During its 2025 legislative session, California enacted multiple employment laws that take effect January 1, 2026 unless otherwise noted. Below is a concise summary and action plan for employers.

California's new measures expand obligations on pay transparency and reporting, personnel file access, worker notices, limits on stay or pay arrangements, and more. This update highlights the most significant changes taking effect in the new year.

Minimum Wage Increase

Effective January 1, 2026, the statewide minimum wage increases by 40 cents to $16.90 per hour for all employers. The minimum salary for the white collar exemptions also increases to $70,304 per year because it must be at least two times the state minimum wage. Local minimum wages may be higher.

Changes to Bonus and Debt Repayment Obligations

AB 692 restricts training repayment agreement provisions and similar stay or pay terms in contracts entered on or after January 1, 2026. Covered prohibitions include requiring repayment of a debt if employment ends and imposing penalties or fees tied to termination. Limited exceptions apply for transferable credential tuition agreements that meet specified conditions and for discretionary or unearned monetary payments such as sign on or relocation bonuses that meet detailed safeguards including separate agreements, attorney consultation periods, and prorated repayment without interest within a retention term not to exceed two years.

Violations can result in actual damages or $5,000 per worker whichever is greater plus injunctive relief and attorneys' fees and costs. Workers may bring actions on behalf of similarly situated workers.

Expanded Uses of Paid Sick Leave

Under AB 406, effective January 1, 2026 employees may use paid sick leave if they or a covered family member are victims of certain crimes and need to attend covered judicial proceedings. Effective October 1, 2025 employees may also use paid sick leave for jury duty and to appear in court pursuant to a subpoena or court order as a witness.

Cal WARN Notice Expansion

SB 617 expands the Cal WARN content required in layoff and closure notices to include coordination of services information, contact details for the local workforce development board, a specified rapid response description, CalFresh information, and an employer contact email and telephone number. If an employer coordinates services it must arrange them within 30 days of the notice. Federal WARN notices do not require these items. A Cal WARN notice is not required if a mass layoff, relocation, or termination is necessitated by a physical calamity or act of war.

Pay Transparency and Equal Pay Expansion

SB 642 revises the pay transparency law to define pay scale as a good faith estimate of the wage range the employer reasonably expects to pay for a position upon hire. SB 642 broadens wages under the Equal Pay Act to include all forms of pay such as salary overtime bonuses stock and benefits and updates language to prohibit paying less than employees of another sex for substantially similar work. The statute of limitations for equal pay claims is expanded to three years from the last date the cause of action occurs with relief available for the period the violation exists up to six years and the law identifies when a cause of action occurs including each time compensation is paid.

Personnel Records Requirements

SB 513 expands personnel records that employees may inspect and receive to include education and training records with specified details including employee name provider name duration and date competencies and any resulting certification or qualification.

Workplace Know Your Rights Act

SB 294 requires employers to provide a new worker rights notice upon hire and annually beginning February 1, 2026. The Labor Commissioner must post a template by January 1, 2026. The notice must cover workers' compensation rights immigration inspection notice rights protections against unfair immigration practices the right to organize and constitutional rights when interacting with law enforcement plus new legal developments and enforcement agency information.

Employers must deliver the notice to new hires and to current employees by February 1, 2026 and annually to any authorized representative using communication methods reasonably expected to be received within one business day and in the appropriate language where available. A video on rights and obligations is due by July 1, 2026 and employers must retain compliance records for three years.

Employers must also provide opportunities for employees to designate an emergency contact by March 30, 2026 or at hire thereafter and to indicate whether contacts should be notified upon an arrest or detention at work. Ongoing updates must be permitted.

The law prohibits retaliation and authorizes enforcement with penalties including up to $500 per employee for most violations and up to $500 per employee per day for emergency contact violations capped at $10,000 per employee.

NLRB “Trigger” Law

AB 288 expands PERB jurisdiction to protect workers' rights under federal labor law when NLRA coverage is lost or the NLRB cedes jurisdiction. PERB may decide unfair labor practice cases and order relief including civil penalties and process representation matters. The NLRB has challenged AB 288 in federal court asserting NLRA preemption.

Enforcement of Wage Judgments

SB 261 increases civil penalties where employers fail to pay DLSE wage judgments within 180 days up to three times the unpaid amount plus post judgment interest absent clear and convincing evidence of good cause and extends joint and several liability for penalties to successors. Penalties are split evenly between the employee and the DLSE and prevailing employees may recover reasonable attorneys' fees and costs in actions enforcing wage judgments.

Other Key Updates

• Bias mitigation training protections clarify that in good faith admissions during such trainings do not alone constitute unlawful discrimination and reiterate separate harassment training requirements for employers with five or more employees.
• Vehicle use and reimbursements clarify that owning a vehicle used for work does not determine independent contractor status and confirm reimbursement obligations for necessary expenses.
• TNC drivers may organize under the Transportation Network Company Drivers Labor Relations Act without employee classification and PERB will administer processes and thresholds for representation.
• The Transparency in Frontier Artificial Intelligence Act imposes transparency and reporting on frontier AI developers and protects covered employees from retaliation for raising catastrophic risk or compliance concerns with required rights notices.
• FEHA amendments define group or class complaints and expand tolling for the one year civil action deadline in specified circumstances.
• Pay data reporting expands as of January 1, 2027 to 23 SOC job categories with mandatory penalties for non filing and requires demographic data to be stored separately from personnel records.
• AB 250 extends statutes of limitations for adult survivor sexual assault claims during a revival window from January 1, 2026 through December 31, 2027 with entity liability where there is a defined cover up.
• Paid family leave will extend to a designated person effective July 1, 2028 with sworn relationship statements.

Immediate Action Items for Employers

• Update wage rates and exempt salary thresholds and confirm local minimum wage compliance by January 1, 2026.
• Audit and revise offer letters retention or sign on bonus agreements tuition assistance arrangements relocation programs and any training repayment terms to comply with AB 692 including separate agreements attorney consultation periods prorated non interest repayment and retention terms not exceeding two years.
• Update paid sick leave policies to add crime victim proceedings effective January 1, 2026 and jury duty and witness subpoena appearances effective October 1, 2025.
• Revise Cal WARN templates to include new content and establish processes to arrange coordinated services within 30 days when elected.
• Align job postings with the revised pay scale definition and review compensation practices for compliance with equal pay expansions and broadened wage definitions and limitations periods.
• Expand personnel records systems to capture required training and education fields and ensure timely access upon request.
• Prepare to distribute the Workplace Know Your Rights notice to all current employees by February 1, 2026 at hire thereafter and annually to any authorized representative using approved delivery methods and languages. Create tracking to retain proof of delivery for three years and plan to circulate the Labor Commissioner video when released.
• Build processes to collect maintain and update emergency contact designations by March 30, 2026 and to provide arrest or detention notifications consistent with employee direction.
• Train HR and managers on Cal WARN changes stay or pay restrictions expanded sick leave equal pay rules personnel file access emergency contact protocols and anti retaliation protections.
• For multi state and union active worksites monitor AB 288 developments and assess labor relations strategies if NLRB jurisdictional shifts occur.
• For employers with 100 or more employees plan for 2027 pay data reporting changes including mapping roles to 23 SOC categories building separate demographic data storage and budgeting for mandatory penalties if non compliant.

California's new employment laws reach across AI pay transparency leave wage enforcement personnel files unionization rights and more. Employers should begin implementing the above steps to ensure timely compliance.

Disclaimer: This post is for informational purposes only and does not constitute legal advice or create an attorney-client relationship.