By: Karen Carrera, Esq. AWI-CH

1) State Minimum Wage & Exempt Salary Threshold
Effective: January 1, 2026

What it does: Increases the state minimum wage to $16.90/hour, which in turn lifts the exempt salary threshold (twice minimum wage) to $70,304/year for most executive, administrative and professional exemptions. Industry benchmarks also update: The computer software professional exemption rate rises to $58.85/hour (or $122,573.13/year) and the licensed physician/surgeon rate to $107.17/hour. Local ordinances with higher rates prevail in their jurisdictions.

Who is affected: All California employers and employees, especially those near exemption thresholds and in jurisdictions with higher local minimum wages.

Action: Reaudit exempt classifications, adjust payroll and update offer letters to ensure exempt salaries meet or exceed the new floor.

2) AB 692 — Ban on Most “Stay‑or‑Pay” (Repayment) Clauses
Effective: January 1, 2026

What it does: Generally, voids employment agreements that require workers to repay amounts (e.g., sign-on bonuses, relocation payments, training costs) upon separation, treating such provisions as unlawful restraints on trade. Creates a narrow safe harbor for discretionary, up‑front payments (e.g., sign‑on/retention bonuses) if strict conditions are met: separate agreement; five business days to consult an attorney; ≤two‑year retention term; interest‑free, prorated repayment; option to defer payment until the end of the retention term; and repayment triggered only by resignation or misconduct termination. Noncompliant terms are void; workers (or representatives) may seek actual damages or $5,000 per worker (greater of), plus attorneys’ fees and injunctive relief.

Who is affected: All employers using sign-on/retention/relocation incentives, tuition assistance or training repayment agreements.

Action: Separate bonus agreements from offer letters; insert attorney‑review language; cap retention to two years; ensure prorated, interest-free repayment and allow deferral; remove any repayment for no-fault separations.

3) SB 513 — Training & Education Records in Personnel Files
Effective: January 1, 2026

What it does: Expands Labor Code §1198.5 to treat education and training records (provider, date/duration, competencies, certifications) as personnel records subject to employee inspection/copying.

Who is affected: All employers maintaining training records (e.g., harassment prevention, skills, equipment/software training).

Action: Standardize training record fields; centralize retention; align inspection and production workflows to meet statutory timelines and avoid criminal exposure for noncompliance.

4) SB 294 — Workplace “Know Your Rights” Notice & Designated Emergency Contact (ICE/Law‑Enforcement Protections)
Effective: February 1, 2026 (annual notice to current employees and at hire); March 30, 2026 (designated contact option)

What it does: Creates the Workplace Know Your Rights Act, mandating an annual standalone notice that informs employees of:

  • Workers’ compensation rights;
  • Notice procedures for immigration agency inspections;
  • Protection from unfair immigration‑related practices;
  • Right to organize/join a union and engage in concerted activity;
  • Constitutional rights at work when interacting with law enforcement (e.g., protections against unreasonable searches and self-incrimination).

The Labor Commissioner must publish a template notice by January 1, 2026; employers must deliver it in the employee’s primary language of communication and retain compliance records for three years. Employers must also, by March 30, 2026, offer employees the ability to designate an emergency contact and, if requested, notify that contact when the employer has actual knowledge that the employee is arrested or detained at work or while performing job duties (on‑ or off-site). Penalties include up to $500 per employee per day and up to $10,000 per employee for violations of the emergency‑contact provisions; retaliation is prohibited.

How this protects employees targeted by ICE: The annual notice educates workers on their rights during immigration inspections and prohibits unfair immigration-related practices, providing clear, accessible guidance and points of contact. The designated contact requirement ensures that family or trusted contacts are promptly informed if an employee is detained, helping workers access counsel and support quickly.

Who is affected: All California employers, with special relevance for workplaces employing immigrant communities.

Action: Add the notice to the onboarding and annual compliance calendars; prepare multilingual distribution; create a process to capture designated contacts and establish ICE/law enforcement response protocols, including documentation and timely notification.

5) SB 642 — Pay Transparency & Equal Pay Act Enhancements
Effective: January 1, 2026

What it does:

  • Job postings (15+ employees): “Pay scale” must be a good-faith estimate of the range reasonably expected upon hire.
  • Equal Pay Act (§1197.5): Clarifies that “wages” and “wage rate” include all compensation and benefits (salary, overtime, bonuses, stock/options, profit‑sharing, vacation/holiday pay, housing allowances) and replaces “opposite sex” with “another sex,” expressly covering nonbinary workers.
  • Litigation windows: Extends limitations period to three years, with relief for up to six years of violations; specifies when a cause of action accrues (adoption of decision/practice, subjection to it, or payment affected by it).

Who is affected: Employers with job postings and any employer assessing pay equity across substantially similar work.

Action: Update posting templates; audit all compensation and benefits forms for equity; align documentation for potential extended recovery periods.

6) SB 617 — WARN Notice Add‑Ons (Support Services & CalFresh Information)
Effective: January 1, 2026

What it does: Requires WARN notices to disclose whether the employer will coordinate support services (e.g., rapid response) through the local workforce development board; include contact information and a description of services; and provide CalFresh details (hotline, website link), plus a working employer email and phone number. Coordination, if chosen, must begin within 30 days of the notice.

Who is affected: Employers issuing WARN notices (mass layoff/relocation/termination).

Action: Update templates and internal timelines; liaise with local workforce boards.

7) SB 477 — FEHA Processing, Right‑to‑Sue & Tolling Rules
Effective: January 1, 2026

What it does: Defines “group or class complaint” as a pattern or practice allegation; sets right‑to‑sue issuance deadlines (one year for individual complaints, two years for group/class); and tolls civil filing in specific circumstances (e.g., timely appeal of closure, written agreement with CRD, extensions tied to petitions to compel cooperation).

Who is affected: Employers responding to CRD investigations and FEHA litigation.

Action: Adjust litigation strategy and retention schedules; track administrative timelines.

8) AB 406 — Expanded Leave Protections for Victims; Paid Leave Use for Jury/Witness
Effective: October 1, 2025 (jury/witness leave usage rule, applicable forward); in effect during 2026 for victim-related protections

What it does: Allows employees (and in some cases family members) who are victims of qualifying crimes to take job‑protected time off for relevant judicial proceedings and clarifies employees may use existing paid leave (vacation/PTO/sick) for jury duty or court appearances as witnesses. Retaliation is prohibited.

Who is affected: All employers; employees with court-related obligations.

Action: Update handbooks; train managers on approved reasons and paid‑leave use.

9) SB 464 — Pay Data Reporting: Separate Storage & Mandatory Penalties
Effective: January 1, 2026 (data segregation & penalties); January 1, 2027 (expanded job categories)

What it does: Requires demographic data used for California pay data reporting to be stored separately from personnel files; makes civil penalties mandatory upon CRD request for noncompliance; expands reporting to 23 job categories in 2027 (up from 10).

Who is affected: Employers with 100+ employees (or via labor contractors).

Action: Configure HRIS to segregate demographic data; strengthen reporting controls; plan for 2027 category expansion.

10) AB 858 — Extension of COVID‑19 Rehire Rights
Effective: Extended through January 1, 2027

What it does: Continues rehire preference rights for certain employees laid off due to COVID‑19, requiring notice of openings and preferential offers to qualified laid-off employees.

Who is affected: Covered industries (e.g., hospitality/service).

Action: Maintain tracking and communications; keep policies active through 2026–2027.

11) AB 578 — Food Delivery Worker Pay Transparency & Tips
Effective: January 1, 2026

What it does: Bars platforms from using tips to offset base pay, requires clear itemized pay breakdowns and mandates returning tips to customers on refunds without deducting from drivers.

Who is affected: Food/beverage delivery platforms and workers.

Action: Adjust pay models; update pay statements and customer refund flows.

12) AB 250 — Temporary Revival of Certain Sexual Assault Claims
Effective window: January 1, 2026 – December 31, 2027

What it does: Temporarily revives adult sexual assault claims otherwise time‑barred, including suits against entities alleged to have covered up prior assaults.

Who is affected: Employers/institutions potentially implicated by historical incidents.

Action: Review investigation protocols; ensure record retention; consult insurance and defense counsel.

13) SB 446 — Data Breach Notification Deadlines
Effective: January 1, 2026

What it does: Requires consumer notice of data breaches within 30 calendar days of discovery/notification and AG notice within 15 days if 500+ Californians are affected.

Who is affected: Any business handling consumer/employee personal data.

Action: Update incident response plans; rehearse timelines with vendors and counsel.

Immediate Compliance Checklist (2026)

  • Job Postings & Pay Equity (SB 642): Update postings with good‑faith pay ranges; audit all forms of compensation and benefits for equity across substantially similar work.
  • Annual Notice & ICE Protocols (SB 294): Add Know Your Rights notice to February 1 calendar; prepare multilingual distribution; implement designated contact and ICE/law‑enforcement response procedures; maintain three years of records.
  • Agreements (AB 692): Separate sign-on/retention agreements; include attorney‑review window; cap retention to ≤two years; ensure prorated, interest-free terms and deferral option; limit repayment to resignation/misconduct.
  • Training Records (SB 513): Incorporate training records into personnel files; verify completeness (provider, duration, competencies, certification).
  • WARN (SB 617): Revise notices to include support services and CalFresh information; initiate coordination within 30 days if elected.
  • Pay Data (SB 464): Segregate demographics from personnel files; prepare for mandatory penalties and 2027 category expansion.
  • Leaves (AB 406): Update policies for victim-related proceedings and permitted paid‑leave use for jury/witness duty; reinforce anti-retaliation.
  • Privacy (SB 446): Tighten breach notification timelines and templates; verify AG submission workflow.
  • Sector‑Specific: Hospitality/service employers continue COVID rehire compliance (AB 858); delivery platforms implement tip/pay transparency (AB 578).
  • SB 513: Training record schema and retention policy.