Question: Is it true that a lot of new laws were passed that will affect employers? What are the new laws, and when will they go into effect?
Answer: Yes. Beginning January 1, California employers will face a number of significant legal updates affecting wage and hour rules, hiring practices, leaves of absence, workplace safety, and more. Below is a summary of key legislative and regulatory changes that require immediate attention and potential policy revisions.
Paid Sick Leave
An employee may now take paid sick leave when they are a victim or a family member of a victim of a crime and require time off from work to attend judicial proceedings related to that crime, or to seek treatment or services related to the qualifying act of violence. Employees may also use paid sick leave when they are summoned for jury duty.
Discrimination, Harassment, and Retaliation
The Equal Pay Act prohibits employers from paying employees less than other employees because of gender, race, or ethnicity for the same work. The statute of limitations for the Equal Pay Act increased from two to three years from the last date the cause of action occurred and allows recovery to reach back as far as six (6) years.
Minimum Wage Increase
California’s minimum wage will increase to $16.90. The hourly increase also affects the annual salary of exempt employees, which will increase to $70,304. Employers should keep in mind that the minimum wage is different for some employees and employers should check if their city or county raised their local minimum wage.
New Annual Notice
Employers must distribute a new annual notice to their employees about several topics including: workers’ compensation; immigration protections, the right to engage in concerted activity and constitutional rights when interacting with law enforcement by February 1, 2026. Employers can find the template notice on the Labor Commissioner’s website in January 2026. Employers must keep record of their compliance with this notice requirement for three years.
Record Keeping
Employers must notify an employee’s designated emergency contact if the employee is arrested or detained on their worksite. An employer is only obligated to notify if the employee has designated an emergency contact specifically for this purpose and the employer has actual knowledge of the arrest. Employees should choose an emergency contact specifically for this purpose by March 30, 2026, or at the time of hire.
Employment Contracts
With limited exceptions, it will be illegal to include in an employment contract a term that requires the employee to repay a debt if the employee’s employment ends.
Wage and Hour Enforcement
California employers that fail to pay a final wage judgment within 180 days after the time to appeal expires may face a civil penalty up to three times the outstanding judgment, post-judgment interest, and be responsible for attorneys’ fees and costs in an action to enforce the judgment. Additionally, the Labor Commissioner may now investigate and issue a citation or file a civil action for gratuities taken in violation of Labor Code section 351, which prohibits employers from taking gratuities from employees or crediting the gratuities against the employee’s wages.
Employers are encouraged to conduct internal audits of their wage practices, employee classifications, handbook policies, and posting compliance to reduce risk. Employers with questions about these laws should contact their labor counsel.