2026 brings several important changes to the California employment law landscape, affecting pay transparency, leave rights, workplace postings, and employer liability. Below is a summary of key updates that may impact your policies and compliance obligations.
Workplace Know You Rights Notice (SB 294)
By February 1, 2026, and annually thereafter, California employers must provide existing employees and any new hires with a written, stand-alone, Workplace Know Your Rights notice. The notice should outline important information about workplace rights, including protections against discrimination and retaliation, rights related to interactions with law enforcement during work hours, and how to file workplace complaints. The notice should also be delivered in a manner where the employee is likely to receive it within one (1) business day and in a language of their preference.
Designated Emergency Contact
Before March 30, 2026, employers should inquire if employees and any new hires wish to designate an emergency contact in the event the employee is arrested or detained during work hours. Employees may then update the designated emergency contact throughout their employment. (Cal. Lab. Code § 1555.)
The Labor Commissioner’s Office will enforce any violations and will provide a legally compliant notice template that is available here: https://www.dir.ca.gov/dlse/Know-Your-Rights-Notice/Know-Your-Rights-Notice-English.pdf
Pay Transparency (SB 642)
SB 642 amended Labor Code 432.3 and 1197.5. Existing law requires employers with fifteen (15) or more employees to include a pay scale in job postings and to applicants or current employees upon request. SB 642 clarifies that providing a pay scale means, “a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.” Additionally, the statute of limitations to file a lawsuit for pay equity violations is extended from two years to three years, from the date of the violation and obtain relief for the entire period in which the violation exists, but only up to six years.
The changes are consistent with California’s history of providing workers with avenues to challenge unfair pay while also making it harder for employers to hide pay disparities.
Penalties for Unpaid Wage Judgments (SB 261)
SB 261 significantly increases the penalties for unsatisfied wage judgments. If a final wage judgment remains unpaid for 180 days after the appeal period ends, a court may impose penalties that are three-times the outstanding judgment (plus interest), successor liability, and mandatory attorneys’ fees if the employee, the Labor Commissioner, or public prosecutor prevails in an action to enforce the wage judgment.
Pay Data Reporting (SB 464)
Private employers with more than 100 employees must submit annual pay data to the Civil Rights Department (“CRD”). Covered employers and labor contractors are now required to collect demographic and pay data and store it separately from the employee’s personnel file. Failure to submit the report to the CRD may result in a compliance order, plus the costs associated with the order, and mandatory civil penalties.
Paid Family Leave Designation (SB 590)
Starting July 1, 2028, workers will be eligible to use Paid Family Leave (“PFL”), a wage replacement benefit, while they take time off work to care for a seriously ill designated person. A designated person means any care recipient related by blood or whose association with the individual is the equivalent of a family relationship. To seek PFL benefits, the employee must attest under penalty of perjury that the designated person is the equivalent of a familial relationship.
Personnel Records (SB 513)
Employees and their authorized representatives have the right to inspect and receive a copy of their personnel records. SB 513 amends Labor Code 1198.5, requiring employers to also include the employee’s education and training records in their personnel file, and to make it available to the worker upon request.
Workplace Training (SB 303)
To encourage employers to conduct bias mitigation trainings, an employee’s assessment, testing, admission, or acknowledgment of their own personal bias, made in good faith and solicited or required as part of a bias mitigation training, will not constitute unlawful discrimination.
Minimum Wage Adjustments
The statewide minimum wage increased to $16.90/hour. Employers should review local ordinances, especially in cities with a higher minimum wage requirement like San Francisco and Oakland, to ensure compliance.
WARN Notice (SB 617)
SB 617 expands the notice requirements under the California Worker Adjustment and Retraining Notification Act (or “Cal-WARN”). Employers conducting a mass layoff, relocation, or termination at a covered establishment must provide at least a 60-day advance written notice to affected employees. SB 617 now requires employers to also include whether the employer will coordinate services for affected employees through the local workforce development board, another entity, or none at all. The notice must also include a functioning contact information for the employer and entity as well as the rapid response activities offered by the local workforce development board.
Right-to-Rehire Obligations for COVID-19 Layoffs (AB 858)
AB 858 extends the recall and reinstatement rights for certain employees who were laid off because of the pandemic. Under Labor Code 2810.8, the affected employee’s recall and reinstatement rights are extended to January 1, 2027.
Wage Theft Enforcement (SB 648)
Labor Code section 351 is amended to expressly permit the Labor Commissioner to investigate, issue citations, or file civil actions against employers who take, withhold, or charge employees for gratuities received.
Stay-or-Pay Provisions (AB 692)
Employment contracts signed after January 1, 2026, are prohibited from including any provisions requiring an employee to pay an employer, training provider, or debt collector if their employment terminates. Additionally, no penalty, fee, or cost may be imposed on the worker at the end of the employment relationship. While limited exceptions exist, employers should work with counsel to determine if any special circumstances apply.
If you have questions about the new changes highlighted above or other employment-related questions, please contact Jaclyn Tran at jaclyn@sfcounsel.com or any other members of our team including Denis Kenny at denis@sfcounsel.com, John Lough at john@sfcounsel.com or Ryan Stahl at ryan@sfcounsel.com.