As published in the Salinas Valley Business Journal, December 2025
By Sharilyn Payne, Attorney
California employers face the challenge of complying with the state’s employment laws. Each year, multiple new laws go into effect that impact employers, and 2026 is no different. Following is a summary of some of the significant new laws.
WAGE AND HOUR
California Minimum Wage: Effective January 1, 2026, the minimum wage is increasing to $16.90 per hour. As a result, employees who fall under the executive, administrative, or professional exemption must receive a threshold annual salary of no less than $70,304.
Unpaid Labor Commissioner Judgments (SB No. 261): Although employees can file a lawsuit in court when they feel they have not been paid all wages owed, they can also file a complaint with the California Labor Commissioner. If the Labor Commissioner’s office awards an employee an amount for unpaid wages, the employer can either pay the amount or appeal the decision within ten (10) days. If the employer does not timely pay the amount or file an appeal, the Labor Commissioner’s office files with the court a judgment in the amount awarded to the employee.
Under this new law, if the final judgment remains unsatisfied after a period of 180 days after the time to appeal has expired and no appeal is pending, the employer will be subject to the following:
- a civil penalty not to exceed three times the outstanding judgment amount (half of which goes to the employee, and half to the Division of Labor Standards Enforcement to enforce labor laws);
- post-judgment interest;
- all reasonable attorneys’ fees and costs incurred by the employee in enforcing the judgment.
Pay Data Reporting (SB No. 464): A private employer with 100 or more employees must submit an annual pay data report to the Civil Rights Department (CRD) on or before the second Wednesday of May of each year. Previously, if the CRD did not receive the report, it could seek an order requiring the employer to comply with the requirements. Effective January 1, 2026, upon request by the CRD, a court can impose a civil penalty not to exceed $100 per employee, with that penalty going up to $200 per employee for a subsequent failure to file the report.
Pay Scale (SB No. 642): Employers with 15 or more employees must include the pay scale for a position in any job posting. Effective January 1, 2026, “pay scale” is defined as a “good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.” The civil penalty for violation of this provision ranges from $100 to $10,000 per violation. For a first violation, there is no penalty if the employer can show that all job postings for open positions have been updated to include the pay scale.
This new law also prohibits an employer from paying its employees at wage rates less than those paid to employees of another sex (instead of the opposite sex) and extends the statute of limitations to file a civil action to recover wages based on an unequal pay claim to three years. It also amends the law to allow the employee to obtain relief for up to six years.
NOTICES
New Notice to Employees (SB No. 294): This new law requires that on or before February 1, 2026, and annually thereafter, employers provide a stand-alone written notice to each current employee setting forth the following:
- the employees’ right to workers’ compensation benefits, including disability pay and medical care for work-related injuries or illness;
- employee rights during immigration inspections;
- protections against unfair immigration-related practices against a person exercising protected rights;
- the right to organize a union or engage in concerted activity in the workplace;
- constitutional rights when interacting with law enforcement in the workplace including the right to be free from unreasonable searches and seizures and the right to due process and against self-incrimination;
- a description of new legal developments pertaining to laws enforced by the Labor and Workforce Development Agency;
- a list of the enforcement agencies that may enforce the rights in the notice.
Employers must also provide this notice to new hires at the time of hire. The notice can be provided by email, text message, or personal delivery.
The notice must be provided to employees in the language it normally uses to communicate employment-related information. The Labor Commissioner’s Office is required to develop a template notice and post it on their website on or before January 1, 2026. Employers should check the Labor Commissioner’s website to see if the template notice has been posted by going to the following link: https://www.dir.ca.gov/dlse/.
Furthermore, if an employee has notified their employer that they would like the employer to notify their designated emergency contact in the event the employee is arrested or detained, the employer shall notify the emergency contact if the employee is arrested or detained on the employer’s worksite.
An employer that violates this statute may be subject to a penalty of up to $500 per employee for each violation.
Employers should mark February 1, 2026, on their calendars and start planning the method they will use to provide the notice and how they will track that it was received by employees.
WARN Notices (SB No. 617): The California Worker Adjustment and Retraining Act (“WARN”) requires written notice to employees, the Employment Development Department, and other local agencies in the event of a mass layoff, relocation, or termination of employees. Effective January 1, 2026, the WARN Notice must include information on whether the employer plans to coordinate services through the local workforce development board or another entity, and information regarding the statewide food assistance program known as CalFresh.
PERSONNEL RECORDS
Record Requests (SB No. 513): Within 30 days of an employee’s written request, an employee has the right to inspect and receive a copy of records in their personnel file related to their job performance or related to any grievance concerning the employee. Effective January 1, 2026, an employer that maintains education or training records for its employees must also allow the employee to inspect and receive copies of those records as well, and must ensure those records include the employee’s name, the name of the training provider, the duration and date of the training, the core competencies of a training, and the resulting certification or qualification. An employer that does not comply with this statute may be subject to a penalty of $750.
CONTRACTS
Employment Contracts (AB No. 692): Beginning January 1, 2026, it will be unlawful for an employment contract to include a term that requires the employee to pay an employer for a debt if the employee’s employment ends. This law does not apply to contracts related to the repayment of the cost of tuition or related to loan repayment assistance programs if those are separate agreements from the employment contract and meet certain conditions.
LEAVES OF ABSENCE
Paid Family Leave (SB No. 590): Effective July 1, 2028, benefits under the California state paid family leave program will be expanded to include individuals who take time off work to care for a seriously ill “designated person.” A “designated person” is defined as “any care recipient related by blood or whose association with the individual is the equivalent of a family relationship.” The employee will be required to identify the designated person and attest under penalty of perjury regarding how they are related by blood to the designated person, or how their association with the designated person is the equivalent of a family relationship.
Since almost all of these new laws take effect January 1, 2026, employers should review which require action and put into place all necessary steps to ensure compliance with California law on the first day of the new year.
This article is intended to address of topics of general interest and should not be construed as legal advice. © 2025 Noland, Hamerly, Etienne & Hoss
Ms. Payne is a shareholder at NHEH, and has been practicing in the area of employment law for over 20 years. Her practice focuses on counseling employers in the intricacies of California law to avoid litigation, and on defending employers in lawsuits in state and federal court and before administrative agencies.