California 2026 Labor Law Updates: What Employers Need to Know
- Susan Shu
- 7 days ago
- 7 min read
As the 2025 California legislative session closed, Governor Gavin Newsom signed several major labor and employment bills into law. These changes—effective January 1, 2026—will impact pay transparency, employee rights, wage enforcement, and gig economy regulation. Employers operating in California should begin preparing now to ensure full compliance and reduce legal risk.
This article highlights the most important updates that California employers should be aware of heading into 2026. If your company needs assistance reviewing your employment policies or adapting to new compliance requirements, please contact the ILS legal team at contact@consultils.com.
By February 1, 2026, employers must provide all employees with a separate written notice outlining their immigration-related workplace rights. New hires must receive the notice upon onboarding, and all employees must be re-notified annually. Employees can also designate an emergency contact, who must be notified if the employee is detained or arrested during work hours or on work premises.
Compliance checklist:
Download the official template from the Labor Commissioner’s website after Jan 1, 2026.
Include the notice in all new hire packets.
Set up an annual reminder to reissue the notice.
Collect emergency contact info from employees.
Keep records of when and how notices were distributed.
Click the link to read our SB 294 employer guide, which provides detailed strategies for staying compliant with California’s updated law.
SB 642 amends California’s pay transparency and equal pay laws. It clearly defines “pay scale” as the employer’s good-faith estimate of expected pay at the time of hire. It also broadens the definition of “wages” to include bonuses, stock, profit-sharing, paid time off, stipends, reimbursements, and more.
Compliance checklist:
Review all job postings to ensure listed pay ranges are realistic and in good faith.
Conduct pay equity audits to fix disparities based on gender or race.
Keep written records of pay decisions to show legitimate, non-discriminatory reasons.
Train HR teams on compliance with pay transparency and equal pay laws.
Click the link to read our SB 642 employer guide, which provides detailed strategies for staying compliant with California’s updated law.
Except in limited situations, employers can no longer require employees to repay costs or bonuses if they leave the company. In particular, repayment of signing bonuses and training costs is heavily restricted. If a retention bonus is offered, an employer’s right to fire the employee during that retention period is also limited.
Compliance checklist:
Remove unlawful repayment terms from employment agreements and offer letters.
Redraft signing bonuses, training agreements, and retention clauses to comply with AB 692.
Consider legal alternatives such as deferred compensation or performance-based bonuses.
Click the link to read our AB 692 employer guide, which provides detailed strategies for staying compliant with California’s updated law.
SB 261 significantly strengthens enforcement of unpaid wage judgments. If an employer loses a wage claim lawsuit, they must pay the worker’s legal fees. If the employer loses an appeal, they must also cover appellate legal costs. If the judgment remains unpaid 180 days after the appeal period, penalties can reach up to three times the amount owed. These obligations can even transfer to a successor company in an acquisition.
Compliance checklist:
Audit wage payment and timekeeping practices.
In any M&A, assess whether the target company has outstanding wage judgments.
Resolve wage disputes early to avoid expensive litigation.
Click the link to read our SB 261 employer guide, which provides detailed strategies for staying compliant with California’s updated law.
When the National Labor Relations Board (NLRB) is unable to perform its duties, AB 288 authorizes the California Public Employment Relations Board (PERB) to step in and take over the handling of private-sector labor disputes.
Under AB 288, PERB is granted the authority to:
Process union representation petitions and certify exclusive bargaining representatives;
Investigate and rule on unfair labor practice complaints;
Issue remedial orders, including requiring employers to bargain with unions, reinstate terminated employees, or take other corrective actions;
Impose civil penalties for unfair labor practices;
Order mandatory arbitration if the employer and union fail to reach a collective bargaining agreement after six months of negotiations.
This change means employers may now be subject to both federal and state labor oversight at the same time. In some cases, compliance obligations under state and federal law may overlap—or even conflict.
Compared to the NLRB, PERB generally takes a more employee-friendly approach, and its enforcement standards are often more aggressive and stricter. As a result, employers could face higher compliance risks if they are not prepared.
Compliance checklist:
Employers should take the following steps to prepare for this dual regulatory environment:
Prepare for dual oversight, including the possibility of handling labor disputes at both the federal and state levels;
Review labor relations policies to ensure compliance with federal labor law while also meeting PERB’s enforcement standards;
Train managers and HR personnel to understand what actions or situations may trigger PERB jurisdiction;
Exercise extra caution during union organizing activities, as such matters may now be subject to PERB’s more intensive scrutiny.
Click the link to read our AB 288 employer guide, which provides detailed strategies for staying compliant with California’s updated law.
Under California’s Worker Adjustment and Retraining Notification (Cal-WARN) Act, companies with 75 or more employees must provide at least 60 days’ written notice to affected employees before conducting a mass layoff, relocation, or plant closure.
SB 617, which amends the Cal-WARN Act, adds two new disclosure requirements that employers must include in their layoff notices starting January 1, 2026:
Employers must state whether reemployment services will be provided through a local workforce development board or other public or private agencies.
Employers must also include information about CalFresh, California’s statewide food assistance program, to help laid-off employees understand the public benefits they may be eligible for.
Compliance checklist:
Update existing Cal-WARN notice templates to include the newly required statements;
Establish contact with local workforce development boards to determine what reemployment services are available and how to reference them accurately in layoff notices;
Train HR teams on the updated disclosure obligations and make sure they are prepared to issue compliant notices;
Factor in these added disclosure duties early when planning for mass layoffs or site closures.
Click the link to read our SB 617 employer guide, which provides detailed strategies for staying compliant with California’s updated law.
Other Key Laws to Watch
AB 1340 grants certain gig drivers—such as those working for Uber and Lyft—the right to form unions, engage in collective bargaining, and participate in coordinated activities, without being classified as employees. The Public Employment Relations Board (PERB) is responsible for implementing the law, including overseeing elections and investigating unfair labor practices. This legislation may have a major impact on the gig economy, setting a precedent for independent contractors to negotiate collectively.
Click the link to read our full AB 1340 article and learn how employers should prepare.
SB 648 gives the Labor Commissioner the authority to enforce tip theft claims. Previously, the Commissioner lacked clear power to penalize or sue employers who improperly withheld tips from workers.
Click the link to read our full SB 648 article and get ahead of compliance requirements.
AB 406 expands job-protected leave for employees who are crime victims, or whose family members are victims, by adding more qualifying reasons to take leave—such as attending juvenile proceedings, plea deals, or sentencing hearings. It also updates California’s jury duty law to require employees to give their employer “reasonable advance notice,” unless it’s impractical.
Click the link to read our full AB 406 article for employer compliance guidance.
SB 303 amends the California Fair Employment and Housing Act to clarify that an employee’s good-faith participation in employer-requested bias reduction training—including assessments or acknowledgment of personal bias—does not constitute unlawful discrimination. The goal is to support more honest, open participation in these trainings.
Click the link to explore our SB 303 article and how this affects workplace training programs.
SB 513 expands the right of employees to view and obtain copies of their personnel records, including those related to performance evaluations, complaints, and education or training history.
Click the link to read our SB 513 article and learn how to update your recordkeeping policies.
California’s 2026 labor law changes are wide-ranging and complex, covering pay practices, employee rights, union oversight, and more. Employers must proactively update their HR policies, contracts, and systems to stay compliant. HR teams and managers should receive proper training to understand their new responsibilities, and employers must document compliance efforts carefully.
For support reviewing your current policies or meeting new legal obligations, contact the ILS legal team at contact@consultils.com.
Disclaimer: The materials provided on this website are for general informational purposes only and do not, and are not intended to, constitute legal advice. You should not act or refrain from acting based on any information provided here. Please consult with your own legal counsel regarding your specific situation and legal questions.
As Managing Partner at ILS, Richard Liu ranks among the leading U.S. attorneys in corporate, employment, and regulatory law. He is known for crafting legal strategies aligned with clients’ business objectives and advising Fortune 500 companies, startups, and executives on corporate transactions, financing, privacy, and employment matters across the technology, healthcare, and financial sectors.
Before founding ILS, Richard practiced at top defense firms, where he developed a reputation for anticipating risks and designing strategies that balance protection with growth. He has secured favorable outcomes in contract and intellectual property disputes, represented clients in state and federal courts, and is recognized for combining large-firm expertise with boutique-firm agility. Richard is also a frequent speaker at industry and legal conferences.
Email: contact@consultils.com | Phone: 626-344-8949
Susan is specialized in employment law and compliance, with additional experience in cross-border investments. With years of experience advising multinational clients, Susan focuses on employment-related matters, including workforce structuring, employee transfers, terminations, compensation and benefits, and workplace policies. She has extensive experience assisting companies in navigating complex labor regulations, managing cross-border employment issues, and resolving workplace disputes.
In addition to her employment law practice, Susan advises on M&A, private equity, venture capital, and cross-border investments. She has assisted international investors with complex deal structures, including VIE frameworks, and prepared due diligence reports and transaction documents.
Email: contact@consultils.com | Phone: 626-344-8949
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