California employers heading into 2026 face one of the more crowded legislative years in recent memory. Laws signed during the 2025 session touch everything from harassment claims and wage judgments to pay equity, personnel records, immigration-related notices, and industry-specific rules.
Many of these changes do not overhaul existing systems. Instead, they expand liability windows, tighten enforcement tools, and add procedural requirements that employers need to build into their policies and practices now.
What Are the Key California Employment Law Changes Effective in 2026?
The 2026 California employment law changes span more than a dozen statutory updates. Among the most impactful for employers are:
SB 642, expanding pay equity standards and redefining pay scale
SB 294, adding immigration-related rights notices and emergency contact requirements
SB 261, increasing penalties for unpaid wage judgments
AB 692, limiting employee repayment and clawback agreements
SB 464 and SB 513, expanding pay data reporting and personnel record coverage
AB 858, extending COVID-era right-to-rehire obligations
SB 648, strengthening enforcement for withheld tips
SB 809, addressing construction misclassification and vehicle reimbursement
AB 751 and SB 693, adjusting narrow rest and meal break exemptions
AB 1340, establishing labor relations rules for app-based drivers
AB 288, expanding state authority over certain labor disputes
Not every employer will be affected by every law, but most businesses will feel the impact of several.
How Will the Minimum Wage and Exempt Salary Threshold Change in 2026?
California’s minimum wage increase in 2026 raises the exempt salary threshold for executive, administrative, and professional employees because exempt pay is tied to twice the state minimum wage.
Employers should review exempt salaries carefully, especially for employees near the cutoff. A salary that was compliant in 2025 may no longer meet the threshold in 2026. This is also an appropriate time to review job duties to confirm exemptions still apply, since misclassification remains a common source of wage exposure.
Pay scale structures should also be evaluated for compression and internal equity, particularly in light of expanded pay equity rules.
What New Employee Notices Must California Employers Provide?
SB 294 significantly expands employee notice obligations beginning in 2026. Employers must provide written notices informing employees of their rights related to workers’ compensation, immigration inspections, protection against unfair immigration-related practices, union organizing, and constitutional rights when interacting with immigration officers at work.
Employers must also provide employees with the opportunity to designate an emergency contact. If an employee is arrested or detained at the workplace or during work hours, and the employer has actual knowledge of the detention, the employer must notify that emergency contact.
These requirements affect onboarding materials, annual notices, postings, and internal response procedures. Fines can be assessed on a per-employee basis for violations.
How Is Cal-WARN and the COVID Right-to-Rehire Law Affecting Workforce Decisions?
While Cal-WARN itself is not rewritten wholesale, 2026 reinforces the importance of precision in layoff and closure notices, including clear communication about worker adjustment and retraining resources through SB 617.
Separately, AB 858 extends California’s COVID-era right-to-rehire law through January 1, 2027. Employers that laid off employees during the pandemic must continue to offer newly created positions to qualified former employees and provide written explanations when declining to do so. Record-keeping obligations tied to these decisions remain in place for three years following the layoff.
Employers planning workforce changes should account for both laws when restructuring or rehiring.
What Can Happen If Employers Fail to Comply With 2026 Wage Judgment Rules?
SB 261 dramatically increases the risk associated with unpaid wage judgments. Beginning in 2026, employers that fail to satisfy a wage judgment within 180 days may face civil penalties of up to three times the judgment amount.
These penalties apply to court judgments, including Labor Commissioner decisions that are reduced to judgment. Half of the penalty is paid to the affected employee, and half to the state.
This change makes timely resolution of wage disputes and prompt payment of judgments critical risk-management priorities.
How Are Pay Equity, Pay Scales, and Pay Data Reporting Changing?
Several 2026 laws expand pay equity obligations. SB 642 broadens the definition of “wage rates” for equal pay purposes to include bonuses, stock, benefits, allowances, and other forms of compensation. It also extends the statute of limitations for pay equity claims and clarifies that each paycheck can trigger a new violation.
SB 642 also refines the definition of pay scale in job postings, requiring a good-faith estimate of the salary or hourly wage range expected to be paid upon hire.
At the same time, SB 464 expands pay data reporting requirements for covered employers and mandates stricter penalties for failure to submit required reports. Employers must also store demographic data used for reporting separately from personnel files.
Together, these changes make clean compensation data, consistent job classifications, and accurate pay scales more important than ever.
How Do 2026 Laws Affect Personnel Records, Training Records, and Tips?
SB 513 expands the definition of personnel records to include education and training records if employers choose to maintain them. These records must include specific details, such as training provider, duration, dates, and core competencies achieved, and must be retained for at least three years after termination.
SB 648 strengthens enforcement related to withheld tips by giving the Labor Commissioner authority to investigate and issue citations. This increases risk for hospitality and service employers that mishandle tip distribution, even unintentionally.
Personnel file access policies and record-retention practices should be reviewed carefully.
What Industry-Specific Changes Should Employers Watch?
Certain laws target specific industries. SB 809 affects construction employers by clarifying that vehicle ownership alone does not establish independent contractor status and by reinforcing reimbursement obligations for employee-owned vehicles. It also introduces a construction trucking amnesty program beginning in 2026.
AB 1340 creates a new labor relations framework for transportation network company drivers, including reporting requirements and collective bargaining procedures.
Employers operating in regulated industries should review these changes closely.
What Steps Should Employers Take Now to Prepare for These Changes?
Employers should treat 2026 compliance as a coordinated update rather than a series of one-off fixes.
Key steps include reviewing handbooks, auditing pay practices, updating notices and postings, revising contracts and repayment agreements, auditing personnel files, and training managers on new procedural obligations. Employers should also assess whether industry-specific laws apply to their operations.
Addressing these issues now reduces the likelihood of enforcement actions, employee claims, and costly retroactive corrections.
Preparing for 2026 California Employment Law Changes
The scope of California employment law changes in 2026 is broad, and the risk of overlooking a key obligation is real. Employers that proactively align their policies and practices with these new laws position themselves for stability rather than surprise.
At Fairgrieve Law Office, we provide practical, business-focused advice to California employers. If you are planning a layoff or workforce change, contact our team to review your obligations and reduce risk before taking action.
FAQs
What employment laws are changing in California in 2026?
In 2026, California is updating wage and hour rules, pay transparency and reporting requirements, layoff notice obligations under Cal-WARN, and introducing new employee rights notices.
Do California employers have new notice requirements in 2026?
Yes. Employers must provide a written Workplace Know Your Rights notice to all employees and new hires by February 1, 2026, and update it annually.
How much will the minimum wage be in California in 2026?
The statewide minimum wage in California will be $16.90 per hour in 2026. This means the minimum salary for exempt employees is $70,304.