In 2025, Governor Gavin Newsom signed more than a dozen bills that significantly expand and reform employer obligations in California. These new laws create additional workplace rights notices, broaden leave and rehiring protections, expand personnel file and pay reporting requirements, and alter wage and hour, independent contractor, website, and labor relations rules—most taking effect in 2026, with some provisions extending into 2027 and beyond.
Below is a high-level summary of the key 2026 developments affecting California employers. For a more comprehensive review of these new statutes and recent court decisions taking effect in the new year, we encourage you to register for our complimentary December 10 webinar, “New California Employment Laws & Developments for 2026,” presented by CDF partners Todd Wulffson and Alessandra Whipple. Register HERE to reserve your spot.
Employee Contracts
SB 294 – Workplace Know Your Rights Act Notices
Starting on February 1, 2026, employers must provide employees with an annual written Workplace Know Your Rights Act Notice. A template notice will be released by the Labor Commissioner by January 1, 2026 with educational videos to be published by July 1, 2026.
Required Notice Content
The notice must clearly explain workers’ rights related to:
- Workers’ compensation benefits;
- A summary of employee’s rights to immigration inspection notices and protections;
- Union organizing and concerted activity; and
- Constitutional rights during interactions with law enforcement at the workplace.
Language Requirements: Employers must provide the notice in the language used for work-related communications and that the employee understands, per the Labor Commissioner’s website.
Emergency Contact Designation: By March 30, 2026, employers must allow employees to designate an emergency contact or collect this information from new hires going forward.
Penalties: The new law authorizes enforcement by the Labor Commissioner or a public prosecutor. Violations may incur penalties for up to $500 per employee, or up to $10,000 per employee for ongoing emergency contact violations.
To find out more about SB 294, click HERE.
SB 617 – California’s 2026 WARN Act Updated Notice Requirements for Mass Layoffs, Relocations, or Terminations
Effective January 1, 2026, employers conducting mass layoffs, relocations, and terminations will be required to provide additional information in their written notice to employees under the California Worker Adjustment and Retraining Notification Act (“Cal-WARN”). Employers will be required to include whether they plan to coordinate services through the local workforce development board or another entity, and information regarding the statewide food assistance program known as CalFresh.
Existing Law
Prior to conducting a mass layoff, relocation, or termination, existing law requires employers to provide written notice 60 days before the change to affected employees and to the Employment Development Department, the local workforce development board, and the chief elected official of each city and county government where the termination, relocation, or mass layoff occurs.
New SB 617 Notice Requirements for Mass Layoffs, Relocations, or Terminations
Governor Newsom amended employers’ written notice requirements pertaining to Cal-WARN (Labor Code sections 1401). Effective January 1, 2026, employers are also required to include the following information in the written notice of mass layoff, relocation, or termination:
- An employer statement regarding plans to coordinate services through the local workforce development board, a different entity, or no plans to coordinate services with any entity.
- A functioning email and telephone number of the local workforce development board with the following description: “Local Workforce Development Boards and their partners help laid off workers find new jobs. Visit an America’s Job Center of California location near you. You can get help with your resume, practice interviewing, search for jobs, and more. You can also learn about training programs to help start a new career.”
- A description of CalFresh (the statewide food assistance program), the CalFresh benefits helpline, and a link to the CalFresh internet website.
- A functioning email and telephone number of the employer for contact.
If the employer chooses to coordinate services with the local workforce development board or another entity, the employer must arrange services within 30 days from the date of the written notice.
To find out more about SB 617, click HERE.
SB 648 – Tips (i.e., Gratuities) on Tips
On July 30, 2025 Governor Newsom signed SB 648 into law amending Labor Code section 351 to give the Labor Commissioner power to investigate employee complaints about tips, and issue citations or file a civil action against an employer for taken, withheld, or late gratuities. While it has been against the law to take employee tips, or run an unfair or unreasonable tip pool, employees can now file complaints with the Labor Commissioner and have another option for pursuing withheld or unpaid tips.
Here is what employers need to know to avoid and defend against any tip-related complaints.
Payment of Tips: Labor Code section 351 commands that gratuities paid, given to, or left for an employee or group of employees is their property. Employers are prohibited from collecting, taking, or receiving any portion of a tip, or using tips as a credit against an employee’s wage. Tips made by credit card must be paid to employees no later than the next regular payday.
Tip Pooling: Pooling tips and distributing them to a group of employees is permitted in California. The key to tip pooling is making sure that the pool participants are reasonably defined and that the formula for distributing the pool is fair and reasonable. With respect to eligibility, managers, supervisors, or other “agents” of the company cannot participate in the pool. Generally, only employees that are in the chain of service should be included in the pool. When it comes to distributing the tip pool, it should be paid out in a reasonable manner that reflects employee service contributions (e.g., based on hours worked or percentage of sales).
An employer is subject to a civil penalty of one hundred dollars ($100) for an initial violation and a penalty of two hundred fifty dollars ($250) for subsequent violations for each employee whose tips were taken in addition to restitution of the gratuity.
To find out more about SB 648, click HERE.
AB 692 – California Doubles Down on Employee Mobility
Effective January 1, 2026, AB 692 prohibits many “stay-or-pay” agreements as part of the state’s continued efforts to protect employee mobility. This new law bars common arrangements that require an employee to reimburse employers for costs like relocation expenses and work-related training programs if the employment ends before an agreed upon time, with exceptions for certain tuition and upfront discretionary bonus repayments.
What Does AB 692 Prohibit?
All employers are prohibited from requiring a worker to sign, as a condition of employment, a contractual provision that does any of the following:
- Requires debt (e.g., employment-related costs, education-related costs, or consumer financial product or services) repayment if employment ends;
- Allows debt collection or end forbearance on a debt if employment ends; or
- Imposes any penalty, fee, or cost if employment ends.
Tuition Repayment and Upfront Discretionary Bonus Exceptions
Contracts related to the repayment of tuition for a transferable credential and upfront discretionary payments not tied to job performance (e.g., sign-on bonus, relocation assistance) are permitted in certain circumstances.
Penalties
The Bill establishes a private right of action for monetary damages equal to either the worker’s actual losses or $5,000—whichever amount is greater, injunctive relief, and reasonable attorneys’ fees and legal costs for the employee.
To find out more about AB 692, click HERE.
AB 858 – Extension of Rehiring Protections for Displaced Service Workers
AB 858 extends Labor Code section 2810.8 rehiring protections for airport hospitality and service providers, building service contractors, event centers, hotels with 50 or more rooms, and private clubs through January 1, 2027.
Subject employers must offer their laid-off employees’ information about job positions that become available and offer positions to those laid-off employees on a seniority preference system before hiring new workers, in accordance with specified timelines and procedures.
“Laid-off employee” refers to an employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was due to a reason related to the COVID-19 pandemic, including a public health directive or reduction in force, among other reasons.
Within five business days of establishing a position, an employer shall offer qualified laid-off employees in writing, by hand or mail delivery, and by email and text message to the extent the employer possesses such information, all job positions that become available for which the laid-off employees are qualified. A laid-off employee shall be given at least five business days, from the date of receipt, in which to accept or decline the offer.
Personnel Records
SB 513 – Expands Personnel File Requests to Include Training and Education Records
SB 513 amends Labor Code section 1198.5 to expand the personnel records that employers must make available to employees for inspection to include education and training records.
Existing Law
Under current law, California employers must allow current and former employees to inspect and receive copies of personnel records relating to the employee’s performance or any grievance concerning the employee. Employers generally must respond to written requests within 30 days (or up to 35 days by mutual written agreement) and must retain personnel records for at least three years after separation. Violations can result in a $750 penalty, injunctive relief, and attorney’s fees, and are classified as an infraction under the Labor Code.
New Requirements Under SB 513
SB 513 clarifies that “personnel records relating to the employee’s performance” now also include education and training records and must be produced pursuant to an employee’s request under section 1198.5. Employers that maintain such records must ensure they contain the following information:
- Employee’s name
- Name of trainer
- Date and duration of training
- Core competencies addressed (e.g., skills in equipment or software)
- Resulting certification or qualification
To find out more about SB 513, click HERE.
SB 642 – Amendments to California’s Equal Pay Laws
Effective January 1, 2026, the Pay Equity Enforcement Act (SB 642), significantly amends California’s Equal Pay and Pay Transparency laws by broadening key definitions, extending the statute of limitations to three years with recovery for the entire period a violation exists, not to exceed six years, and specifying categories of unlawful practices under the act.
New “Pay Scale” Definition Under California’s Pay Transparency Law
California’s Pay Transparency Law, codified under Labor Code section 432.3, requires employers to provide employees with “pay scale” information, and requires employers with 15 or more employees to affirmatively include pay scale information in job postings.
Previously, “pay scale’ was defined to include the salary or wage range that the employer expected to pay “for the position” generally. Now, the amended definition requires employers to provide a “good faith estimate” of the salary or wage range “upon hire.” This means employers must now disclose what they reasonably expect to pay a new hire on day one, rather than offering an estimate for the position as a whole.
Expanded Definition of “Sex” and “Wages”
California’s Equal Pay Law, codified at Labor Code section 1197.5, prohibits employers from paying employees less wages for performing substantially similar work based on sex. Section 1197.5 previously prohibited employers from paying an employee less than an employee of the “opposite sex.” SB 642 amends the law to prohibit a pay disparity between an employee of “another sex,” now encompassing non-binary genders. This means employees who have different gender identities or gender expressions, whether or not stereotypically associated with the person's assigned sex at birth, must be compensated equally as other genders when performing substantially similar work.
SB 642 also significantly broadens the definition of “wages” to include all forms of pay, including, inter alia, bonuses, stock, stock options, cleaning or gasoline allowances, hotel accommodations, and reimbursement for travel expenses. Employers must now ensure that any form of compensation, not just a salary or hourly rate, is paid equally across genders unless there is a business necessity or other meritorious reason for the disparity. SB 642 makes clear that this expansive definition of wages only applies to section 1197.5 and does not apply to any other section of the Labor Code.
Key Takeaways
Covered employers should ensure that all job postings posted on or after January 1, 2026 contain the required pay scale information. Employers should also revise their pay policies and practices to prohibit pay inequity between an employee of another sex, and to ensure that all forms of wages are paid equally across sexes, not just salaries and hourly rates.
To find out more about SB 642, click HERE.
SB 464 – Employer Pay Data Reporting Expansions
Separate Employer Pay Data Collection & Broadened Demographic Requirements for 2026-27
A private employer with 100 or more employees on their payroll, or an employer utilizing 100 or more workers hired through labor contractors, must submit pay data reporting to the Civil Rights Department on an annual basis.
“Existing law requires a private employer that has 100 or more employees to submit an annual pay data report to the Civil Rights Department that includes the number of employees by race, ethnicity, and sex in 10 specified [EEO-1] 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 during the ‘Reporting Year,’ as specified.”
Effective January 1, 2026, employers and labor contractors must store the demographic pay data separately from employee personnel records. Further, starting with the 2026 reporting due May 2027, an employer must report employee demographic information in 23 Standard Occupational Classifications categories (increased from ten current EEO-1 categories by race, ethnicity, and sex).
Employers who fail to file a pay data report when requested by the CRD and labor contractors who fail to provide pay data to employers face stricter civil penalties (up to $100 per employee for first failure to file, and up to $200 per employee for each subsequent failure).
This bill amends, repeals, and adds Section 12999 of the Government Code.
Leaves of Absence
SB 590 – Paid Family Leave for Designated Persons
Beginning July 1, 2028, SB 590 employees who take time off work to care for a seriously ill “designated person” will be eligible to receive state Paid Family Leave (PFL) benefits.
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” as aligned with the California Family Rights Act “designated person” definition, which includes any individual related by blood or whose association with the employee is the equivalent of a family relationship.
An employee who files for PFL benefits to care for a designated person must identify the designated person the first time they file a claim for family temporary disability insurance benefits and is required to attest under penalty of perjury how they are associated with that individual by blood or the equivalent of a family relationship.
This bill amends, repeals, and adds Sections 3301, 3302, and 3303 of the Unemployment Insurance Code.
AB 406 – Workplace Protections for Victims of Violence
Effective January 1, 2026, AB 406 expands crime victim accommodation and time off protections, prohibiting employers from discharging or in any manner discriminating or retaliating against an employee who is a victim or a family member of a victim for taking time off in order to attend judicial proceedings related to that crime. “Victim” includes being subjected to one of 14 different crimes enumerated by Government Code section 12945.8(j)(8)(c).
Wage and Hour
AB 751 – Rest Periods for Safety-Sensitive Employees at Petroleum Facilities
AB 751 amends Labor Code section 226.75 and indefinitely extends rest period exemptions for specified employees who hold a safety-sensitive positions at petroleum facilities and refineries, as defined, to the extent that the employee is required to carry and monitor a communication device and to respond to emergencies or is required to remain on employer premises to monitor the premises and respond to emergencies. If circumstances do not allow for the employee to take a rest period, an employer is required to pay the employee one hour of pay at the employee’s regular rate of pay for the rest period that was not provided.
AB 1514 – ABC Independent Contractor Test Exemptions for Manicurists and Commercial Fishers
AB 1514 extends the exemptions for licensed manicurists and commercial fishers working on an American vessel, from the ABC employee versus independent contractor worker classification test (and the holding in Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (2018)) for purposes of worker classification until January 1, 2029, and January 1, 2031, respectively. Workers who qualify for the exemption will instead be evaluated under the more flexible employer friendly G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3d 341 (1989) standard for independent contractors.
Website Requirements
AB 566 – Web Browsers Must Allow Users to Opt-Out
Starting January 1, 2027 under the new California Opt Me Out Act law, businesses that operate websites in California must include web browser functionality for consumers that enables the browser to automatically send an opt-out preference signal to website operators (an opt-out preference signal is defined as a signal that communicates the consumer’s choice to opt out of the sale and sharing of the consumer’s personal information).
The new law specifies the functionality must be easy for a reasonable person to locate and configure. California is the first state to adopt this type of law, as part of its efforts to increase the control consumers have over their personal data.
Website operators should ensure that their websites are set up to accommodate opt-out preference signals, including the automatic signals that may be sent out by browsers in the near future.
This new law allows the California Privacy Protection Agency to adopt regulations related to these requirements. Now is a good time for website operators to review their policies and practices to get in compliance and avoid future legal pitfalls.
To find out more about AB 566, click HERE.
Labor
AB 288: Expansion of PERB’s Authority
Effective January 1, 2026, AB 288 expands the authority of the California Public Employment Relations Board (PERB), which currently oversees collective bargaining in the public sector, and allows PERB to hear certain unfair labor practice (ULP) cases involving private-sector workers and take other actions traditionally under the exclusive jurisdiction of the National Labor Relations Board (NLRB).
What AB 288 Does
AB 288 empowers private-sector unions and employees to take their disputes to PERB if the NLRB fails to act within statutory timeframes. Specifically, workers could petition PERB to:
- Decide unfair labor practice cases that the NLRB has not resolved within six months;
- Certify a union as the exclusive bargaining representative;
- Order employers to bargain, reinstate terminated workers, or participate in binding mediation; and
- Impose civil penalties, with funds earmarked for PERB’s enforcement efforts.
In short, the bill attempts to create a parallel state enforcement process for rights already guaranteed under the National Labor Relations Act (NLRA).
Why This Matters for California Employers
California private employers could face:
- Duplicate forums: Employers may have to defend against ULP charges before both the NLRB and PERB.
- Expanded remedies: PERB may impose civil penalties, a sanction not available under the NLRA.
- Increased leverage for unions: Binding mediation orders and expedited remedies could tilt the balance of bargaining power.
- Uncertainty in compliance: Employers will be forced to navigate overlapping—and potentially conflicting—federal and state labor law obligations.
Review labor relations policies: Employers should ensure they are compliant with federal law now to minimize potential exposure before both the NLRB, and be ready to make changes to comply with PERB provisions pursuant to AB 288 (assuming federal preemption challenges are not successful).
Bottom Line: AB 288 is a bold but a legally vulnerable attempt by California to expand state control over labor relations in the private sector. Employers should stay tuned to CDF’s Labor Blog for updates on this topic.
To find out more about AB 288, click HERE.
AB 1340 -- the Transportation Network Company Drivers Labor Relations Act
Starting January 1, 2026, the Transportation Network Company Drivers Labor Relations Act grants certain gig drivers in California the right to unionize, bargain collectively and engage in concerted activities, without being classified as employees. PERB is tasked to enforce the Act’s provisions, including resolving labor disputes, adjudicating unfair practice charges, and overseeing elections.
Who is Covered by AB 1340?
A TNC is a company operating in California that uses an app to connect drivers using personal vehicles with passengers. Drivers classified as employees under federal law or National Labor Relations Board (NLRB) rulings are excluded from AB 1340, under the theory that they already have unionization rights under federal law. The law only applies to non-employee independent drivers.
What Does AB 1340 Mandate?
The Act reflects California’s efforts to balance worker protections with the unique challenges of app-platform-based work, particularly after the contentious passage of Prop 22, which classified TNC drivers as independent contractors, as a matter of law.
Starting January 1, 2026, covered TNCs must submit to PERB every quarter a list of drivers who completed at least 20 rides in the past six months. The list must include each driver’s name, license number, known contact information, date joined, and ride count. PERB will take the data submitted by the covered TNC companies and calculate the median ride count and identify all “active” drivers—those meeting or exceeding the 20-ride threshold over the prior six-month period. The active drivers will have the right to unionize.
The unionization process is materially different from that under the NLRA. A TNC driver organization/union can begin the union organization process by making a showing to PERB that it has a mere 10% support among active drivers. PERB then has 30 days to verify that the 10% threshold is met.
If the threshold is met, TNCs must notify active drivers within 30 days after determining that the 10% threshold was met, and that the union is seeking to represent them. Only upon certification that the 10% threshold interest in unionization is met can PERB then provide the union with the list of eligible TNC drivers. The driver organization/union then has to show that it has 30% support to trigger an election. The election will be conducted using remote voting.
However, if the driver organization/union can show that it has more than 50% support, there shall be no election and the driver organization/union shall be automatically certified.
To find out more about AB 288, click HERE.
Other
SB 303 – Bias Mitigation Training
SB 303 amends the Fair Employment and Housing Act, stating 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.
This bill adds Section 12940.2 to the Government Code.
AB 250 – Extended SOL for Sexual Assault Claims
Starting January 1, 2026, there is a two-year 2026-27 eligibility period for revival of filing sexual assault claims that would otherwise be barred by the applicable statute of limitations. This bill increases exposure for private (not public) employers. To revive a sexual assault claim, there must be a showing that (1) one or more entities or persons are legally responsible for damages arising out of sexual assault by an alleged perpetrator against the plaintiff, and (2) an entity or entities, including their specified representatives, engaged in a cover up or attempted a cover up of a previous instance or allegations of sexual assault by an alleged perpetrator. A “cover up” is defined as a “concerted effort to hide evidence relating to a sexual assault that incentivizes individuals to remain silent.”
This bill amends Section 340.16 of the Code of Civil Procedure.
What Should California Employers Do Now?
Taken together, these new laws continue California’s trend toward increased regulation, greater transparency, and expanded worker protections. They also add layers of complexity to existing obligations, making it critical for employers to get ahead of the 2026 changes rather than waiting until effective dates arrive.
California employers should consider:
- Auditing policies and handbooks to address new notice, leave, bias training, and victim-protection requirements.
- Reviewing offer letters, reimbursement, and mobility-related agreements to ensure they do not run afoul of AB 692’s restrictions on “stay-or-pay” arrangements.
- Updating personnel and training record practices to capture the information now required under SB 513.
- Revising pay transparency and pay equity practices to align with SB 642’s expanded definitions of “pay scale,” “sex,” and “wages,” and preparing for broader pay data reporting under SB 464.
- Coordinating with IT, privacy, and marketing teams to ensure websites and online tools are ready for AB 566’s opt-out signal requirements.
- Consulting with labor counsel about the potential impact of AB 288 and AB 1340 on labor relations strategies and union activity.
CDF will continue to monitor implementation of these laws, as well as related regulations and court challenges, and provide timely updates for California employers.
