Practical compliance notes for California employers
As we head into 2026, California employers should expect another meaningful round of statutory changes affecting hiring, pay transparency, leave, recordkeeping, and wage and hour compliance. The summary below highlights key laws taking effect January 1, 2026 (unless otherwise noted) and is intended to help employers identify policy updates to address now.
This is general information and is a non-exhaustive list of legal updates. This is not legal advice for any specific situation.
Pay transparency and pay equity
Pay scale disclosures and expanded Equal Pay Act exposure (SB 642). SB 642 updates the definition of “pay scale” to require a good-faith estimate of the range the employer reasonably expects to pay upon hire, and it expands potential pay-equity exposure by extending limitations and broadening recoverable “wages” for certain Equal Pay Act purposes. Employers should review job posting templates, recruiting workflows, and pay-range documentation practices to ensure the pay range is supportable and documented as a good-faith estimate.
Pay data reporting: data storage, penalties, and more job categories (SB 464). SB 464 tightens California’s pay data reporting rules for covered employers (generally employers with 100+ employees and/or 100+ workers hired through labor contractors) by requiring certain demographic data used for reporting to be stored separately from personnel files and by strengthening enforcement, including civil penalties in certain circumstances. Starting with the 2026 reporting cycle (reports due May 2027), reporting expands from 10 categories to 23 based on job categories. Employers should calendar reporting deadlines and begin planning for the expanded category framework.
Anti-discrimination and harassment
Revival window for certain time-barred sexual assault claims (AB 250). AB 250 opens a limited revival period for certain claims that would otherwise be time-barred, where the plaintiff can show a qualifying “cover up.” The revival window runs January 1, 2026 through December 31, 2027. Employers should evaluate document retention and litigation hold practices when allegations involve historic conduct.
Bias mitigation training safe-harbor clarification (SB 303). SB 303 clarifies that an employee’s good-faith assessment or acknowledgment of personal bias made as part of a bias mitigation training, when solicited or required, does not by itself constitute unlawful discrimination under FEHA.
Layoffs and Cal-WARN notices
Enhanced Cal-WARN notice content (SB 617). SB 617 amends Cal-WARN notice requirements to require employers to include additional information, including whether the employer will coordinate services through the local workforce development board (or another entity), and CalFresh-related information. Employers that may conduct covered layoffs, relocations, or terminations should update Cal-WARN templates now.
Leave updates
Expanded protected leave and PSL alignment for court-related reasons (AB 406). AB 406 expands certain leave protections involving judicial proceedings and jury duty. Portions took effect earlier, with additional changes effective January 1, 2026. Effective January 1, 2026, paid sick leave and protected leave may be used in additional circumstances relating to qualifying judicial proceedings for certain crimes involving the employee or (in some cases) a family member. Employers should review leave policies, call-in procedures, and manager training to ensure requests are routed correctly and handled consistently.
Paid Family Leave to care for a “designated person” (SB 590, effective July 1, 2028). While not immediate, SB 590 is worth flagging now for longer-range planning. It expands Paid Family Leave eligibility beginning July 1, 2028 to include caring for a seriously ill “designated person,” using a definition aligned with the CFRA “designated person” concept.
Personnel file and record-keeping
Training and education records added to personnel records (SB 513). SB 513 expands personnel records relating to performance to expressly include education and training records, and it requires employers that maintain such records to ensure they contain specific information (including the employee name, training provider, date/duration, competencies, and resulting certification/qualification). Employers should confirm where training records live (HRIS, LMS, vendor portals) and ensure they can be produced when requested.
Wage and hour and related compliance
Statewide minimum wage increases to $16.90/hour. The California minimum wage increases to $16.90/hour effective January 1, 2026 (with certain industries and local jurisdictions subject to higher minimum wages). This change also impacts wage-and-hour calculations tied to the state minimum wage, including the minimum salary threshold for many exempt classifications.
“Stay-or-pay” repayment provisions largely prohibited (AB 692). AB 692 restricts employment contract terms entered into on or after January 1, 2026 that require workers to repay a debt if the employment relationship ends, subject to defined exceptions and strict requirements (including proration rules and other safeguards in qualifying scenarios). Employers using retention bonuses, relocation repayments, or training-related agreements should have counsel review templates before rollout in 2026.
Rest period exemption extended for certain petroleum facility safety-sensitive roles (AB 751). AB 751 extends (and clarifies) the rest period exemption for specified petroleum facility safety-sensitive positions, including certain alternative feedstock refinery operations.
Tip theft enforcement expanded (SB 648). SB 648 authorizes the Labor Commissioner to investigate and issue citations or bring civil actions for gratuities unlawfully taken or withheld, strengthening enforcement of existing tip protections. Hospitality employers should re-audit tip pooling and tip distribution practices.
Meal period exemption expanded to water corporations (SB 693). SB 693 expands categories of employees exempt from meal period requirements to include certain employees of a “water corporation” (as defined), typically in the context of qualifying collective bargaining agreements.
Penalties for unsatisfied final wage judgments (SB 261). SB 261 increases exposure for employers with unpaid final wage judgments, including potential civil penalties tied to the outstanding judgment after specified time periods (including an “up to triple” penalty framework after 180 days in certain circumstances), subject to potential reduction upon a showing of good cause. Employers should treat wage judgments as urgent compliance items, not back-burner liabilities.
Vehicle ownership does not equal independent contractor status; trucking amnesty program (SB 809). SB 809 clarifies that mere vehicle ownership does not determine independent contractor status, confirms expense indemnification principles for employee vehicle use, and creates a Construction Trucking Employer Amnesty Program with a pathway to reduce certain misclassification penalty exposure for eligible contractors who meet program requirements.
Right-to-rehire extension for certain displaced service workers (AB 858). AB 858 extends certain recall/rehire protections for covered hospitality and related service workers through January 1, 2027, and preserves DLSE enforcement timing for covered violations occurring before the revised sunset.
Wage garnishment return requirements (AB 774). AB 774 requires employers responding to an earnings withholding order to provide additional information in the employer’s return to the levying officer. Employers should ensure payroll has updated forms and instructions in place for 2026.
Workplace notices and employee communications
Annual “Workplace Know Your Rights Act” notice (SB 294). SB 294 requires employers to provide a stand-alone written notice of certain workplace rights to current employees and new hires, beginning on or before February 1, 2026, and annually thereafter. The Labor Commissioner is expected to publish a template notice (and update it annually). Employers should also plan for language and process requirements tied to the template notice, including issuing the notice in the language normally used to communicate with employees and retaining compliance records.
Gig economy
Collective bargaining framework for transportation network company drivers (AB 1340). AB 1340 establishes a framework allowing qualifying transportation network company drivers to organize and engage in a collective bargaining process as an industry-wide unit, without automatically converting driver status for other legal purposes. Businesses operating in this space should monitor implementing guidance and related challenges.
Vetoed bills to be aware of
Governor Newsom vetoed several bills affecting employers, including SB 355 (judgment-debtor employer notice requirements) and other proposals discussed during the 2025 signing cycle. Employers should continue monitoring whether any vetoed concepts reappear in the 2026 legislative session.
Practical next steps for employers
