California employers and employees are entering one of the most significant periods of employment-law change in recent years. New laws taking effect in 2026 affect minimum wage requirements, employee classification, repayment agreements, personnel records, workplace notices, pay transparency, layoffs, leave rights, pay-data reporting, data breaches, and other areas of workplace compliance.
For California businesses, these changes are more than administrative updates. An outdated employment agreement, job posting, payroll practice, personnel-file procedure, or workplace policy can potentially expose an employer to penalties, wage claims, government enforcement, or employment litigation. Employees, meanwhile, should understand the expanded protections and remedies available under California law.
Paul P. Cheng, a former prosecutor, judicial mediator, and experienced trial attorney at the Law Offices of Paul P. Cheng & Associates, provides the following overview of several important California employment-law developments for 2026.
Important: This article provides general information only and is not legal advice. Employment laws are highly fact-specific, and businesses should have their policies and practices reviewed based on their particular workforce and circumstances.
1. California Minimum Wage and Exempt Salary Thresholds Increase
Effective January 1, 2026
California's statewide minimum wage increases to $16.90 per hour in 2026. Because California's salary threshold for many executive, administrative, and professional exemptions is tied to the state minimum wage, the increase also affects whether certain salaried employees may continue to qualify as exempt.
The general minimum annual salary threshold for these exemptions rises to $70,304.
Separate compensation thresholds apply to certain exempt computer software professionals and licensed physicians and surgeons. For 2026, the applicable hourly thresholds increase to $58.85 for qualifying computer software employees and $107.17 for qualifying licensed physicians and surgeons, subject to the requirements of California law.
Employers must also determine whether a city or other local jurisdiction imposes a higher minimum wage.
Why This Matters
Paying an employee a salary does not, by itself, make that employee exempt from California overtime requirements. Employers must generally satisfy both the applicable salary threshold and the duties test for the exemption being claimed.
A classification that was compliant in a prior year may therefore require review when compensation thresholds change.
Employers should audit exempt classifications, salaries, job duties, timekeeping practices, and overtime policies before assuming existing classifications remain compliant.
2. AB 692: Restrictions on Employee Repayment Agreements
Effective January 1, 2026
AB 692 substantially restricts contractual provisions requiring workers to repay certain employment-related payments when the employment relationship ends.
These provisions can arise in connection with signing bonuses, relocation assistance, training expenses, and other payments or benefits conditioned on continued employment.
The new law generally prohibits many forms of repayment obligations while preserving limited exceptions that must satisfy specific statutory requirements.
Noncompliant provisions may be unenforceable and can expose an employer to substantial liability. Depending on the circumstances, workers may seek actual damages or statutory damages of $5,000 per worker, whichever is greater, as well as other available relief, including attorneys' fees and injunctive relief.
Employer Action Item
Businesses should review:
- Offer letters;
- Employment agreements;
- Signing and retention bonus agreements;
- Relocation agreements;
- Training reimbursement provisions; and
- Separation-related repayment obligations.
Employers should not assume that a repayment provision remains enforceable simply because the employee voluntarily signed it.
3. SB 513: Education and Training Records Become Part of Personnel Records
Effective January 1, 2026
SB 513 expands California's personnel-record requirements by addressing education and training records maintained by employers.
Relevant records may include information concerning:
- The employee's training;
- The training provider;
- Dates of training;
- Duration or number of training hours;
- Competencies or certifications obtained; and
- Other required training information.
These records may fall within the materials employees are entitled to inspect or copy under California Labor Code requirements.
Employer Action Item
Employers should establish consistent procedures for documenting employee training and maintaining those records in an accessible personnel-record system.
This is particularly important for businesses operating in regulated industries or relying heavily on workplace safety, harassment-prevention, licensing, technical, or professional training.
4. SB 294: Workplace “Know Your Rights” Notices and Emergency Contacts
Key requirements begin in 2026
SB 294 creates significant new workplace notice and procedural requirements.
Covered employers must provide employees with an annual “Know Your Rights” notice, including information regarding specified workplace and legal protections. Employers may also need to provide the notice in the language primarily used by the employee where required.
The law also establishes requirements involving employee-designated emergency contacts in connection with certain workplace arrests or detentions.
Why Employers Should Pay Attention
Compliance may require more than adding another document to the employee handbook. Employers should consider whether they have an internal procedure addressing:
- Who is responsible for distributing required notices;
- How employee language preferences are documented;
- How distribution is recorded;
- How emergency-contact information is maintained;
- Who responds if immigration or other law-enforcement personnel appear at a workplace; and
- How management should respond to an employee's arrest or detention.
Depending on the violation, statutory penalties can become significant, particularly when multiple employees are affected.
Employers with immigrant workforces or operations in industries likely to encounter workplace enforcement activity should give particular attention to these requirements.
5. SB 642: California Pay Transparency and Equal Pay Requirements Expand
Effective January 1, 2026
California continues to strengthen its pay-transparency and equal-pay laws.
For covered employers with 15 or more employees, job postings must provide a qualifying pay scale reflecting the compensation range the employer reasonably expects to pay for the position.
The law also strengthens California's equal-pay protections and expands the importance of examining compensation beyond an employee's base salary.
Why This Matters
Employers should not treat pay transparency as simply a recruiting issue.
Differences in compensation among employees performing substantially similar work can create legal exposure when the employer cannot adequately explain and document the legitimate basis for those differences.
Businesses should review:
- Job advertisements;
- Pay ranges;
- Bonus structures;
- Benefits and other compensation;
- Promotion practices;
- Starting-pay decisions; and
- Compensation differences among employees performing substantially similar work.
A proactive pay-equity audit can identify disparities before they develop into disputes or litigation.
6. SB 617: Additional Information Required in WARN Notices
Effective January 1, 2026
California employers subject to WARN requirements should update their procedures for mass layoffs, relocations, and covered business closures.
SB 617 requires additional information concerning available support or transition services and CalFresh resources to be included in applicable notices.
Where an employer elects to provide specified support services, additional timing requirements may apply.
Employer Action Item
Businesses contemplating restructuring, downsizing, relocation, or closure should consult employment counsel early in the planning process.
WARN compliance should not be left until the day layoff notices are scheduled to be distributed.
7. SB 477: Changes Affecting FEHA Complaints and Litigation Timing
Effective January 1, 2026
SB 477 addresses procedures involving complaints under California's Fair Employment and Housing Act (FEHA), including certain group or class complaints and the timing associated with right-to-sue procedures.
These changes may affect both employees pursuing discrimination-related claims and employers defending against them.
Litigation Consideration
Employers should carefully evaluate document-retention practices when a workplace complaint, administrative charge, or potential FEHA dispute arises.
Emails, personnel records, performance reviews, text messages, investigation materials, payroll information, and electronically stored communications can become important evidence long after the underlying workplace event occurred.
8. AB 406: Expanded Leave Protections for Victims, Jurors, and Witnesses
Requirements phase in beginning October 1, 2025, with additional implications in 2026
California has expanded protections concerning employees who serve as jurors or witnesses and employees affected by certain crimes.
The law also strengthens protections for qualifying victims and, in specified circumstances, their family members who need time away from work for legal proceedings or other protected purposes.
Employers may not retaliate against employees for exercising protected leave rights.
Employer Action Item
Employee handbooks and leave policies should be reviewed to ensure that managers and HR personnel understand:
- Which absences are protected;
- When paid leave may be used;
- What documentation may lawfully be requested; and
- What conduct could constitute retaliation.
9. SB 464: Changes to California Pay Data Reporting
Changes begin January 1, 2026; additional expansion in 2027
California's pay-data reporting requirements continue to evolve.
SB 464 includes additional requirements concerning the handling and reporting of employee demographic information. Covered employers should maintain required demographic information separately from ordinary personnel records where required and ensure that personnel responsible for reporting understand the applicable confidentiality and reporting obligations.
Further reporting changes are scheduled for 2027, including expansion of occupational categories.
Employer Action Item
Businesses subject to California pay-data reporting should review their HR information systems now rather than waiting for the next reporting deadline.
10. AB 858: COVID-19 Recall and Rehire Rights Extended
Extended through January 1, 2027
Certain workers in industries heavily affected by the COVID-19 pandemic continue to receive statutory recall and rehire protections.
Covered employers may have obligations to notify eligible former employees of available positions and provide qualifying workers priority in rehiring.
The requirements are particularly relevant to specified hospitality and related industries.
Employers subject to the law should continue maintaining accurate records of former employees who may possess statutory recall rights.
11. AB 578: Delivery-Platform Pay Transparency and Tip Protections
Effective January 1, 2026
New requirements affect certain delivery platforms and the individuals performing delivery services through those platforms.
The law strengthens compensation transparency and tip protections, including restrictions against using customer tips to offset compensation obligations in prohibited circumstances.
Business Consideration
Companies operating app-based delivery platforms or similar business models should review:
- Compensation calculations;
- Earnings statements;
- Tip policies;
- Customer refund procedures; and
- Worker-facing compensation disclosures.
12. AB 250: Temporary Revival Window for Certain Sexual-Assault Claims
January 1, 2026 through December 31, 2027
AB 250 creates a limited period during which certain otherwise time-barred civil claims involving sexual assault may potentially be brought.
The legislation can also have implications for entities accused of concealing or facilitating misconduct under circumstances covered by the statute.
Why Organizations Should Review Their Risk
Businesses and institutions that receive historic allegations should avoid assuming a claim is automatically barred simply because the alleged conduct occurred years ago.
Organizations should evaluate record preservation, historical investigations, insurance coverage, reporting procedures, and litigation strategy with qualified counsel.
13. SB 446: California Data-Breach Notification Deadlines
Effective January 1, 2026
California businesses should also review their cybersecurity incident-response procedures.
SB 446 imposes more specific timing requirements for certain data-breach notifications. Businesses generally must provide required consumer notices within 30 calendar days after discovery or notification of a qualifying breach, subject to statutory exceptions.
Where a breach triggers reporting to the California Attorney General, additional timing requirements may apply.
Why This Is Also an Employment Issue
Employers frequently maintain significant quantities of sensitive employee information, including Social Security numbers, payroll information, bank information, benefits records, addresses, tax documents, and identification records.
A data breach can therefore create both privacy exposure and an employee-relations problem.
Employers should have a written incident-response plan identifying who will investigate, preserve evidence, communicate with affected individuals, coordinate with insurers, and determine applicable notification requirements.
2026 California Employer Compliance Checklist
California businesses should consider completing a comprehensive employment-law review that addresses the following areas:
Compensation and Classification: Confirm compliance with the 2026 minimum wage, exempt salary thresholds, overtime requirements, and applicable local minimum-wage ordinances.
Employment Agreements: Review signing bonuses, retention incentives, relocation payments, training reimbursement provisions, and other repayment clauses for compliance with AB 692.
Recruiting and Pay Transparency: Confirm that covered job postings contain compliant pay ranges and review compensation practices for potential equal-pay concerns.
Personnel Records: Update procedures for retaining and providing access to required education and training records.
Employee Notices: Establish procedures for distributing and documenting required 2026 workplace notices, including applicable multilingual notices.
Immigration and Workplace Enforcement: Develop an internal response protocol and designate appropriate personnel to handle workplace enforcement situations.
Leave Policies: Update employee handbooks and manager training concerning victim-related leave, jury duty, witness obligations, and anti-retaliation protections.
Layoffs and Restructuring: Update WARN templates and consult counsel before implementing covered layoffs, relocations, or closures.
Pay Data Reporting: Review demographic-data storage, reporting procedures, and upcoming 2027 reporting changes.
Data Security: Update incident-response and breach-notification procedures to account for California's new deadlines.
Industry-Specific Requirements: Determine whether additional recall, rehire, delivery-platform, hospitality, or other industry-specific requirements apply.
California Employment Law Compliance and Litigation Counsel
California employment law continues to become more complex, and the 2026 changes affect nearly every stage of the employment relationship—from recruiting and compensation to workplace policies, personnel records, layoffs, and termination.
For employers, early compliance can be substantially less costly than defending a wage-and-hour claim, discrimination lawsuit, class action, or government enforcement proceeding after a problem develops.
For employees, understanding these changes can be equally important. A worker may have legal remedies when an employer fails to pay required wages, improperly classifies a position, retaliates for protected activity, violates equal-pay requirements, or otherwise infringes rights protected under California law.
The Law Offices of Paul P. Cheng & Associates represents businesses and individuals in California employment disputes and provides counsel regarding employment-law compliance, workplace investigations, wage-and-hour issues, discrimination and retaliation claims, employment agreements, and litigation.
Paul P. Cheng's background as a former prosecutor, judicial mediator, and trial attorney provides a litigation-focused perspective when evaluating both compliance risks and workplace disputes.
Speak With a California Employment Attorney
The 2026 California employment-law changes create new responsibilities for employers and expanded protections for workers. Businesses should review existing policies before a compliance issue develops, while employees who believe their workplace rights have been violated should obtain advice based on the specific facts of their situation.
To discuss a California employment-law matter with the Law Offices of Paul P. Cheng & Associates, call 626-356-8880 or schedule a consultation through the firm's website.
Disclaimer: This publication is provided for general informational purposes only. It does not constitute legal advice and does not create an attorney-client relationship. Laws and regulations may change, and the application of any law depends on the specific facts and circumstances of each matter.