for now, the practical takeaway is this: constitutional questions aside, the NLRB can act. Cases can move. Decisions can be issued. And employers should expect the NLRB to start exercising that authority rather than waiting around for the courts to sort things out.

In other words, the agencies are staffed, active, and increasingly comfortable reminding employers that they exist via social media.

Have a great weekend, everyone! And remember: you don’t rise to the level of your goals, you fall to the level of your systems. Also: if you’ve got questions, you know we’ve got answers.

~ The W + K Team