Yesterday, the annual legislative cycle concluded as California Governor Gavin Newsom signed or vetoed the last legislative bills sent to him. The Governor acted on hundreds of bills spanning a wide range of issues. For example, California now has a new state snake and shrub. As great as the Giant Garter Snake and the Big Berry Manzanita are, however, many new labor- and employment-related laws are taking effect next year — and employers will want to be familiar with them.
These incoming new laws touch on several different employment-related topics, including discrimination, leaves of absence, notice and recordkeeping requirements, collective bargaining, and more. Here’s a quick look at what’s ahead in 2026. Unless noted otherwise, these new laws take effect January 1, 2026.
Discrimination, Harassment and Retaliation
SB 642 makes changes to California’s pay scale disclosure requirements and the California Equal Pay Act. Under existing law, employers must provide pay scale information to applicants and employees when requested, and employers with 15 or more employees must post pay scale information in job postings. SB 642 revises the definition of “pay scale” for these purposes to mean a “good faith estimate” of the salary or hourly wage range the employer reasonable expects to pay “upon hire.”
The Equal Pay Act generally prohibits employers from paying employees an amount less than employees of a different gender, race or ethnicity for substantially similar work. SB 642 increases the statute of limitations on Equal Pay Act claims from two years to three and clarifies when a cause of action occurs under the law. Notably, the law will also allow recovery under the Equal Pay Act to reach back as far as six years.
Additionally, California’s pay data reporting requirements will undergo some revisions. SB 464 requires demographic information collected by an employer or labor contractor for pay data reporting purposes to be stored separately from employees’ personnel records and, beginning January 1, 2027, increases the number of job categories in the report from 10 to 23.
Governor Newsom also signed SB 303, a bill related to bias mitigation training. The bill adds new provisions to the Fair Employment and Housing Act (FEHA) stating that an employee’s assessment, testing, admission or acknowledgment of their own personal bias — made in good faith or as part of a bias mitigation training — does not constitute unlawful discrimination. Lawmakers introduced this bill to address concerns that bias-related training information could be misused in discrimination claims against employees or employers.
Leaves of Absence
AB 406 is a follow-up bill to last year’s AB 2499, which expanded and revised California’s leave for victims of violence and moved several victim’s leave provisions from the Labor Code to the FEHA in the Government Code, giving the California Civil Rights Department (CRD) enforcement jurisdiction.
AB 406 continues this transition by moving the remaining victims’ leave provisions from Labor Code sections 230.2 and 230.5 to the FEHA so all the victims’ leave provisions are in one place, making leave administration and enforcement more consistent. AB 406 also made related changes to California’s paid sick leave law (PSL) in Labor Code section 246.5, revising the list of reasons for which employees may use PSL to align with the revised codes. AB 406 had an urgency clause, so it took effect when it was signed on October 1, 2025.
Given these changes, the CRD will likely soon update its model notice, Survivors of Violence and Family Members of Victims Right to Leave and Accommodations. Employers should be on the lookout for the updated notice.
While not a protected leave of absence itself, California’s Paid Family Leave program (PFL), the state-sponsored insurance program within the State Disability Insurance program, is being expanded. SB 590 expands eligibility for benefits to include individuals who take time off work to care for a seriously ill designated person, which the law defines as “any care recipient related by blood or whose association with the individual is the equivalent of a family relationship.” This change doesn’t take effect until July 1, 2028.
Employment Contracts
AB 692 affects certain benefits like hiring bonuses or tuition-assistance payment programs that employers sometimes offer to incentivize and retain employees by requiring a worker to pay back the employer if employment ends before a specified term. AB 692 limits employers’ ability to offer these types of benefits; it will be unlawful to include in any contract entered on or after January 1, 2026, provisions requiring a worker to pay an employer, training provider or debt collector for a debt if the worker’s employment relationship is terminated. Some limited exceptions apply to contracts that meet specific criteria.
Notice and Recordkeeping
SB 294, the Workplace Know Your Rights Act, requires employers to distribute a new annual notice to their employees with information about various topics including workers’ compensation, immigration protections, the right to engage in concerted activity and constitutional rights when interacting with law enforcement. SB 294 directs the California Labor Commissioner to create a template notice by January 1, 2026, that employers may use to comply with this requirement. Employers have until February 1, 2026, to provide it to their employees, and it must be provided annually thereafter. Employers must also provide this notice to new hires.
Important for employers’ recordkeeping practices, SB 294 requires employers to keep compliance records for three years, including the date that each written notice is provided or sent.
SB 617 expands on the information required to be included in California Worker Adjustment and Retraining Act (CalWARN) notices. In addition to the existing notice content, SB 617 requires employers to include whether the employer plans to coordinate services through the local workforce development board as well as information about their local workforce development and California’s food assistance program known as CalFresh.
Lastly, regarding personnel records, SB 513 makes minor revisions to existing law, requiring employers’ education and training records to include specific information, which will require employers to review and adjust their recordkeeping practices.
Collective Bargaining
In 2020, California voters approved Proposition 22, which classified certain app-based drivers as independent contractors. With the signing of AB 1340, those drivers will gain unionization rights starting in 2026. Specifically, AB 1340, the Transportation Network Company Drivers Labor Relations Act, provides that covered drivers have the right to form, join and participate in driver organizations, bargain through representatives of their own choosing and engage in concerted activities for the purpose of bargaining or other mutual aid or protection. The California Public Employment Relations Board (PERB), a state agency responsible for overseeing government employer/employee labor relations, will enforce the law.
AB 288 is another significant collective bargaining bill signed. The bill substantially expands PERB’s jurisdiction to enforce labor laws with respect to private-sector employees, who are generally covered by the federal National Labor Relations Act (NLRA), enforced by the National Labor Relations Board (NLRB). Under AB 288, PERB will be able to hear unfair practice charges, conduct union elections, certify bargaining representatives and order certain remedies, among other things.
Notably, the NLRB has filed a legal challenge against a similar New York law on the grounds that the law is preempted by the NLRA. It’s possible AB 288 may also face similar legal challenges.
James W. Ward, J.D., Employment Law Subject Matter Expert/Legal Writer and Editor, CalChamber
CalChamber employment law experts will cover the new employment laws for 2026 in more detail in the October issue of our HRCalifornia Extra newsletter (subscribe to HRCalifornia Extra) and in our annual new laws whitepaper (coming in November). Not a member? See how CalChamber can help you.
