In with the old, out with the new. 2026 ushers in a new set of laws with stricter workplace requirements and regulations affecting employers. Here’s what employers and employees should know about the new changes in employment law, effective 2026.

Updated California Employment Laws For 2026 

1. Bye Bye “Stay or Pay”

• Employers are prohibited from including provisions in their employment contracts, or as a condition of employment, any contract stipulating an obligation to repay fees or debts to the training provider, employer, or debt collector after completion of employment. Legitimate costs such as tuition for transferable credentials, government loan forgiveness programs, and approved apprenticeships may still be recouped, but only under specific standards. 

The law ensures that workers may leave employment without the fear of debt, enhancing labor mobility and increasing control of employees over their career path.

2. More Pay Transparency & Equity

• Effective January 1, 2026, Employers with 15 or more employees must include a “good faith estimate” of wages or salary clearly illustrating what the employer will pay a new hire. This means they cannot merely post a pay range. 
• Terminology for equal pay protections is also expanded by replacing “opposite sex” to employees of “another sex”
• The statute of limitations for equal pay claims is now three years and employees can recover for pay violations from up to six years back

This means employers should audit their pay scales, job postings, and internal compensation policies to comply with the new requirements.

3. “Designated Persons” Expanded

• Employees are now able to receive state Paid Family Leave (PFL) benefits for taking time off work to care for a seriously ill “designated person.” This includes any individual equivalent of a family relationship
• The employee can identify the designated person when they file a claim for PFL

This law offers expanded leave eligibility so that employees can now take time off to care for extended family, chosen family, and close friends.

4. More Worker Notice & Rights

• Employers must provide a stand-alone written notice to all employees of key labor protections.
• This includes rights to interactions with law enforcement and workers’ compensation
• Employers have a deadline of March 30, 2026 to allow employees to designate an emergency contact in case of arrest or detainment

This ensures that employees are in full knowledge of their legal protections and rights.

5. “Personnel Records” Defined More Broadly

• “Education or training records” are now included under “Personnel Records”
• Existing rules for copying and inspection still apply

Workers, particularly skilled-labor workers, are able to earn job-specific certifications and training on the job rather than taking time apart towards formal education.

6. Stricter Pay Data Reporting 

• Employers who already report pay data are required to store demographic data separately from their normal personnel files. 
• If the Civil Rights Department requests a pay data report and the employer fails to file, a mandatory civil penalty may now be imposed.
• Employers are now required to identify the numbers of employees by ethnicity, race, and sex in 23 categories compared to the previous requirement of 10.

This ensures a more compartmentalized and secure record-keeping process and a more specific picture of pay equity.

7. Additional Information Now Required For CalWARN Notices

• Employers must now include in the CalWARN notice whether they plan to coordinate services through the local workforce development board or another specific entity. This includes information regarding the CalFresh program.

This law focuses on increasing worker welfare.

8. Stricter Wage Judgement Enforcement

• Employers who fail to pay a wage judgement within 180 days now face stricter penalties, including penalties up to three times the judgement amount, and payment of mandatory court costs and attorney fees.

This bill incentivizes the efficient resolution of back-pay issues.

9. Workplace Training Protections

• Bias training is now protected
• California Fair Employment and Housing Act is amended to provide specified harassment prevent training
• If an employee acknowledges or admits personal bias during bias mitigating training or bias training, this alone does not constitute unlawful discrimination.

This law ensures that participation in bias mitigation efforts will not automatically turn into a liability.

Work With A California Employment Lawyer 

If you’re a California business owner, these legal changes mean you need to immediately update your existing practices, policies, and procedures. If you’re an employee, you should know your rights. Call The Law Office of Ball & Yorke to consult with an experienced California employment law attorney today.