California will implement significant employment law reforms in 2026 that gives workers more rights, stronger protections, and better ways to hold employers accountable. These changes, enacted by Governor Newsom and the legislature in 2025, reflect California’s ongoing focus on fair pay, transparency, and stronger worker protections.
For employees, and the attorneys who represent them, understanding these new laws is essential for protecting workers’ rights and pursuing claims under California labor law.
- Pay Transparency and Stronger Equal Pay Protections (SB 642)
Under California’s expanded pay transparency laws:
- Employers with 15 or more employees must include a good faith estimate of the salary or hourly pay range in all job postings, rather than vague or overly broad ranges. Employers must disclose what they reasonably expect to pay a new hire.
California’s Equal Pay Act already prohibits paying employees less for substantially similar work. Starting in 2026, the law explicitly protects workers from pay discrimination based on “another sex,” making clear that nonbinary and gender-diverse employees are also fully protected.
SB 642 also broadens the definition of “wages” to include all forms of pay, such as bonuses, stock, stock options, allowances (like cleaning or gas), hotel accommodations, and travel reimbursements. Employers must now ensure that all compensation, not just a salary or hourly pay, is provided equally across genders unless a legitimate business justification applies.
The law also extends the time for an employee to bring an Equal Pay Act claim to three years from the date of the violation. While employees may recover for the entire period that a violation exists, recovery is capped at six years of back pay. These changes are especially important because many workers don’t realize they are being underpaid until years later.
- Expanded Notice and Worker Rights Requirements (SB 294)
California’s new “Workplace Know Your Rights Act” requires employers to provide employees with a stand-alone written notice explaining basic workplace rights.
By February 1, 2026, all employees must receive written notice covering topics like:
- Workers’ compensation rights
- The right to organize or join a union
- Immigration-related workplace protections
- Constitutional rights at work
- How to report workplace violations
New hires must also receive these notices at the start of their employment. Many workers are unaware of their rights because employers never explain them. This law removes that excuse, and an employer’s failure to provide notice may support legal claims.
Employers must also allow employees to designate an emergency contact and must notify that contact if the employee is arrested or detained at work. Failure to comply can result in penalties of up to $500 per employee per violation, and up to $10,000 per employee for certain violation, including failure to notify emergency contacts.
- Expanded California’s Worker Adjustment and Retraining Notification (Cal-WARN) Notices for Mass Layoffs (SB 617)
Employers conducting a mass layoff, relocation, or closure must now include information in Cal-WARN notices, including details about:
- Unemployment and food assistance (such as CalFresh)
- Workforce development and retraining programs
- Local resources available to displaced workers
Employees facing sudden job loss are often left scrambling. This law ensures workers receive meaningful information about benefits and available assistance when they need it most.
- Making “Stay-or-Pay” Contracts Illegal (AB 692)
Some employers require workers to repay training costs, relocation expenses, or educational fees if they leave the job early – often called “stay-or-pay” provisions. California has now banned them; effective January 1, 2026, new stay-or-pay provisions are void and unenforceable. Under the new law, employees harmed by these clauses may seek actual damages, penalties of up to $5,000 per worker, and attorneys’ fees. Employers can no longer financially trap workers, and the new law creates a new cause of action for employees subjected to unfair contract terms.
- Expanded Personnel File Access (SB 513)
California employees will have expanded rights to inspect their personnel files. Previously, employers were required to allow inspection of records relating to performance or grievances. Under the amended law, employers must also allow employees to inspect records related to their education and training. This change supports employees in wage, promotion, discrimination, and wrongful termination claims by improving access to critical documentation.
- Minimum Wage Increase
Effective January 1, 2026, California’s minimum wage increases to at least $16.90 per hour. Additionally, because California ties the minimum salary for many salaried (exempt) employees to the state’s minimum wage, the minimum annual salary threshold for exempt executive, administrative, and professional employees will increase to $70,304 (or $5,858.67 per month).
- Expansion of Paid Sick & Safe Leave (AB 406)
Under the new amendments, employees may use paid sick leave, and certain unpaid leave, if the employee or a covered family member is a victim of certain crimes and needs to attend related judicial proceedings. Covered proceedings include, but are not limited to, delinquency hearings, bail or release determinations, plea or sentencing hearings, post-conviction proceedings, and other hearings where a victim’s rights are at stake. A “victim” includes individuals harmed physically, psychologically, or financially by violent or serious felonies, as well as felony theft or embezzlement, whether actual or attempted.
- High Penalties for Unpaid Wage Judgments (SB 261)
When an employee obtains a wage judgment and the employer fails to pay within 180 days, the courts may now impose:
- Triple penalties (up to three times the unpaid amount)
- Mandatory attorneys’ fees and costs
- Enhanced enforcement authority for the Labor Commissioner
These provisions are designed to ensure employers actually pay what they owe and face serious consequences if they do not.
Why These Laws Matter for California Workers
Taken together, California’s 2026 employment laws:
- Expand employee rights
- Increase employer accountability
- Create new penalties and claims
- Strengthen wage and discrimination claims
- Improve employee access to information and evidence
If your employer:
- Isn’t paying you fairly
- Fails to disclose pay information
- Uses unfair contract terms
- Doesn’t provide required notices
- Denies access to personnel records
…you may have legal claims under California labor and employment law.
Talk to a California Employment Lawyer About Your Rights
Employment laws are complex, and employers don’t always follow them. If you believe your workplace rights have been violated, speaking with an experienced California plaintiff-side employment attorney can help you understand your options.
