Key Changes To California Employment Laws In 2026

While fewer new California employment laws are taking effect in 2026 than in past years, there will still be an impact on California employers. Some of these new laws require adjustments to existing policies and practices for all employers, while others relate to specific industries. Changes to enforcement authorities and procedures are also worth noting.

Below is a summary of new legislation California employers should prepare for in 2026. Unless otherwise noted, all new laws became effective January 1, 2026. A reference guide is also available to download here.

New California Employment Laws Impacting All Employers:

AB 406 – Leave Rights and Protections For Victims of Violence

Enacted on an emergency basis, effective October 1, 2025, and implemented on a staggered basis, AB 406 amended California Labor Code and Government Code provisions to broaden the protections afforded in 2025 under AB 2499 to a "victim" of a "qualifying act of violence." As we previously reported, AB 2499 (effective January 1, 2025) prohibits discrimination and retaliation against employees (and employees with a victimized family member or designated person) for taking leave for a "qualifying act of violence" and required employers to provide written notice of their rights annually, to new hires and when the employer becomes aware that an employee or their family member is a victim. AB 2499 (effective January 1, 2025)

AB 2499 also stipulates that employees who must serve on a jury or appear in court as a witness under subpoena are also protected. Under AB 406, employers must now allow employees to use paid sick leave for these same purposes. Moreover, employers with 25 or more employees must now allow unpaid time-off for a broadened list of covered activities, including delinquency hearings, post-arrest release decisions, pleas, sentencing, post-conviction release decisions or any other proceeding in which a victim's rights are at issue. Employees may also elect to use accrued vacation, personal leave, paid sick leave or compensatory time-off available under employer policy or law.

AB 406 additionally transfers enforcement authority from the Division of Labor Standards Enforcement to the Civil Rights Division relating to discrimination for attending judicial proceedings.

Employers should ensure their handbooks and policies are updated to reflect this broadened protection and post the required notice.

SB 303 – Bias Mitigation Training; Unlawful Discrimination

SB 303 amends the California Fair Employment and Housing Act ("FEHA") to provide that an employee's assessment, testing, admission or acknowledgment of their own personal bias, when made in good faith and solicited or required as part of bias mitigation training, does not constitute unlawful discrimination by itself.

SB 513 – Personnel Records

SB 513 requires personnel records relating to an employee's performance to include education and training records. These records extend to inspection requests under Labor Code Section 1198.5.

SB 642 – Payment of Wages

SB 642 prohibits an employer from paying employees at wage rates less than the rates paid to employees of another sex (instead of the opposite sex) and would extend the time to file a civil action to recover wages to 3 years after the last date the cause of action accrues, rather than 2 years as existed previously. SB 642 would provide that an employee is entitled to obtain relief for up to six years.

SB 477 – California Fair Employment and Housing Act Enforcement Procedures

Under existing law, the statute of limitations for filing a civil action alleging a FEHA employment violation is tolled from the time the complaint is filed with the Civil Rights Department ("CRD") until either the CRD files a civil action or until one year after the CRD issues the complainant written notice that the department has closed its investigation.

SB 477 adds a new tolling period that applies when an employee appeals the CRD's decision to close their complaint. If the CRD affirms its decision to close on appeal, the employee is entitled to one additional year from the date of the appeal decision to file a civil action. Moreover, under existing law, the CRD may issue a right to sue after the department completes its investigation or 1 year after filing, whichever is earlier. For group or class complaints, the CRD is allowed 2 years before issuing such notice. However, SB 477 now requires that if a complaint is related to a director-filed complaint or a group or class complaint, the CRD must delay issuing notice until all administrative proceedings, civil actions, appeals or related proceedings are complete. A director-filed complaint occurs when the Director of the CRD files a complaint on behalf of an individual or group.

SB 477 states that a "group or class complaint" within FEHA includes any complaint alleging a pattern or practice. This specification clarifies existing law.

AB 288 – Expansion of California's Public Employment Relations Board Jurisdiction

AB 288 expands California Public Employment Relations Board's ("PERB") jurisdiction by authorizing an employee to petition PERB to hear unfair labor practices cases where the National Labor Relations Board ("NLRB") is considered to have "ceded" its jurisdiction under the National Labor Relations Act—examples where PERB can assume jurisdiction include NLRB's failure to accept or deny review of a NLRA claim within 6 months or issue a final decision of an accepted case in 12 months, or where a NLRB quorum is lacking.

AB 288 is currently enjoined in federal court from implementation.

Industry–Specific New Laws:

Construction

AB 1002 – Contractors: Failure to Pay Wages, Discipline

ABA 1002 allows the Attorney General to bring civil actions to seek suspension or revocation of a contractor's license for wage theft and other violations, such as failing to pay workers the full wages owed, not fulfilling a wage judgment or violating a court order regarding wage payment. The bill provides the Department of Justice with a new tool to enforce labor laws and hold contractors accountable, in addition to the existing authority of the Contractors State License Board ("CSLB"). Before filing an action, the Attorney General must notify the CSLB, and the board can choose to intervene in the case.

SB 809 – Employees and Independent Contractors: Construction Trucking

SB 809 expands rights afforded to construction truckers and makes it more difficult to establish that the truckers are independent contractors. Said to represent a clarification of existing law, SB 809 provides that a person is not an independent contractor simply because they own the vehicle, personal or commercial, used to provide labor or services, and further provides that the owner-driver is entitled to indemnification for the use of their vehicle under Labor Code section 2802. For owners of construction trucking commercial motor vehicle drivers used for their employment, reimbursement includes the vehicle's use, upkeep and depreciation.

SB 809 also establishes the Construction Trucking Employer Amnesty Program. Administered by the Labor Commissioner and Employment Development Department ("EDD"), an "eligible construction contractor" may be relieved of liability for statutory or civil penalties associated with the misclassification of construction drivers as independent contractors. An "eligible construction contractor" is a construction contractor that does not have a state or federal civil lawsuit filed against it on or before December 31, 2025, involving construction driver misclassification claims, nor a final penalty assessed by the EDD pursuant to Unemployment Insurance Code section 1128 (violations based on fraud or an intent to evade compliance).

Amnesty applies if an eligible construction contractor executes a settlement agreement negotiated with, or approved by, the Labor Commissioner before January 1, 2029, that includes, among other terms, the contractor's agreement to reclassify as employees all of its construction drivers, and pay all wages, benefits, and taxes owed, if any. If a construction driver declines to accept the settlement agreement, but the eligible construction contractor still reclassifies the driver as an employee, this new law limits the driver's right to pursue a claim for civil or statutory penalties.

Public Works

AB 538 – Public Works Payroll Records

Existing California law requires contractors or subcontractors on public works projects to keep accurate payroll records, including the name, address, social security number, work classification and hours worked each day and week for each employee. Existing law also requires certified copies of these records to be made available upon request by the public. The public can request such records through the awarding body or Division of Labor Standards Enforcement ("DLSE").

AB 538 requires that if a request is made by the public through the awarding body and the awarding body is unable to access these records, the awarding body must obtain the records from the relevant contractor. Additionally, AB 538 allows the DLSE to enforce certain penalties if the contractor fails to comply with the awarding body's request for such records within 10 days of notice.

AB 889 – Prevailing Wage: Per Diem Wages

AB 889 clarifies and strengthens the state's prevailing wage laws, particularly concerning how employer fringe benefit contributions are calculated for public works projects. It aims to ensure that contractors do not overvalue their fringe payments to pay less than the prevailing wage, promotes fairness for workers and removes certain exceptions to the annualization process for calculating these benefits.

AB 889 requires the credit for employer payments (fringe benefits not paid directly as wages) to be computed on an annualized basis whenever the employer claims a higher contribution rate on public works than on its private construction. The bill removes the prior exception that allowed the Director of the Department of Industrial Relations to waive annualization when it was deemed not to serve the purposes of the law, and it revokes any such exemptions issued before January 1, 2026.

Under AB 889, employers bear the burden of establishing with adequate records that the credit for employer payments was calculated properly. The failure to produce payment records is expressly stated to be a basis on which the Labor Commissioner may deny the employer credit for the payments.

Hospitality

SB 648 – Gratuities, Enforcement

SB 648 expands the California Labor Commissioner's authority to enforce gratuity laws by allowing the Commissioner to investigate, issue citations or file civil actions against employers who unlawfully withhold tips from employees. This new law requires employers to maintain accurate gratuity records, pay credit card tips in full to employees on the next payday and prohibits any portion of tips from being used to supplement wages.

Agricultural

AB 845 – Agricultural Employee Complaints

AB 845 requires state agencies, including the Agricultural Labor Relations Board and the Division of Industrial Relations, Division of Labor Standards Enforcement and Division of Occupational Safety and Health, to collaborate on agricultural employee complaints, ensuring they are routed to the correct agency for investigation. AB 845 also protects a complainant's identity by prohibiting the disclosure of their personal information without consent. AB 845's goal is to improve the process for agricultural workers to report labor issues and ensure their confidentiality.

AB 1362 – Foreign Labor Contractor Registration for Agricultural Workers

Existing law requires the California Labor Commissioner to enforce and administer a program to register and supervise foreign labor contractors. Foreign workers are defined under existing law as any individual who seeks employment who is not a United States citizen or permanent resident but is authorized by the federal government to work in the United States, including those who work as temporary nonagricultural labor. Under existing law, those who were foreign farm labor contractors (those on H-2A visas) were exempt.

Effective July 1, 2027, AB 1362 will expand the California Labor Commissioner's existing foreign labor contractors program to those who are foreign farm labor contractors under the H-2A visa program. Additionally, AB 1362 will require foreign farm labor contractors to register with the Labor Commissioner as other foreign labor contractors did under existing law. Any violation may result in a civil penalty of no less than $1,000 and no more than $25,000 per violation, in addition to any other civil remedies available to the Labor Commissioner or any aggrieved person. The Labor Commissioner or aggrieved person may bring an action for injunctive relief and damages.

Transportation

AB 1340 – Transportation Network Company Driver Labor Relations

AB 1340 effectively gives app-based drivers for rideshare companies, who are considered independent contractors, rights much like unionized employees. Specifically, rideshare companies, defined as transportation network companies ("TNC"), must allow their app-based drivers to join and participate in TNC driver organizations, bargain through representatives of their own choosing, engage in activities for the purpose of bargaining and refrain from interfering with such activities.

Effective January 1, 2026, AB 1340 will require that each TNC submit detailed information to the Public Employment Relations Board ("PERB"), including specific information about each driver and total rides performed quarterly. Additionally, AB 1340 makes it an unfair labor practice for a TNC or its agent, or multicompany committee, to fail or refuse to provide PERB with the required information, fail or refuse to negotiate in good faith with a TNC driver organizations, interfere with the TNC driver organizations, or prevent TNC drivers from joining such organizations.

Petroleum Factory

AB 751 – Rest Periods for Safety-Sensitive Positions in Petroleum Factories Rest Periods: Petroleum Facilities: Safety-Sensitive Positions

AB 751 exempts safety-sensitive positions from rest period requirements at refineries and extends this existing exemption at petroleum facilities indefinitely.

Private Security

SB 652 – Private Security Guard Training

SB 652 mandates that security guard applicants complete a single course for both power to arrest and appropriate use of force training within six months of their application submission to the Bureau of Security and Investigative Services (BSIS). Private patrol operator (PPO) licensees are only authorized to provide this specific training to their own applicants and employees, and the training statement must confirm the six-month completion window.

AI Frontier Developers

SB 53 – Transparency in Frontier Artificial Intelligence Act (TFAIA) and Large Language Model Developers

SB 53 enacts the Transparency in Frontier Artificial Intelligence Act (TFAIA), which is the country's first law regulating frontier AI systems with reporting and governance requirements. Governor Gavin Newsom has stated SB 53's intention is to establish regulations to protect California communities while also ensuring the AI industry can continue to thrive. Newsom aimed to strike a balance between California's ever-growing AI landscape and positioning the state as a national leader on frontier AI safety legislation.

SB 53 would require every large frontier developer to publish safety and security frameworks. A frontier developer is any person or entity that has trained or will train a frontier model. A frontier model is defined as a foundational model trained on a quantity of computing power greater than 10^26 integer or floating-point operations (FLOPs), including whatever computer power is used in subsequent finetuning, reinforcement learning or other material modifications. Additionally, to meet the requirements of a large frontier developer, its annual revenue must exceed $500,000 in the preceding calendar year. Ultimately, SB 53 targets the AI industry's largest companies, including OpenAI, Anthropic and Google.

Large frontier developers must now publish a general safety framework that illustrates how the developer has incorporated national and internal standards, industry best practices, and assessments on whether the frontier model has capabilities to pose catastrophic risk. The framework must also include how the developer would mitigate these potential risks and the effectiveness of these mitigation measures. Moreover, TFAIA requires that when a frontier developer releases a new or substantially changed model, the frontier developer must publish a transparency report. This report must include the model's release date, intended uses, restrictions and risk assessments.

Lastly, under TFAIA, all AI developers must now notify the Governor's Office of Emergency Services (OES) of any critical safety incident. A critical safety incident is defined as a model behavior that could result in death or serious injury to 50 or more people, greater than $1 billion in damages, provide assistance in releasing a chemical, biological, radiological or nuclear weapon, commit major crimes or cyberattacks, or evade control by developers and users. The developer must report the incident within 15 days of discovery, but incidents that pose an imminent risk of death or serious injury must be disclosed within 24 hours.

Civil penalties for noncompliance can be up to $1 million per violation. Critically, SB 43 protects whistleblowers who raise concerns about catastrophic risks or violations. The bill includes anti-retaliation measures, anonymous employee reporting and provides employees the ability to seek injunctive relief in court. As a result, employers will need to provide anonymous channels for reporting.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.