California’s 2026 Employment Laws: Practical Steps for Employers to Stay Ahead

By Fred W. Alvarez, Hannah L. Jones, Daniel M. Bruggebrew, Allison Moser, Paige B. Pulley, Hannah Withers, and Stacey Zartler

With the Governor’s signing window closed, employers now have clarity on which proposed California workplace measures will take effect in 2026. Our prior alert, “Legislative Bills That Could Redefine California Workplaces in 2026,” outlined the key California proposals under consideration with a summary of each bill. This update focuses on the California employment measures that became law and provides practical guidance to help California employers prepare for the sweeping changes ahead.

AB 692 – Ban on Most Stay-or-Pay Agreements

Key Requirements/Changes: Makes most repayment or retention provisions in employment unenforceable; limited exceptions for tuition or education costs.

Action Items: Employers should carefully review employment agreement templates that include repayment or retention provisions, such as signing bonuses or training cost reimbursements. Any “stay-or-pay” language that does not meet the limited statutory exceptions should be removed or revised to comply with the new law. Employers may wish to develop alternative retention strategies—such as milestone-based bonuses or enhanced career development opportunities—to achieve retention goals without relying on repayment agreements.

SB 464 – Broader Pay Data Reporting Requirements

Key Requirements/Changes: Expands pay data demographic reporting to include sexual orientation.

Action Items: Employers subject to California’s pay data reporting requirements should prepare for expanded pay data reporting obligations in the next filing cycle and confirm that vendors or third-party reporting platforms can accommodate the new data fields.

SB 642 – Pay Scale in Job Postings

Key Requirements/Changes: Clarifies definition of “pay scale” disclosures in job postings; extends lawsuit deadline to 3 years.

Action Items: Companies should review their job posting templates and hiring procedures to ensure compliance with the clarified definition of “pay scale.” Pay ranges should reflect a “good-faith estimate” of what the employer reasonably expects to pay for a position upon hire. Recruiting and compensation teams should align on consistent methodologies for establishing pay ranges and maintain documentation supporting these determinations, as employers will now need to retain such records for at least three years to defend against potential claims.

SB 590 – Paid Family Leave Expanded to Chosen Family

Key Requirements/Changes: Extends California PFL benefits to care for a “designated person,” aligning with the California Family Rights Act, starting in 2028.

Action Items: Employers should update their leave request forms, benefits communications, and internal policies to include care for a “designated person” as a qualifying reason for Paid Family Leave benefits starting July 1, 2028.

SB 513 – Personnel Records Must Include Training Data

Key Requirements/Changes: Adds training, education, and certification details to required personnel records.

Action Items: Employers should audit their personnel files to confirm that employee training, certification, and education records are properly documented. Going forward, HR teams should establish a consistent process for recording the type, date, and outcome of all required training programs. Employers may need to update their HRIS systems or personnel record templates to ensure this information can be easily accessed and verified during audits or employee file requests.

SB 303 – Good Faith Bias Disclosure Protections

Key Requirements/Changes: Good faith disclosures of bias during discrimination or other bias mitigation trainings does not constitute unlawful discrimination.

Action Items: Employers should update internal policies and training materials to reflect that good faith admissions of bias during bias mitigation trainings do not constitute unlawful discrimination. Employers should also ensure that disciplinary decisions are not based on these good faith disclosures.

SB 294 – Know Your Rights Notice

Key Requirements/Changes: Requires new workplace notice by Feb. 1, 2026; $500/day penalty per employee for noncompliance.

Action Items: Employers should prepare to distribute the new “Know Your Rights” notice to all employees before the February 1, 2026 deadline. HR and compliance teams should monitor guidance from the Labor Commissioner for the official notice template and ensure that both onsite and remote employees receive it. Employers should also maintain clear records of when and how the notice was distributed to demonstrate compliance and avoid penalties.

The Coblentz Employment team is available to answer any questions you may have about the impact of these regulations.