Updated December 10, 2025
New California Laws In 2026: What Employers and Workers Need to Know
California continues its tradition of progressive workplace legislation with a slate of new employment laws set to take effect in 2026. These regulations aim to enhance worker protections, address wage disparities, and create more equitable working conditions across the state. Whether you’re an employee or employer, understanding these upcoming changes is crucial for workplace compliance and protecting your rights.
The Golden State’s 2026 employment law updates touch on everything from contract restrictions to wage transparency, creating significant shifts in how businesses operate and how workers are treated. Let’s explore the most impactful changes coming to California workplaces.
1. Contract Restrictions and Employee Protections
Starting January 1, 2026, California will implement substantial changes to employment contracts that significantly enhance worker mobility and rights. The new "Stay or Pay" legislation marks a decisive shift in how employers can structure employment agreements.
Under this groundbreaking law, employers will be prohibited from including terms in employment contracts that impose penalties or fees if an employee decides to end their employment relationship. The legislation specifically targets provisions that require employees to pay debts or authorize debt collection when they leave a position. This change aims to eliminate financial barriers that often prevent workers from pursuing better opportunities.
The law provides robust enforcement mechanisms, including private rights of action for affected employees. Workers subjected to prohibited contract terms can seek minimum damages of $5,000 per violation, along with injunctive relief and recovery of attorney’s fees and costs. This creates a powerful deterrent against employers who might otherwise attempt to restrict worker mobility through financial penalties.
For construction industry workers, additional protections are being implemented. Employers will be required to reimburse employees for the use, upkeep, and depreciation of trucks, tractors, trailers, or other commercial vehicles that employees own and use for work purposes. This provision recognizes the significant costs workers incur when using personal equipment for company benefit.
2. Expanded Leave Rights for Crime Victims
California’s commitment to supporting crime victims will be strengthened through expanded leave provisions taking effect January 1, 2026. These changes provide crucial workplace accommodations for employees dealing with traumatic situations.
The new legislation expands the reasons employees can use both paid sick leave and certain unpaid leave options. Specifically, workers will be able to use these leave benefits if they or a covered family member becomes a victim of certain crimes and needs to attend related judicial proceedings. This represents a significant expansion of existing protections.
Covered proceedings under the new law include bail or release determinations and plea or sentencing hearings. This comprehensive approach ensures that victims and their families can participate in the justice process without risking their employment or financial stability.
These expanded leave rights acknowledge the complex challenges crime victims face and provide necessary workplace accommodations during difficult times. The law recognizes that supporting victims through the judicial process serves both individual and societal interests in justice and recovery.
3. Industry-Specific Meal and Rest Period Modifications
California’s meal and rest period requirements will see targeted modifications for specific industries beginning in 2026, balancing operational needs with worker protections.
Water corporation employees covered by valid collective bargaining agreements will join electrical corporation, gas corporation, and local publicly owned electric utility workers in being exempt from certain meal period requirements. This change recognizes the unique operational demands of utility providers while ensuring worker protections through collective bargaining.
For petroleum facilities and refineries, the exemption from rest period requirements for safety-sensitive employees will become permanent, removing the previous January 1, 2026 expiration date. This change acknowledges the critical nature of these positions, where continuous monitoring may be necessary for safety reasons. The exemption will also extend to comparable roles at refineries processing alternative feedstocks, reflecting industry evolution.
These targeted modifications demonstrate California’s nuanced approach to labor regulations, recognizing that different industries may require specialized rules while maintaining core worker protections. The Labor Commissioner will continue to oversee enforcement of these provisions, ensuring compliance across affected industries.
4. Enhanced Fair Employment and Housing Act Procedures
California’s Fair Employment and Housing Act (FEHA) will see procedural improvements starting January 1, 2026, strengthening protections against workplace discrimination and harassment.
The new law expands the circumstances for tolling the statute of limitations for individuals filing civil lawsuits under FEHA. Specifically, the limitations period will be tolled when an individual appeals a decision from the California Civil Rights Department or enters into an agreement with the Department. This change provides complainants with additional time to pursue their claims through the judicial system.
This procedural enhancement addresses a significant barrier that has prevented some discrimination claims from being fully adjudicated. By extending the timeframe during appeals or agreement negotiations, the law ensures that substantive discrimination claims aren’t dismissed on technical timing grounds.
The modification reflects California’s commitment to ensuring that anti-discrimination protections are meaningful and accessible. By removing procedural hurdles, the state aims to create a more effective system for addressing workplace discrimination and harassment.
5. Expanded Recordkeeping and Notification Requirements
Employers will face expanded recordkeeping and notification obligations under several new laws taking effect in 2026, increasing transparency and accountability in California workplaces.
Personnel records will need to include more comprehensive education and training documentation. Specifically, employers must maintain records that include the employee’s name, training provider information, duration and date of training, core competencies or skills covered, and any resulting certifications or qualifications. This change ensures that employees’ professional development is properly documented.
For California public works projects, owners and developers will be required to make specific records available upon request to the Division of Labor Standards Enforcement, multi-employer Taft-Hartley trust funds, and joint labor-management committees. Failure to comply with requests from the Division could result in penalties, enhancing enforcement of labor standards on public projects.
The California Worker Adjustment and Retraining Notification (WARN) Act will require additional information in employer notices. Starting January 1, 2026, employers must state whether they plan to coordinate services for affected employees through the local workforce development board, another entity, or not at all. Regardless of their choice, employers must provide the local development workforce board’s contact information and a description of its services in the notice.
Perhaps most significantly, the Workplace "Know Your Rights" Act will require employers to post a state agency poster and provide a stand-alone written notice to each employee beginning February 1, 2026. This notice must address independent contractor misclassification protections, heat illness prevention, workers’ compensation, paid sick days, and other critical workplace rights. Additionally, employers will be required to notify an employee’s emergency contact if the employee is arrested or detained while at work.
If you need a free consultation, call Setyan Law at (213)-618-3655. Free consultation.
6. Pay Equity and Wage Enhancements
California continues its leadership in addressing pay equity with several significant changes to wage-related laws taking effect in 2026.
The statewide minimum wage will increase to $16.90 per hour for all employees, continuing the annual adjustments that have been occurring since 2023. These increases are tied to the Consumer Price Index for Urban Wage Earners, ensuring that minimum wage keeps pace with inflation. It’s important to note that some sectors, including fast food and healthcare, have higher minimum wages, as do certain cities and counties within California.
Employee pay data reporting requirements will be enhanced to address wage disparities more effectively. Beginning January 1, 2026, penalties for non-compliance will become mandatory upon request from the Civil Rights Department. Reports for 2026 will be due by May 12, and employers will be required to store demographic data separately from personnel records, enhancing privacy protections.
The Equal Pay Act will see significant revisions, including updated definitions of pay scale, sex, wages, and wage rates. The law will also provide new guidance on what constitutes a cause of action for violations of the California Equal Pay Act, clarifying enforcement mechanisms.
For unpaid wage judgments, the Labor Commissioner’s Office will be required to post unsatisfied awards against employers on its website. If an award remains unsatisfied after 180 days, a penalty equal to three times the award amount will be imposed, creating a powerful incentive for prompt payment of wage judgments.
7. Employee Organizing and Labor Relations
California is expanding worker organizing rights in 2026 through several groundbreaking measures that strengthen collective bargaining opportunities across different sectors.
In a significant development, California’s Public Employment Relations Board (PERB) will be authorized to enforce provisions of the National Labor Relations Act in the private sector when the National Labor Relations Board declines or is unable to act. This creates a state-level backstop for enforcing federal labor protections, ensuring workers’ organizing rights are protected even when federal enforcement is unavailable.
Transportation network company drivers will gain explicit organizing rights through the Network Company Drivers Labor Relations Act. This legislation grants drivers the right to organize, bargain collectively, and engage in concerted activities for mutual aid or protection, regardless of their status as independent contractors. This represents a major expansion of organizing rights to workers in the gig economy.
For certain occupations, there will be adjustments to independent contractor classifications. Beginning January 1, 2026, exemptions for manicurists and commercial fishers under existing independent contractor laws will be amended, potentially affecting how these workers are classified and their access to employment benefits.
8. Health and Safety Protections
Worker health and safety receive focused attention in California’s 2026 employment law updates, with particular emphasis on industry-specific hazards and pandemic recovery.
The right-to-rehire provisions for workers laid off due to the COVID-19 pandemic will be extended until January 1, 2027. This extension covers employees of certain airport service and hospitality providers, building service providers, hotels, private clubs, and event centers, ensuring continued job security for workers in sectors heavily impacted by the pandemic.
For workers exposed to artificial stone, the Silicosis Training, Outreach, and Prevention (STOP) Act will implement crucial protections. The law will prohibit dry cutting methods on artificial stone and require employers to implement effective "wet" methods to suppress dust. Employers will also be required to report cases of silicosis to the state, with violations potentially resulting in fines or shutdown orders. These measures address the serious occupational hazard of silicosis, a debilitating lung disease caused by silica dust exposure.
Conclusion
California’s 2026 employment law changes represent a comprehensive approach to enhancing worker protections while addressing evolving workplace challenges. From contract restrictions and expanded leave rights to pay equity measures and organizing protections, these new laws will significantly impact employment relationships throughout the state.
Both employers and employees should begin preparing for these changes well before their implementation dates. Employers should review and update their policies, contracts, and recordkeeping systems to ensure compliance, while employees should familiarize themselves with their new rights and protections.
As California continues to lead the nation in progressive employment legislation, these 2026 updates further the state’s commitment to creating fair, safe, and equitable workplaces for all Californians.
California consistently leads the nation in progressive employment legislation, and these latest changes reinforce that trend. Despite the compliance challenges these regulations present, they ultimately aim to create more equitable, transparent, and supportive workplaces. Businesses that adapt proactively will find themselves better positioned to thrive in California's evolving regulatory landscape while avoiding costly penalties and litigation.
References
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If you need employment litigation, call Setyan Law at (213)-618-3655. Free consultation.
