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2026 California Employment Law Update

October 21, 2025
Governor Newsom signed several new California employment laws following the 2025 session’s close.
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At a Glance

The California legislative session ended October 13, 2025, and Governor Gavin Newsom signed several employment-related bills into law, each with various effective dates:

Effective

Bill           Updates

10/1/2025

AB-406Paid Sick and Safe Leave Expansion: Employees can use leave if they or a family member is a victim of certain crimes and is attending related judicial proceedings.
1/1/2026SB-642

Equal Pay Act Amendments

  • Job postings must include the actual expected pay range for new hires, instead of the range the employer might have previously provided for the same position.
  • The definition of wages is expanded to include all compensation forms, including benefits (e.g., life insurance, vacation/holiday pay, stock options, and bonuses).
  • The statutes of limitations for wage recovery is extended to three years after the last discriminatory pay act occurred.
  • Broader protections against sex-based wage discrimination.
SB-464

Employer Pay Data Retention and Reporting Amendments

  • Pursuant to Government Code 12999, employers and labor contractors must collect and store the demographic information gathered to file the annual pay data report separately from employees’ personnel records.
  • Starting 1/1/2027, the number of job categories included on the pay data report will increase to 23, thus diverging from prior EEO-1 standards.
SB-648Illegally Withheld Gratuities Enforcement Provisions: The California Labor Commissioner can investigate and issue citations or file civil action for gratuities taken or withheld in violation of Labor Code Section 351. Penalties include $100 for each initial violation, $250 for each subsequent violation, plus wages and liquidated damages.
SB-617

Updated California Worker Adjustment Retraining Act (WARN) Notice Requirements: Employers at a covered location ordering a mass layoff, relocation, or termination must notify the employees, the Employment Development Department, and other local agencies. Notices must include:

  • Whether the employer plans to coordinate services through the local workforce development board or another entity
  • Information regarding the CalFresh statewide food assistance program
2/1/2026SB-294Workplace Know Your Rights Act: Employers must provide a standalone written notice of worker rights to each new employee when hired, and annually to all current employees. The Labor Commissioner will provide a template notice.
7/1/2026AB-774Creditor Garnishment Employee Notification Requirement: Employers that receive a notice of judgment from a creditor must respond to the notice and provide the employee with a copy of the earnings withholding order and related notice.
10/1/2025-1/1/2027AB-858Rehiring and Retention Extension: Employers in the airport, building services, events, and certain hospitality industries must rehire and retain employees laid off on or after March 4, 2020, due to COVID-19.
7/1/2028SB-590Paid Family Leave Expansion: Expands eligibility for paid family leave program benefits to include individuals who take time off work to care for a seriously ill “designated person,” defined as any individual related by blood or whose association with the employee is the equivalent of a family relationship.

 

Next Steps

Employers should review their handbooks and employment policies to make necessary updates by the applicable effective dates.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.

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Between constantly changing employment laws and updates to the Affordable Care Act (ACA), keeping your workplace compliant can be a time-consuming and costly challenge. Eliminate the stress and stay up to date with our Compliance Dashboard. View compliance alerts and get a bird’s eye view of what you need to do to avoid fines and penalties.

 

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