Question: I run a small business on the Monterey Peninsula. Each year, I am surprised to lean about a new employment law. Are there any new laws on the horizon for 2026?
Answer: California’s employment law landscape changes frequently and keeping up can be tough. New employment laws (technically, “legislative bills”) are normally drafted throughout the year and, if approved, are signed into law in the Fall. Below is a list of the significant employment-related bills that lawmakers have introduced during the 2025 legislative session:
- SB 642 – Amends California’s pay scale and equal pay act laws, including increasing the statute of limitations to allow a longer period in which an employee may seek a remedy for a violation of the law.
- AB 1018 – Regulates the development and deployment of automated decision systems to make employment-related decisions, including hiring, promotion, performance evaluation, discipline, termination, and setting pay and benefits. The bill applies to machine learning, statistical modeling, data analytics, and artificial intelligence. It would require that employers allow workers to opt out of the automated decision system.
- AB 1331 – Places a limit on workplace surveillance tools, including devices used for video or audio recording, electronic work pace tracking, location monitoring, electromagnetic tracking, and photoelectronic tracking. The bill would provide workers with the right to leave behind workplace surveillance tools that are on their person or in their possession when entering certain employee-only areas and public bathrooms and during off-duty hours, as specified.
- SB 590 – Expands eligibility for benefits under the paid family leave program to include individuals who take time off work to care for a seriously ill designated person. The bill would define designated person to mean any care recipient related by blood or whose association with the individual is the equivalent of a family relationship.
- AB 1371 – Allows an employee to refuse to perform a tasked assigned by an employer if it would violate those prescribed safety standards or if the employee has a reasonable apprehension that the performance of the assigned task would result in injury or illness to the employee or other employees.
- SB 294 – Requires employers to provide employees with a “Know Your Rights” notice — developed by the Labor Commissioner’s office — on different kinds of workers’ rights, like heat illness, workers’ compensation and worker misclassification.
For a bill to advance, each legislative body (the Senate and Assembly) must approve the bill. The legislative session in California ends today, September 12. For each bill that advances past the legislative process, Governor Newsom will have until October 12 to either sign (approve) or veto (deny) the bill. The new laws that are signed into law will most likely become effective Jan 1, 2026.
In addition to these new laws, California’s Department of Finance recently announced that the state minimum wage will increase from $16.50 per hour to $16.90 per hour on January 1, 2026. This increase applies to all employers, regardless of size. This increase impacts the minimum salary for full-time exempt employees, which will increase from $68,640 to $70,304 per year on January 1, 2026.
Employers are encouraged to monitor the status of employment related bills this Fall. Once employers know which laws will become law, and when, they are encouraged to review and update their policies, employee handbooks, and training programs. Employers with questions about new laws should contact their employment counsel this Fall.