2026 CA Compliance Checklist

Important CA Employment Law Updates - What’s New For 2026

As we enter 2026, California employers are facing significant updates in employment law that affect wages, job postings, pay transparency, artificial intelligence in hiring, employee notices, and expanded leave protections. Staying ahead of these changes is critical to compliance, reducing legal risk, and maintaining a strong workplace culture.

Below are the key employment law changes for 2026 and what employers should prioritize.

Wage & Hour Updates

California Minimum Wage Increase

Effective January 1, 2026, California’s minimum wage increases to $16.90 per hour for all employers, regardless of size.

Exempt Employee Salary Thresholds

The minimum wage increase also changes the salary basis for exempt employees. To qualify as exempt, employees must satisfy both the duties test and one of the following pay thresholds:

• Administrative, Professional, Executive: $70,304 per year
• Computer Professionals: $122,573.13 per year
• Licensed Physicians & Surgeons: $107.17 per hour

Employers must review exempt classifications carefully to avoid misclassification risk.

Local Minimum Wage Increases

Many California cities will increase local minimum wages as of January 1, 2026. Notable examples include:

• Mountain View: $19.70/hour
• Sunnyvale: $19.50/hour
• Palo Alto: $18.70/hour

Local wage laws vary widely and change frequently. Employers should confirm applicable rates for every location where employees work.

Job Posting & Pay Transparency Requirements

Pay Equity Enforcement Act (SB 642)

Under the Pay Equity Enforcement Act (SB 642), effective January 1, 2026, employers with 15 or more employees must include a pay scale (salary or hourly wage range) in all job postings for positions that may be filled in California.

Key requirements include:

• The pay scale must be a good-faith estimate of the range the employer reasonably expects to pay at the time of hire, not a placeholder or aspirational range.
• This requirement applies to internal and external job postings and includes remote roles that could be filled by workers residing in California.
• Employees must also be able to request and receive pay scale information for positions they are interested in or currently hold, where required by law.

Action Step: Review and update all job posting templates, recruiting platforms, internal transfer postings, and applicant communications to include required pay scale information.

Pay Data Reporting & Record Keeping

Pay Data & Demographic Information (SB 464)

Employers with 100 or more employees must continue to report pay data, but demographic information used for pay reporting must be stored separately from personnel files to protect employee privacy. Employers should audit their data storage practices and ensure compliance with storage and security requirements.

Artificial Intelligence & Bias Mitigation

Automated Decision Systems Under FEHA

California’s FEHA now explicitly covers automated decision systems (ADS) used in employment processes. Any tool (including AI models) used for hiring, promotion, training, or evaluation that results in discriminatory outcomes will be treated as unlawful discrimination.

Employers should:

• Inventory AI and automated tools in use
• Conduct or obtain bias testing
• Document findings and actions for four years
• Ensure meaningful human oversight of employment decisions

Bias Mitigation Training Protections (SB 303)

SB 303 protects employees who participate in employer-provided bias mitigation training. An employee’s good-faith acknowledgment of personal bias during training:

• Cannot be used as evidence of discrimination
• Cannot be used as a basis for retaliation

This law is designed to encourage honest participation in bias education programs.

Workplace Notices & Personnel Records

Workplace Know Your Rights Act (SB 294)

All employers must provide a stand-alone written notice of employee rights:

• At the time of hire
• Annually to all employees

Model notices and educational materials were expected by January 1, 2026, and employers must distribute initial notices by February 1, 2026. 

Action Step: Establish a system for distribution, tracking, and employee acknowledgment.

For more information, check out the Know Your Rights Act.

Expanded Personnel File Access (SB 513)

Personnel files now explicitly include education and training records, if maintained. Employers must provide access within 30 days of an employee’s request and maintain confidential records (e.g., medical files) separately. Conducting a personnel file audit can help ensure compliance.

Expanded Leave Rights & Employee Protections

Crime Victim Leave & Safety Accommodations (AB 406)

AB 406 expands protections for employees and their family members, including designated persons, who are victims of qualifying acts of violence.

All employers must:

• Provide written notice of rights upon hire and annually
• Prohibit retaliation for requesting leave or reasonable accommodations

Employers with 25 or more employees must provide protected leave for:

• Medical or mental health care
• Legal proceedings
• Safety planning or relocation
• Childcare arrangements
• Dependent care transitions

Paid sick leave may also be used for jury service and crime-related court proceedings where eligibility is met.

Paid Family Leave - Designated Person Expansion (SB 590)

California Paid Family Leave now allows employees to take leave to care for a designated person, defined as someone related by blood or whose relationship is equivalent to family. Employees may designate one person per 12-month period. Employers should update leave request forms and HR processes accordingly.

Independent Contractors & Training Repayment Restrictions

ABC Test Exemptions Extended (AB 1514)

AB 1514 extends certain exemptions from the ABC test, including for:

• Licensed manicurists (through January 1, 2029)
• Commercial fishers (through January 1, 2031)

Employers should review contractor classifications ahead of other exemption expirations and reassess compliance.

Contracts In Restraint Of Trade (AB 692)

AB 692 prohibits employers from requiring employees to repay training, onboarding, tuition, or work-related education costs as a condition of employment or separation. Any training benefit must be voluntary and cannot include a repayment clause.

Retirement Plan Reminder

CalSavers Registration Deadline

Employers with 1–4 employees must complete their CalSavers Retirement Savings Program registration by December 31, 2025, unless they sponsor a qualifying retirement plan. Employers with existing plans should maintain documentation to support their exemption.

Key Action Steps For Employers

Staying on top of these legal updates is crucial for maintaining a compliant, productive workplace. We strongly recommend reviewing your policies, pay practices, and training programs to ensure you’re ready for these changes. 

To prepare for these key 2026 employment law changes, employers should:

• Audit pay practices, job postings, and exempt classifications
• Update job posting templates to include required pay scales
• Review AI and automated employment tools
• Revise leave policies and required notices
• Conduct personnel file and data storage audits

For additional details, please refer to this report provided by The Mitzel Group.

If you have any questions about how these laws may affect your business, feel free to reach out to Premier Talent Partners or consult with trusted legal counsel like The Mitzel Group.

Disclaimer: This blog post is intended for general informational purposes only and does not constitute legal advice. Always consult with an attorney for guidance specific to your situation.