Here is the last installment of my new laws for 2026 summary. As always, if you have any questions, please reach out to me through my linked bio below.
SB 617 Cal-WARN Notice Enhancements. Effective January 1, 2026, SB 617 expands the content requirements for notices issued under California’s Worker Adjustment and Retraining Act (WARN Act). Employers conducting a covered mass layoff, relocation, or termination must now include additional workforce-support information in their WARN notices, including contact information for the employer, information regarding available reemployment services through the local workforce development board, and information about CalFresh benefits. The intent is to better connect affected employees with public assistance and reemployment resources at the time of separation. Employers will need to update WARN notice templates and ensure coordination with local workforce agencies before issuing notices.
AB 692 Certain Stay-or-Pay Contracts Unlawful. AB 692 broadly prohibits employment or work-relationship agreements entered into on or after January 1, 2026, that require a worker to repay money, incur a debt, or suffer a financial penalty if the employment relationship ends. These “stay-or-pay” provisions are declared void as against public policy, subject to limited statutory exceptions (such as certain government loan repayment programs and narrowly defined, compliant bonus or tuition arrangements). This law authorizes enforcement through civil actions, allowing recovery of actual damages or statutory penalties, injunctive relief, and attorneys’ fees. Employers must carefully review training reimbursement, bonus, and repayment provisions to ensure compliance.
SB 642 Pay Equity and Data Reporting. Starting January 1, 2026, SB 642 strengthens California’s pay transparency and equal pay framework by clarifying that a “pay scale” must reflect a good-faith estimate of what the employer reasonably expects to pay for the position at the time of posting. This law also modernizes the Equal Pay Act by removing binary gender language, prohibiting wage disparities based on sex in a broader, inclusive sense, and expanding the definition of wages to encompass more forms of compensation. Additionally, SB 642 extends the statute of limitations for equal pay claims, allowing recovery for a longer period where violations are ongoing. Employers should reassess job postings, compensation structures, and internal pay equity audits.
SB 464 Employee Pay Data Reporting Expanded. Effective January 1, 2026, SB 464 enhances California’s pay data reporting requirements for covered employers by increasing enforcement mechanisms and expanding future reporting detail. This law requires demographic pay data to be maintained separately from personnel files and mandates civil penalties for employers that fail to submit required reports upon request by the Civil Rights Department. Beginning in later reporting years, employers will also be required to categorize employees into a significantly expanded set of job categories (from 10 to 23 using SOC codes starting 2027), allowing for more demographic and compensation analysis. Employers should begin preparing their HR and payroll systems to accommodate expanded data collection and reporting.
AB 406: Further Revisions to Victim Protections. Effective January 1, 2026, AB 406 expands the permissible uses of paid sick leave and protected unpaid leave for employees who are victims of certain crimes or who have covered family members who are victims. Employees may use paid sick leave to attend specified judicial proceedings, including hearings related to bail, sentencing, or post-conviction release. This law also reinforces notice and anti-retaliation protections. Employers must update paid sick leave and leave of absence policies in their handbooks.
SB 648: Labor Commissioner to Enforce Gratuity Law Violations. Effective January 1, 2026, SB 648 grants the California Labor Commissioner explicit authority to investigate and enforce violations involving the unlawful withholding, taking, or misappropriation of employee gratuities. This law authorizes administrative citations and civil actions to recover unpaid tips and impose penalties on employers who improperly retain or distribute gratuities. This law strengthens enforcement of long-standing tip protection laws and underscores the importance of compliant tip-pooling and gratuity distribution practices.
SB 809: Construction Trucking Employer Amnesty Program and Expenses. Effective January 1, 2026, SB 809 clarifies employer obligations related to worker classification and expense reimbursement, particularly in the construction trucking context. This law reaffirms that employers must reimburse employees for reasonable and necessary business expenses under Labor Code section 2802, including expenses associated with the use of an employee-owned vehicle. It also operates alongside Labor Code sections 2750.9 and 2775.5, confirming that industry-specific classification provisions and AB-5-related exemptions do not eliminate an employer’s ongoing duty to properly classify its workers. This law further allows certain employers to resolve prior misclassification exposure through a Labor Commissioner-approved settlement without additional civil penalties, while making clear that full compliance with classification and reimbursement requirements remains mandatory going forward. Employers in affected industries should review vehicle reimbursement policies and classification practices.
JoLynn Scharrer is a shareholder at Hunt Ortmann Palffy Nieves Darling & Mah, Inc. and leads the Firm’s Labor & Employment and Insurance Practice. She can be reached at scharrer@huntortmann.com for further information and assistance.
