California's New Employment Laws: Get Ready For 2026

California is updating more than a dozen employment and labor laws—how will these updates impact your workplace policies?

Governor Newsom signed more than a dozen bills this year that expand and modify employer obligations, including employee notice, pay reporting, family leave, and personnel file requirements, while vetoing measures like the "No Robo Bosses Act", SB 7 (regulating use of automated decision systems) and AB 1136 (providing for immigration-related leave). We review new laws signed by the Governor below, and recommend that clients with workers in California review and update their policies to prepare for these changes. Unless stated otherwise, these laws take effect January 1, 2026.

Contracts, Notices, and Personnel Records

SB 294: Workplace Know Your Rights Act

What It Does. Under SB 294 or the Workplace Know Your Rights Act, employers in California will be required to provide a standalone written notice to each current employee of certain workers' rights, on or before February 1, 2026, and annually thereafter. The notice will need to include, among other things, information about workers' compensation benefits, notice requirements related to inspections conducted by an immigration agency, protection against unfair immigration-related practices, the right to organize a union or engage in concerted activity in the workplace, and constitutional rights when interacting with law enforcement at the workplace. The Labor Commissioner will provide on its website a template notice by January 1, 2026. The notice must be provided in a manner the employer normally uses to communicate employment-related information. An employer must also provide this notice to a new employee upon hire and to the employee's authorized representative, if any, by either electronic or regular mail.

SB 294 also requires employers to provide existing employees with the opportunity to name an emergency contact by March 30, 2026, and at the time of hiring for new employees. Employers must further allow employees to provide updated emergency contact information through the duration of employment and to indicate "whether the emergency contact should be notified if the employee is arrested or detained on their worksite, or during work hours or during the performance of the employee's job duties, but not on the worksite, if the employer has actual knowledge of the arrest or detention of the employee." If an employee indicates yes, the law requires the employer to notify the designated emergency contact if the employee is arrested or detained on its worksite.

SB 294 includes an anti-retaliation provision protecting employees who exercise or attempt to exercise rights under the new law.

Enforcement. The law authorizes the Labor Commissioner or a public prosecutor to enforce it and to seek "appropriate temporary or preliminary injunctive relief, including punitive damages, and reasonable attorney's fees and costs." It also provides that "in addition to any other remedy, an employer who violates this part may be subject to a penalty of up to five hundred dollars ($500) per employee for each violation," except that for a violation of the emergency contact-related requirement under the new Section 1555 of the Labor Code, it provides for a penalty "up to five hundred dollars ($500) per employee for each day the violation occurs, up to a maximum of ten thousand dollars ($10,000) per employee." The law further specifies that "[a]n employee, the Labor Commissioner, or a public prosecutor may recover a penalty under this part as a statutory penalty paid to the employee or a civil penalty, but not both, for the same violation."

Potential Waiver. The law provides that its requirements may be superseded, in whole or in part, by a collective bargaining agreement, "if the waiver is explicitly set forth in the agreement in clear and unambiguous terms."

SB 513: Personnel Records to Include Education or Training Records

SB 513 expands Section 1198.5 of the Labor Code, which allows current and former employees to inspect and receive copies of their "personnel records that the employer maintains relating to the employee's performance or to any grievance concerning the employee," to include "education or training records." Under the new law, employers who maintain education or training records must make them available to employees and ensure that they include the following: (1) the name of the employee; (2) the name of the training provider; (3) the duration and date of the training: (4) the core competencies of the training, including skills in equipment or software; and (5) the resulting certification or qualification.

Section 1198.5 otherwise remains the same in practice, including requiring an employer to make the personnel records available for inspection "not later than 30 calendar days from the date the employer receives a written request" and providing that an employee's right to inspect or copy personnel records under Section 1198.5 ceases during the pendency of a lawsuit that relates to a personnel matter against the employee's employer or former employer.

SB 617: WARN Notice

SB 617 requires the written notice provided for a mass layoff, relocation, or termination pursuant to the California Worker Adjustment and Retraining Act to include: (1) information on whether the employer plans to coordinate services through the local workforce development board or another entity, along with a specific statement about local workforce development boards; (2) information regarding CalFresh, the statewide food assistance program; and (3) "a functioning email and telephone number of the employer for contact."

AB 692: Certain Stay-or-Pay Contracts Unlawful

What It Does.AB 692 adds Section 16608 to the Business and Professions Code to prohibit certain contracts entered into, on, or after January 1, 2026, from including a term that does any of the following: (1) requires a worker to pay an employer, training provider, or debt collector for a debt if the worker's employment or work relationship with a specific employer terminates; (2) authorizes the employer, training provider, or debt collector to resume or initiate collection of or end forbearance on a debt if the worker's employment or work relationship with a specific employer terminates; or (3) imposes any penalty, fee, or cost on a worker if the worker's employment or work relationship with a specific employer terminates. A contract or contract term that violates Section 16608 is "void as contrary to public policy."

Enforcement. A worker subject to such a contract or contract term or the worker representative "may bring a civil action on behalf of that worker, other persons similarly situated, or both, in any court of competent jurisdiction." The law further provides that any person found liable for a violation of Section 16608 "shall be liable for actual damages sustained by the worker or workers on whose behalf the case is brought, or five thousand dollars ($5,000) per worker, whichever is greater, in addition to injunctive relief, and reasonable attorney's fees and costs."

Exceptions. The law enumerates the following exceptions: (1) a contract entered into under any loan repayment assistance program or loan forgiveness program provided by a federal, state, or local governmental agency; (2) a contract related to the repayment of the cost of tuition for a transferable credential that meets specific requirements listed under subdivision (b)(2)(B) of Section 16608; (3) a contract related to enrollment in an apprenticeship program approved by the Division of Apprenticeship Standard; (4) a contract for the receipt of a discretionary or unearned monetary payment, including a financial bonus, at the outset of employment that is not tied to specific job performance, provided that specific conditions listed under subdivision (b)(2)(D) of Section 16608 are met; and (5) a contract related to the lease, financing, or purchase of residential property.

Pay Equity and Data Reporting

SB 642: Payment of Wages

Amendments to Key Terms. Section 432.3 of the Labor Code currently requires employers to share or include in a job posting the "pay scale" for a position. The term "pay scale" is defined as "the salary or hourly wage range that the employer reasonably expects to pay for the position." SB 642 amends this definition to "a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the positionupon hire."

Section 1197.5 of the Labor Code currently prohibits employers from paying its employees at wage rates less than the rates paid to employees of the "opposite" sex for substantially similar work, subject to certain exceptions. SB 642 changes "opposite" to "another" sex and adds a definition of "wages" and "wage rates" to include "all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits."

Statute of Limitations. SB 642replaces the language that a civil action for a Section 1197.5 equal pay provision violation may be commenced no later than "two years after the cause of action occurs, except that a cause of action arising out of a willful violation may be commenced no later than three years after the cause of action occurs," with language that such an action may be commenced no later than "three years after the last date the cause of action occurs."SB 642 specifies that a cause of action occurs when any of the following occur: (1) an alleged unlawful compensation decision or other practice is adopted; (2) an individual becomes subject to an alleged unlawful compensation decision or other practice; or (3) when an individual is affected by application of an alleged unlawful compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from the decision or other practice. SB 642 further provides that an employee is entitled to "obtain relief for the entire period of time in which a violation of subdivision (a) or (b) [of Section 1197.5] exists, but not to exceed six years."

SB 464: Employee Pay Data Reporting Expanded

Existing law requires a private employer that has 100 or more employees to submit an annual pay data report to the Civil Rights Department (CRD) that includes the number of employees by race, ethnicity, and sex in 10 specified job categories, the number of employees by race, ethnicity, and sex whose pay falls within federal pay bands, within each job category the median and mean hourly rate for employees having any combination of those characteristics, and the total number of hours worked by each employee counted in each pay band. This report is due each year on the second Wednesday in May, which next year will land on May 13, 2026.

With the passage of SB 464, California has expanded its existing requirements for employers regarding pay data reporting. Under the new law, the following changes will go into effect: (1) any demographic information collected pursuant to Section 12999 of the Government Code "shall be collected and stored separately from employees' personnel records"; (2) the language providing that a court "may" impose a civil penalty of up to $100 per employee upon any employer who fails to file the required report and $200 per employee for a subsequent failure at the request of the CRD has been changed to "shall"; and (3) beginning on January 1, 2027, the number of job categories an employer will be required to report on will expand from 10 to 23.

Leaves of Absence

SB 590: Expanded PFL Benefits to Include Care for Designated Person

Starting on July 1, 2028, California will expand its Paid Family Leave (PFL) to include eligibility for benefits for individuals who take time off work to care for a seriously ill designated person, in addition to a family member. Under SB 590, a "designated person" is defined as "any care recipient related by blood or whose association with the individual is the equivalent of a family relationship." The new law will require an employee seeking benefits for the care of a designated person to identify the designated person at the time of their first claim and, under penalty of perjury, attest to how the relationship is blood-related or the equivalent of a family relationship.

AB 406: Further Revisions to Victim Protections

As previously reported by DWT, AB 2499, which was signed into law last year and became effective January 1, 2025, recast the state's victim-of-violence workplace protection laws under FEHA, expanding upon existing protections to include family members of victims and allowing the use of paid sick time leave for any number of prescribed purposes relating to a qualifying act of violence. This year, AB 406 was introduced to make a number of corrections and conforming amendments, including clarifying that pending cases arising from violations of these laws occurring on or before December 31, 2024, are still valid and within the jurisdiction of the California Division of Labor Standards Enforcement (DLSE).

Wage and Hour

SB 261: Penalties for Unpaid Wage Judgments

SB 261 adds Section 230.05 to the Labor Code, providing that "[i]f a final judgment arising from nonpayment of wages for work performed in this state remains unsatisfied after a period of 180 days after the time to appeal therefrom has expired and no appeal therefrom is pending, the judgment debtor shall be subject to a civil penalty not to exceed three times the outstanding judgment amount, including postjudgment interest then due." SB 261 further provides that a court "shall" assess the entire amount of the penalty, "except to the extent that the court finds that the judgment debtor has demonstrated by clear and convincing evidence good cause to reduce the amount of the penalty." Penalties assessed pursuant to Section 230.05 are to be distributed 50% to the employee or employees in whose favor the judgment was rendered, and 50% to the DLSE.

SB 261 further adds Section 238.10 to the Labor Code, awarding a prevailing plaintiff "all reasonable attorney's fees and costs in any action brought by a judgment creditor, the Labor Commissioner, or a public prosecutor" to enforce a final judgment arising from the nonpayment of wages, penalties, or other amounts owed arising from work performed in California, or to otherwise induce compliance by or impose lawful consequences on a judgment debtor for nonsatisfaction of such a final judgment.

SB 648: Labor Commissioner to Enforce Gratuity Law Violations

Section 351 of the Labor Code provides that "[n]o employer or agent shall collect, take, or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron, or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer." SB 648 adds a subdivision to Section 351, authorizing the Labor Commissioner to investigate and issue a citation or file a civil action "for gratuities taken or withheld in violation of this section."

SB 809: Construction Trucking Employer Amnesty Program and Expenses

SB 809 establishes the Construction Trucking Employer Amnesty Program, pursuant to which an eligible construction contractor can be relieved of liability for statutory or civil penalties associated with the misclassification of construction drivers as independent contractors, if the eligible construction contractor executes a settlement agreement with the Labor Commissioner, by January 1, 2029, whereby the eligible construction contractor agrees to, among other things, properly classify all drivers performing construction work on its behalf as employees. The specific procedures and details of this program are set forth in the newly added Section 2705.9 of the Labor Code.

SB 809 also adds Section 2777.5 of the Labor Code, which is "declarative of existing law" that "[m]ere ownership of a vehicle, including a personal vehicle or a commercial vehicle, used by a person in providing labor or services for remuneration does not make that person an independent contractor."

Labor

AB 288: Expansion of PERB to Private Sector Workers

AB 288 refers to the "inefficacy" of the National Labor Relations Board (NLRB) in expanding the jurisdiction of the California Public Employment Relations Board (PERB) to process representation petitions, certify exclusive bargaining representatives, and decide unfair labor practice cases. A worker may petition PERB if: (1) "[t]he worker is employed in a position that is, or would have been, subject to the National Labor Relations Act as of January 1, 2025, but they lose coverage under the National Labor Relations Act because the National Labor Relations Act is repealed, narrowed, or its enforcement enjoined in a case involving that worker"; or (2) "[t]he worker is employed in a position which is or would be subject to the National Labor Relations Act as of January 1, 2025, but the National Labor Relations Board has expressly or impliedly ceded jurisdiction." AB 288 lists four instances when the NLRB would be deemed to have "ceded jurisdiction," which includes "processing delays resulting in the case remaining pending for more than 12 months without the issuance of a final decision."

AB 288 also amends the "shall" to "may" in Section 1148 of the Labor Code to provide that the California Agricultural Labor Relations Board (ALRB) "may" follow applicable precedents of the National Labor Relations Act (NLRA) as "persuasive authority," but "shall not be obligated to follow these precedents where the board deems it inappropriate to do so."

On October 15, 2025, the NLRB filed a lawsuit against the State of California and PERB, seeking to declare and enjoin AB 288's expansion of PERB's jurisdiction as preempted by the National Labor Relations Act. (See Complaint, National Labor Relations Board v. State of California, E.D. Cal. Case No. 2:25-at-01400, filed Oct. 15, 2025.)

AB 1340: Transportation Network Company Drivers Labor Relations Act

AB 1340, also known as the Transportation Network Company Drivers Labor Relations Act, provides that "TNC drivers have the right to form, join, and participate in the activities of TNC driver organizations, to bargain through representatives of their own choosing, to engage in concerted activities for the purpose of bargaining or other mutual aid or protection, and to refrain from such activities." "TNC driver" is defined as "any person who uses a personal vehicle in connection with a TNC's online-enabled application or platform to connect with passengers in the state pursuant to the TNC license of the TNC." A "TNC" is defined as "person or company that falls under the definition set forth in subdivision (c) of Section 5431 of the Public Utilities Code" or "an organization, including, but not limited to, a corporation, limited liability company, partnership, sole proprietor, or any other entity, operating in California that provides prearranged transportation services for compensation using an online-enabled application or platform to connect passengers with drivers using a personal vehicle." The new law sets forth TNC reporting requirements to be submitted to PERB on a quarterly basis, in addition to establishing procedures for the certification and decertification of TNC driver organizations by PERB, among other requirements.

Other Notable Developments

AB 250: Statute of Limitations Extended on Sexual Assault Claims

AB 250 extends the eligibility period for revival of certain sexual assault claims seeking to recover damages suffered as a result of a sexual assault that occurred on or after the plaintiff's 18th birthday when one or more entities are legally responsible for damages and the entity or their agents engaged in a cover up, that would otherwise be barred by the statute of limitations prior to January 1, 2026. AB 250 also revives claims against "the perpetrator of the sexual assault" and states that a failure to allege a cover up against one entity does not affect the revival of claims against any other entity, including the perpetrator. These claims will be permitted to proceed if already pending in court as of January 1, 2026, or if not filed by that date, commenced between January 1, 2026, and December 31, 2027.

SB 53: Transparency in Frontier Artificial Intelligence Act

As DWT recently reported,SB 53, also known as the Transparency in Frontier Artificial Intelligence Act (TFAIA), imposes transparency and reporting requirements on "frontier developers." SB 53 adds whistleblower protections, including prohibiting frontier developers from making, adopting, enforcing, or entering into a rule, regulation, policy, or contract that prevents a covered employee "from disclosing, or retaliates against a covered employee for disclosing, information to the Attorney General, a federal authority, a person with authority over the covered employee, or another covered employee who has authority to investigate, discover, or correct the reported issue, if the covered employee has reasonable cause to believe that the information discloses that the frontier developer's activities pose a specific and substantial danger to the public health or safety resulting from a catastrophic risk or that the frontier developer has violated the TFAIA." It also requires that a large frontier developer establish a "reasonable internal process" through which a covered employee may anonymously disclose information to the developer.

SB 303: Bias Mitigation Training Does Not Constitute Discrimination

To "[e]ncourage employers to conduct bias mitigation trainings," SB 303 affirms that "an employee's assessment, testing, admission, or acknowledgment of their own personal bias that was made in good faith and solicited or required as part of a bias mitigation training does not, by itself, constitute unlawful discrimination." Bias mitigation training is defined as "bias mitigation or bias elimination training, education, and activities provided by an employer for the purpose of educating employees on understanding, recognizing, or acknowledging the influence of conscious and unconscious thought processes and their associated impacts. Bias mitigation training shall include implementing specific strategies to mitigate the impact of employees' personal biases."

SB 477: FEHA Enforcement Procedures

SB 477 explains that existing law authorizes a complaint to be filed by an aggrieved person or the department on behalf and as representative of a group or class if the alleged unlawful practice adversely affects, in a similar manner, a group or class of persons of which the aggrieved person is a member. SB 477 adds a definition of "group or class complaint" to FEHA as "any complaint alleging a pattern or practice." Also, SB 477 discusses how the time for a complainant to file a civil action under FEHA is tolled until one year after the CRD issues written notice that it has closed its investigation. SB 477 provides that this deadline is also tolled for the period of time specified in a written agreement between the CRD and the complainant, the time for which the CRD's investigation is extended due to the pendency of a petition to compel compliance, and during a timely appeal within the CRD of its closure of the complaint.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.