California’s legislature and regulators have introduced numerous changes affecting employers in 2026. Business owners and HR professionals must update their policies to comply with new requirements on wages, workplace notices, leave entitlements, and more.
Below is an organized summary of 25 key new laws taking effect as we enter 2026, along with their official bill numbers and code section references for further detail. Each item includes the legal citation (such as an Assembly Bill “AB” or Senate Bill “SB” number, or a California code section) corresponding to the change.
1. Statewide Minimum Wage Increase
Labor Code § 1182.12
Effective January 1, 2026, California’s minimum wage rises to $16.90 per hour for all employers, regardless of size. This increase was triggered by inflation under a pre-existing law.
With this change, the minimum annual salary for exempt employees increases to $70,304 (twice the minimum wage for full-time employment).
Many cities and counties have higher local minimum wage ordinances. Employers must comply with the highest applicable wage.
2. SB 648 (2025) – Enforcement of Tip and Gratuity Protections
Labor Code § 351
SB 648 strengthens protections for tipped employees by authorizing the Labor Commissioner to investigate and cite employers for tip misappropriation.
Employers may not take any portion of gratuities left for employees. Violations can result in civil penalties similar to minimum wage violations, including:
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$100 per employee per pay period for initial violations
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$250 per employee per pay period for subsequent violations
Employers must also ensure service charges are properly distributed when they function as tips.
3. SB 809 (2025) – Independent Contractors and Business Expense Reimbursement
Labor Code § 2802
SB 809 addresses misclassification issues and clarifies expense reimbursement obligations:
Construction Trucking Amnesty Program
Allows qualifying trucking employers to reclassify drivers as employees without penalties for past misclassification if they enter approved settlement agreements.
Vehicle Expense Reimbursement Clarification
Confirms that employers must reimburse employees for personal vehicle use, including mileage, fuel, maintenance, insurance, and depreciation attributable to work use.
4. AB 858 (2025) – Extension of COVID-19 Right to Recall
Labor Code § 2810.8
Extends pandemic-era recall obligations for certain hospitality and building service employers until January 1, 2027.
Covered employers must continue offering available positions to employees laid off due to COVID-19 before hiring new workers.
5. SB 261 (2025) – Penalties for Unpaid Wage Judgments
Labor Code § 98.2
Employers who fail to pay final wage judgments within 180 days may face civil penalties up to three times the unpaid amount, in addition to the original judgment.
The law also expands successor liability and authorizes public posting of unpaid judgments.
6. AB 406 (2025) – Expanded Leave and Anti-Retaliation for Crime Victims
Labor Code §§ 230, 230.1; Gov. Code § 12945.8
Expands paid and unpaid leave for employees who are victims of serious crimes (or whose family members are victims) and strengthens anti-retaliation protections.
Paid sick leave may now be used for court proceedings related to qualifying crimes.
7. SB 513 (2025) – Training Records Added to Personnel Files
Labor Code § 1198.5
Employers must maintain training and education records as part of employee personnel files, including:
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Employee name
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Training provider
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Dates and duration
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Topics covered
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Certifications earned
Employees have the right to inspect and obtain copies of these records.
8. SB 294 (2025) – Workplace Know Your Rights Act
Labor Code § 1550 et seq.
Requires employers to provide an annual written notice summarizing key employee rights, including:
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Workers’ compensation
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Misclassification protections
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Immigration-related rights
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Organizing rights
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Paid sick leave
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Heat illness protections
Notices must be provided annually and in the employee’s primary language.
9. SB 590 (2025) – Paid Family Leave for Designated Persons
Unemployment Insurance Code §§ 3301–3303
Expands Paid Family Leave benefits to cover care for a “designated person” equivalent to a family relationship.
Effective July 1, 2028.
10. SB 464 (2025) – Expanded Pay Data Reporting
Government Code § 12999
Adds job categories, requires segregation of demographic data, and imposes automatic penalties for failure to submit required pay data reports.
11. AB 692 (2025) – Ban on “Stay-or-Pay” Agreements
Business & Professions Code § 16608; Labor Code § 926
Prohibits agreements requiring employees to repay training or employment-related costs upon termination, with limited exceptions.
Violations may result in statutory damages and attorneys’ fees.
12. AB 751 (2025) – Permanent Meal/Rest Break Exception for Petroleum Facilities
Labor Code § 226.75
Makes permanent an industry-specific exemption allowing on-duty rest breaks in safety-sensitive petroleum operations.
13. AB 963 (2025) – Public Works Recordkeeping
Labor Code §§ 1776, 1784
Expands payroll record production obligations for owners and developers on public works projects and increases penalties for non-compliance.
14. SB 642 (2025) – Equal Pay Act Amendments
Labor Code § 1197.5; § 432.3
Clarifies pay equity protections, expands definition of wages, refines pay scale requirements, and extends back-pay recovery periods.
15. SB 477 (2025) – CRD Class and Group Complaint Procedures
Government Code §§ 12961, 12964.5
Overhauls how the Civil Rights Department handles class and group discrimination complaints.
16. SB 617 (2025) – Cal-WARN Notice Requirements
Labor Code § 1401
Adds new content requirements to mass layoff notices, including reemployment services and CalFresh information.
17. AB 1514 (2025) – ABC Test Exemptions Extended
Extends independent contractor exemptions for:
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Licensed manicurists (until 2029)
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Commercial fishers (until 2031)
18. AB 566 (2025) – Opt-Out Preference Signal Requirement
Requires businesses to honor browser-based privacy opt-out signals by 2027.
19. AB 288 (2025) – PERB Authority Over Private-Sector Labor Disputes
Allows California’s PERB to intervene in certain private-sector labor disputes if the NLRB fails to act.
20. AB 1340 (2025) – Collective Bargaining for Rideshare Drivers
Grants rideshare drivers the right to organize and bargain collectively while maintaining independent contractor status.
21. SB 303 (2025) – Bias Training Protections
Gov. Code § 12950.1
Protects employees from discipline or liability based on bias self-assessment or training participation.
22. AB 250 (2025) – Sexual Assault Claim Revival Extension
Code of Civil Procedure § 340.16
Extends the revival window for adult sexual assault claims through December 31, 2027.
23. Healthcare Worker Minimum Wage (SB 525 – prior law)
Healthcare minimum wage increases to $25/hour effective June 1, 2026 for large facilities, with phased schedules for others.
24. CalSavers Final Phase
Government Code § 100000 et seq.
As of 2026, all California employers with at least one employee must offer CalSavers or a private retirement plan.
25. COVID-19 Supplemental Paid Sick Leave (Potential Re-Enactment)
While expired, employers should remain alert to possible re-enactment if public health conditions change.
Conclusion
California employment law continues to evolve rapidly. Employers must stay informed, update policies, and consult statutory language or counsel as needed to ensure compliance.
