Wage and Hour Laws

AB 692 – Employment Contract Repayment Prohibition

AB 692 will apply to employment contracts entered into on or after January 1, 2026, and will apply to all employers in California. Under the new law, it will be unlawful to include terms in employment contracts that require workers to pay employers penalties or fees, or repay costs incurred by the employer on the employee’s behalf, if the employment relationship ends.  Some contracts for repayment are still permitted under the law such as tuition repayment, bonuses, apprenticeship programs, or contracts related to the lease, financing, or purchase of residential property.  Many of the exceptions are narrow and must be read carefully.  Not complying with AB 692 can expose employers to liability, including minimum damages of $5,000 per affected worker, injunctive relief, and attorneys’ fees and costs associated with the worker having to bring a lawsuit.  Employers should audit all existing employment, incentive, and training agreement templates to identify and remove any provisions that may violate AB 692.

SB 294 – Workplace “Know Your Rights” Act

As of February 1, 2026, under Senate Bill (SB) 294 employers must provide a written notice outlining employee rights related to:

  • Workers’ compensation benefits
  • Immigration agency inspections
  • Protection from unfair immigration practices
  • Constitutional rights when interacting with law enforcement

The Labor Commissioner will provide on its website a template notice by January 1, 2026.
Employers must distribute it annually by February 1, 2026 and to a new employee upon hire.  The notice must be provided in a manner the employer normally uses to communicate employment-related information.  The bill also requires (if the employee requests) that the employer notify the employee’s designated emergency contact if the employee is arrested or detained on their worksite.  Employers must notify the contact if the arrest/detention occurs on-site or off-site during work hours when the employer has actual knowledge of the arrest or detention of the employee.  The bill carries an anti-retaliation provision and will be enforced by the Labor Commissioner with a penalty of $500 per employee per violation, except that the penalty for a violation of the emergency contact provision will be an amount up to $500 per employee for each day the violation occurs, up to a maximum of $10,00 per employee.

Anti-Discrimination and Harassment Laws

SB 642 Revisions to Equal Pay Act

Effective January 1, 2026, Senate Bill (SB) 642 amends the definition of “pay scale” to “a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.”  This bill also prohibits an employer from paying employees at wage rates less than the rates paid to employees of another sex instead of the opposite sex. Wages now include all forms of compensation (salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, and benefits, etc.) The bill expands to three-years (from two years) the statute of limitations for pay equity claims and allows recovery of lost wages for the entire time during which the violation occurred, up to six years. Employer Tip: Retain wage and pay data for 3 years for postings and 6 years for defense.

SB 464  Pay Data Reporting

With the passage of Senate Bill 464, California has expanded its existing requirements for employers regarding pay data reporting.  Demographic data collected for pay reporting must be stored separately from personnel records.

Beginning January 1, 2027, the bill increases the number of job categories on which the employer must report to 23 job categories (up from 10).

Penalties: Up to $100 per employee (first violation); $200 per employee (subsequent).
Courts must impose penalties upon CRD request.

Tip:  “Separate” storage is undefined—may be physical or logical.  At this time, there is no publicly posted CRD regulation, guidance document or FAQ’s that define what constitutes “separate.”  It’s unclear whether CRD expects employers to maintain physically distinct files or merely ensure that the demographic data is logically or administratively separated (i.e., restricted access, flagged records, etc.) We will continue to monitor for further guidance and updates from the  CRD to see if it defines or clarifies “separate” more clearly.   In the meantime, employers should adopt most conservative and “best practice” approach until guidance is clarified. Ensure access to demographic/pay-data file is limited (i.e., to those responsible for reporting) and that it’s not routinely accessed by managers reviewing performance or other personnel matters.

SB 617 Cal WARN

Effective January 1, 2026, under Senate Bill (SB) 617 employers must include in WARN notices:

  • Whether rapid-response services will be coordinated and by whom
  • Local workforce development board contact information
  • Standardized job placement/retraining language
  • CalFresh(statewide food assistance program) information
  • Employer contact details 

Note: No change to 60-day notice period, coverage thresholds, or definitions.

Noncompliance may result in up to 60 days’ back pay and benefits per affected employee.

Tip: Employers should update WARN templates and processes by end of 2025.

Records Requirement Law

SB 513 – Personnel Files to Include Training or Education Records

Effective January 1, 2026, under Senate Bill (SB) 513, personnel files now include training and education records (not just records employer maintains relating to the employee’s performance or to any grievance concerning the employee).
Each training record must contain:

  • Employee name
  • Training provider name
  • Duration/date of the training
  • Core competencies of the training, including skills in equipment or software
  • Resulting certificates or qualifications.

Leave Laws

SB 590 – Paid Family Leave – Designated Person

Effective down the road, on July 1, 2028, Senate Bill (SB) 590 expands benefits under paid family leave to cover care for a “designated person,” meaning any individual who is a blood relative or whose association with the employee is the equivalent of a family relationship. 

Employees must 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.  This definition of “designated person” tracks the CFRA.