As we embark on 2026, here’s what you need to know to tackle the new employment laws!
Employee Pay. As of January 1, 2026, California’s minimum wage is $16.90. This covers all California employers, regardless of size, except fast food restaurant employees, who must be paid a minimum of $20.00 per hour and certain health care workers who also have a higher minimum. Be mindful of local minimum wage ordinances, too, which are usually based on the employee’s work location.
The minimum salary that must be paid to exempt employees in California is a function of the minimum wage. Workers paid under the Administrative, Executive or Professional exemption must be paid at least two times the appropriate minimum wage based on a 40-hour workweek: $70,304. The Computer Software overtime exemption requires a minimum hourly rate of pay of $58.85, which means a minimum monthly salary of $10,214.44, or minimum annual salary of $122,573.13. Remember that the exempt salary rate is the minimum – there is no such thing as a part-time exempt salary rate (you cannot pay a pro-rata amount).
Paid Family Leave Expansion (SB 590). California’s Paid Family Leave is modified as of the first of the year to track California’s Paid Sick leave law and the California Family Rights Act and now includes an employee’s “designated person.” An employee who takes time off to care for a seriously ill “designated person” can receive the wage replacement benefits under California’s Paid Family Leave (PFL) program. A PFL “designated person” is a person who is related by blood or whose association with an individual is the equivalent of a family relationship. The rule requires that when an employee initially requests PFL benefits to care for a designated person, they must identify the designated person and under penalty of perjury attest that the person is related by blood or that the person is in an equivalent family relationship.
Workplace Know Your Rights Act (SB 294). Starting February 1, 2026, employers must provide a written notice to each current employee of certain employee rights. Employees hired after February 1 must also be provided the notice, and everyone is to get it annually. Don’t reinvent the wheel – use the notice that the Labor Commissioner developed – available here in English and here in Spanish.
The notice must clearly explain workers’ rights about:
- Workers’ compensation benefits, including disability pay and medical care for work-related injuries or illness, and contact information for the Division of Workers’ Compensation.
- A summary of employee’s rights to immigration inspection notices and protections against unfair immigration-related practices.
- Union organizing and concerted activity.
- Constitutional rights during interactions with law enforcement at the workplace, including Fourth and Fifth Amendment protections.
The notice must also include:
- New legal developments under laws enforced by the Labor and Workforce Development Agency, as identified by the Labor Commissioner.
- A list of enforcement agencies responsible for those rights.
The Labor Commissioner will post a video online by July 1, 2026, that will explain employers’ obligations and employees’ rights.
By March 20, 2026 (and upon hire thereafter), employers must give employees the opportunity to identify an emergency contact. Employers must notify an employee’s designated emergency contact if the employee is arrested or detained on the worksite. If the action occurs off-site, but during work hours or while the employee is performing work, the employer must notify the contact if the employer has actual knowledge of the arrest or detention.
Employers may not discriminate or retaliate against an employee for exercising or attempting to exercise their rights under the Act. The Labor Commissioner, a public prosecutor, or the employee (in a civil action) may enforce the Act, and the employee may obtain injunctive relief, penalties, punitive damages, and reasonable attorneys’ fees and costs. The penalties for violations of this new Act are per employee per violation, up to a maximum of $10,000 per employee.
Employee Mobility (AB 692). California generally does not allow employers to restrict employee mobility; noncompete provisions and agreements are unlawful. The legislature is now working to limit the use of “Stay or Pay” provisions that restrict movement. The new law makes it unlawful for contracts entered into after January 1, 2026, to require employees to pay their employer, training provider, or a debt collector for a debt if the employee’s employment or work relationship ends. It also bars contracts that impose any penalty, fee or costs on a worker if the employment ends. Debts, penalties, fees, or costs include employment-related or education related costs, replacement hiring fees, retraining fees, reimbursement for immigration or visa-related costs, and other fees. Enforcement is by a civil action by the employee (and can include others similarly situated).
The new law allows some repayment obligations to continue: some signing bonuses; government loan assistance or repayment programs, tuition assistance, enrollment in apprenticeship programs, and contracts related to the lease, finance, or purchase or residential real estate.
Preservation of Training Records (SB 513). This new law expands employer recordkeeping obligations under Labor Code section 1198.5 to include education and training records that you already maintain as part of the personnel file . Employers must retain these records, which should include the names of the employee and training provider, duration and date of the training, the core competencies of a training (such as any skills in equipment or software obtained in the training), and the resulting certification or qualification. With this change, employers must include education and training records as part of the employee’s personnel file when requested under section 1198.5.
Amendment to Equal Pay Act (SB 642). This new law continues the revisions and modifications to the Equal Pay Act. The definition of “pay scale” is amended so that job postings must include “a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.”
The amendment also adds definitions for “sex,” “wages,” and “wage rate” to Labor Code 1197.5, which prohibits employers from paying employees who perform substantially similar work differently based on the employee’s sex. The new definitions clarify that “wages” and “wage rate” include all forms of pay, including but not limited to salary, overtime pay, bonuses, stock or stock options, profit sharing and bonus plans, vacation and holiday pay, and other benefits. Employers must ensure that employees who perform substantially similar work are not paid differently and are not entitled to different benefits on the basis of sex. The Act’s language regarding equal pay for substantially similar work has also been amended to apply to employees of “another sex,” (instead of the “opposite sex”), making the language inclusive of non-binary people.
The amendment expands the statute of limitations from two to three years, and employees may also obtain relief for the entire period that the violation existed up to a maximum of six years. The new law adds language specifically outlining that a cause of action for violation of the Act occurs when: (1) an alleged unlawful compensation decision or other practice is adopted; (2) an individual becomes subject to an alleged unlawful compensation decision or other practice; or (3) when an individual is affected by the application of an alleged unlawful compensation decision or other practice.
This is just a summary of some of the changes to California’s employment laws.
Please do not hesitate to contact me with questions!
California Employment Law Blog 