A series of new California employment statutes and regulatory adjustments take effect on January 1, 2026, expanding employer obligations in wage standards, employee notices, employment agreements, and workforce-reduction procedures.
The measures stem from legislation enacted during the 2025 legislative session as well as previously adopted statutes with inflation-indexed thresholds and delayed implementation timelines. For employers, the cumulative effect increases compliance requirements across payroll administration, workforce documentation, and litigation risk management. Key laws that take effect in 2026 include:
Minimum wage increase
California’s statewide minimum wage increased to $16.90 per hour beginning January 1 under the state’s automatic inflation-adjustment framework. The increase applies to employers of all sizes and raises the minimum salary threshold for most exempt employees to $70,304 annually, reflecting the requirement that exempt salaries equal at least twice the minimum wage for full-time work.
Workplace Rights Notice Requirement
New employee notice obligations took effect under SB 294 (California Workplace Know Your Rights Act), which requires employers to provide workers with a stand-alone annual notice summarizing workplace rights.
The notice must explain protections related to workers’ compensation coverage, immigration-related workplace protections, the right to organize and participate in union activity, and constitutional rights during interactions with law enforcement in the workplace.
Restrictions on “Stay-or-Pay” Agreements
AB 692 (California stay‑or‑pay employment contract restrictions) restricts the use of employment agreements that require workers to repay training costs, hiring bonuses, or other expenses if they leave a job before a specified period.
The law generally prohibits such “stay-or-pay” provisions except in limited circumstances involving bona fide educational programs or training primarily benefiting the employee.
Collective Bargaining Framework for Rideshare Drivers
Under AB 1340 (transportation network company driver collective bargaining framework), certain rideshare drivers working for transportation network companies may organize and engage in collective bargaining under a state-established process. The statute creates procedures for representation and negotiations between driver organizations and platform companies.
Expanded Training Recordkeeping
SB 513 (workplace training documentation requirements) requires employers to retain detailed documentation for workplace training programs.
Employers must maintain records identifying the training provider, dates and duration of instruction, and participating employees for programs required under state law or company policy.
Expanded Layoff Notice Requirements
Changes to California’s Worker Adjustment and Retraining Notification (WARN) framework took effect under SB 617 (California WARN notice information expansion), which requires employers issuing layoff notices to include additional information about workforce assistance programs.
The notices must reference coordination with local workforce development boards and provide information on public benefits such as CalFresh that may be available to affected workers.
Compliance Implications
Taken together, the 2026 employment law changes continue California’s expansion of workplace regulation across wage policy, labor rights, employment contracts, and workforce-reduction procedures.
For employers operating in the state, the new requirements will require updates to employee notices, employment agreements, training documentation systems, and layoff-notification practices as companies adapt to the evolving regulatory framework governing California workplaces.