California Employment Laws & Regulations

As California employment laws continue to evolve, employers should review several important updates affecting workplace compliance.

The Workplace Know Your Rights Act (SB 294) requires California employers to provide employees with an annual written notice outlining important workplace rights, including constitutional protections, labor rights, and information regarding interactions with law enforcement in the workplace. Employers must also provide this notice to new hires upon employment.

Source: California Department of Industrial Relations – Workplace Know Your Rights Act and California Legislative Information (SB 294).

SB 294 also requires employers to provide employees with the opportunity to designate an emergency contact who may be notified if the employee is arrested or detained while at work, provided the employee has requested such notification.

Source: California Department of Industrial Relations – Workplace Know Your Rights Act and California Legislative Information (SB 294).

Assembly Bill 692 limits the use of "stay or pay" agreements that require employees to reimburse employers for certain training, relocation, or similar costs if they leave employment within a specified period. Employers should review existing employment agreements and reimbursement policies to ensure compliance with the new law.

Source: California Civil Rights Department – 2025 Legislative Update (AB 692).

Senate Bill 513 expands employers' record-keeping responsibilities by requiring the retention of additional employment-related records, including certain personnel documents, training records, and employee grievances. Employers should review their document retention policies to ensure compliance.

Source: California Legislative Information (SB 513) and California labor law guidance regarding personnel record retention.

Wage and Hour Regulations Update
New California and Federal wage and hour laws effective January 1, 2026, introduce significant changes for employers regarding minimum wage, exemptions, and penalties.

• Minimum wage increases: Most employers - $16.90/hour; Fast food workers - $20.00/hour; Healthcare workers - $18.63 to $24.00/hour.
• Exempt employees must meet specific salary and duties tests; California's requirements are generally more favorable than Federal.
• Annual salary requirements for exempt employees: Most - $70,304; Fast food - $83,200; Healthcare - $77,500.80 to $99,840.
• New penalties for employers with unsatisfied judgments for unpaid wages can reach up to 3x the outstanding judgment amount if not paid within 180 days.

• Employers with 100+ employees must submit annual payroll reports by the second Wednesday in May.
• Starting January 1, 2027, employers must report employee demographics in 23 job categories, up from 10.
• Noncompliance penalties include mandatory civil penalties and court orders for compliance.

• Employers not paying judgments within 30 days can face business operation prohibitions.
• Civil penalties for unpaid judgments can be up to 3x the amount owed if not paid within 180 days.

• Meal period waivers must be mutually agreed upon and can be enforced prospectively.
• Employers must provide clear information about meal period rights and ensure waivers are voluntarily executed. ​

• Employers must provide a notice detailing employee rights by February 1, 2026, and annually thereafter. ​
• The notice must cover rights related to workers' compensation, immigration inspections, and union organization.

• Employees can now request access to their education and training records, which must include specific details about training received. ​
• Employers must comply with requests for personnel files within 30 days.

• Employees who engage in whistleblowing are protected from retaliation, and employers must demonstrate legitimate reasons for adverse actions. ​
• The same-decision defense can prevent employees from recovering attorneys' fees if no relief is granted.

• The new form must be used until a newer version is released, expected in 2027.
• Employers must ensure compliance with the requirements for completing and maintaining Form I-9 records. ​

• AB 316 states that reliance on AI cannot be used as a legal defense for causing harm.
• Employers must clearly describe and enforce policies regarding acceptable AI use.
• The California Civil Rights Council's regulations on Automated Decision Systems (ADS) will take effect on 10/1/25. ​
• Employers with 5+ employees cannot use ADS that discriminates based on protected characteristics. ​
• Employers must maintain employment records for 4 years, including all applications and ADS data. ​

• AB 406 expands protected paid sick leave and unpaid safe time for employees starting 10/1/25. ​
• Employees can take up to 5 days of paid sick leave for health conditions or as victims of violence. ​
• New reasons for taking leave include attending judicial proceedings related to crimes.
• Employers must provide written notice of leave rights at hire and annually. ​
• The definition of "victim" includes individuals affected by serious felonies and violent crimes. ​

• Hirdman v. Charter Communications clarifies that paid sick leave for outside salespeople must be calculated similarly to other paid leave. ​
• Exempt employees' sick leave is calculated based on how other paid leave is computed. ​
• Employers must audit their paid sick leave payments to ensure compliance with legal standards. ​

• SB 590 expands eligibility to include leave for a seriously ill designated person starting 1/1/28. ​
• Employees must attest to the relationship with the designated person under penalty of perjury. ​

• Velarde v. Monroe Operations highlights the need for proper presentation of arbitration agreements.
• Employers must ensure agreements are not unconscionable and are presented in a clear manner.
• The court found procedural unconscionability due to pressure and misrepresentation by the employer.

• AB 858 extends recall rights for laid-off employees in the hospitality industry until 1/1/27.
• Covered enterprises include hotels, event centers, and airport service providers. ​
• Laid-off employees are presumed to have been separated due to COVID-19-related reasons unless proven otherwise. ​

• Employers should continuously audit wage and hour compliance throughout the year. ​
• Timecards must accurately reflect work hours and include certification language. ​
• Employers must ensure meal and rest periods are compliant with legal requirements.
• Policies should be reviewed annually to ensure they are non-discriminatory and compliant with current laws. ​

• Employers must train employees on harassment, discrimination, and retaliation every two years.
• Training should also cover compliance with workplace safety and leave rights. ​
• Regular reinforcement of policies is necessary to ensure understanding and compliance among employees. ​

• Employers with 1+ employees must provide access to the CalSavers Retirement Savings Program if they do not offer a qualified plan. ​
• Employees can opt out of the program at any time, and employers facilitate contributions through payroll deductions.

• Employers must ensure that independent contractors meet the criteria for classification under the ABC Test or Borello Factors. ​
• All independent contractor relationships must have a written contract defining the terms of the relationship. ​

• Employers must ensure all workplace posters are current and compliant with state and federal regulations.
• Annual notices regarding employee rights and protections must be provided to all employees.