New California Employment Laws Taking Effect in 2026

California employers are once again facing significant employment law changes scheduled to take effect in 2026. Following the conclusion of the 2025 legislative session, Governor Gavin Newsom signed a broad package of labor and employment legislation that will materially affect workplace compliance, documentation, pay practices, and enforcement exposure across the state.

Many of these new California employment laws are set to become effective on January 1, 2026, while others will roll out through agency guidance and regulatory implementation. Employers who delay preparation risk increased liability, administrative penalties, and litigation exposure in an already aggressive enforcement environment.

This article provides an overview of the most important California employment law changes for 2026 and explains what employers should be doing now to prepare.

California’s 2025 legislative session continued the trend of expanding employee protections and increasing employer compliance obligations. Under California law, statutes enacted during a legislative session generally become operative on January 1 of the following year unless otherwise specified. As a result, many of the employment-related bills signed in October 2025 will take effect at the beginning of 2026.

However, employers should not assume that compliance can wait until the new year. Several laws authorize the Labor Commissioner or other agencies to issue templates, guidance, or regulations, and employers remain responsible for compliance even in the absence of finalized agency materials. Early planning is critical.

One of the most impactful changes for employers in 2026 involves expanded workplace notice and documentation requirements. SB 294, commonly referred to as the Workplace Know Your Rights Act, significantly increases the information employers must provide to employees on an annual basis. The law requires employers to distribute written notices summarizing core employee rights, including wage and hour protections, anti-discrimination laws, leave entitlements, and retaliation safeguards.

The statute also reinforces employee emergency contact designation rights by requiring employers to provide regular opportunities for employees to update this information. Although state agencies are expected to publish standardized templates, employers remain legally responsible for timely and accurate distribution. Failure to comply can result in civil penalties and may also be used as evidence in wage-hour claims, retaliation cases, and representative actions.

Another major development affecting California employers in 2026 is the restriction on so-called stay-or-pay agreements under AB 692. This law limits an employer’s ability to require employees to repay training costs or other expenses if they leave employment within a certain period. These provisions have been increasingly challenged as unlawful restraints on employee mobility.

Under the new law, repayment requirements tied to ordinary onboarding, orientation, or employer-required training are generally prohibited. Limited exceptions may apply to voluntary educational programs that provide genuine transferable value beyond the employer’s business. Employers relying on training repayment or reimbursement agreements should review them carefully, as noncompliant provisions may be unenforceable and could trigger claims under California’s strong public policy favoring employee mobility.

Pay transparency and pay equity compliance will also become more demanding in 2026. SB 642 expands California’s existing wage range disclosure requirements by tightening expectations for accuracy and consistency in job postings. Employers must ensure that posted wage ranges reflect good-faith estimates and are applied consistently across recruitment platforms, including third-party job boards and recruiters.

The law also strengthens California’s Equal Pay Act by expanding the definition of compensation and extending the time period for bringing certain pay equity claims. These changes increase risk for employers with informal pay practices, inconsistent documentation, or poorly defined job classifications. Employers should proactively review compensation structures and confirm that legitimate, non-discriminatory factors supporting pay differences are well documented.

California’s WARN Act compliance obligations are also expanding in 2026. Amendments enacted under SB 617 increase the amount of information employers must include in notices related to mass layoffs, relocations, and plant closures. Even employers familiar with WARN compliance should revisit their notice templates, as technical deficiencies in notice content can result in statutory penalties and back pay liability, regardless of whether notice was timely.

Personnel file access requirements are likewise expanding. SB 513 clarifies that employee access to personnel records includes training and education records maintained by the employer. This change elevates the importance of maintaining accurate, neutral, and complete training documentation. Training records are frequently requested in employment disputes, and poorly maintained records can significantly increase litigation risk.

Wage-hour compliance remains a central concern for California employers in 2026. The state minimum wage is scheduled to increase again, with corresponding increases to exempt salary thresholds that are tied to the minimum wage. Employers must carefully verify applicable state and local wage rates and ensure that exempt employees continue to satisfy both the salary and duties tests. Misclassification remains one of the most common and expensive sources of wage-hour liability in California.

Beyond these headline changes, the 2025 legislative session also produced laws strengthening wage judgment enforcement, expanding certain paid sick leave protections, and enhancing administrative enforcement authority. At the same time, the Governor vetoed several proposed measures that would have imposed even broader employer obligations, reflecting ongoing tension between worker protections and economic impact concerns.

For employers, compliance with California’s 2026 employment laws should be approached strategically rather than reactively. Handbooks, offer letters, training repayment agreements, job posting templates, WARN notice procedures, payroll systems, and personnel file practices should all be reviewed and updated as part of a coordinated compliance effort. Training for HR personnel and managers should occur before the laws take effect, not after enforcement begins.

California employment law continues to evolve rapidly, and 2026 will be no exception. Employers that prepare early, document carefully, and seek experienced legal guidance will be best positioned to manage risk and maintain compliance in an increasingly complex regulatory environment.

The information provided in this article and website is intended for general information purposes only and is not to be relied upon as legal advice. For a free phone consultation with Attorney Thomas Lee, please call (213) 251-5533.