Takeaways
- Major employer obligations affected by new laws include pay reporting, worker rights and leave entitlements.
- Employers will have to review and update workplace policies and procedures to be compliant with the latest legislative changes.
- To ensure updates are properly implemented, employers should train management and HR teams on the new laws.
Related links
- California Workplace Law Blog
- Workplace Privacy, Data Management, & Security Report
- Legislative Information: Bill Search
Article
California Gov. Gavin Newsom has signed many bills passed in the 2025 legislative session into law that affect employers with employees in the Golden State. Below are highlights of what did and did not become law. Unless otherwise specified, all new bills take effect Jan. 1, 2026.
Labor
Assembly Bill (AB) 288 expands worker rights and gives the Public Employment Relations Board (PERB) new authority in private-sector settings under certain conditions. The law reaffirms workers’ rights to organize, join, and support labor organizations and mandates that any employer restriction must pass strict scrutiny. When federal protections under the National Labor Relations Act are absent, delayed, or ineffective, PERB can step in to handle representation petitions, unfair labor practice claims, and impose remedies or penalties. Once PERB’s jurisdiction attaches under AB 288, it continues to control the matter unless a court intervenes.
AB 1340 establishes the “Transportation Network Company Drivers Labor Relations Act,” granting certain gig drivers the right to organize, bargain collectively, and engage in concerted activities. PERB will administer the Act, overseeing elections, unfair practice claims, and the certification of driver organizations. Transportation network companies must regularly submit detailed driver data to PERB, which will determine active drivers eligible for union participation. Certified driver organizations can negotiate sector-wide agreements on issues such as appeals pertaining to deactivation of employees, safety, paid leave, and grievance procedures without changing drivers’ independent contractor status or minimum guarantees.
Pay Transparency
Senate Bill (SB) 464 expands California’s pay data reporting obligations for private employers with at least 100 employees.
Beginning in 2026, a court must impose civil penalties for failing to submit required pay data reports when the state files a claim, and employers must store demographic data separately from personnel files.
In 2027, the number of job categories employers must report on go from 10 to 23, requiring reassignment of roles based on the federal Standard Occupational Classification System.
Employers may want to begin preparing now by coordinating with vendors, reviewing employee classifications, and aligning upcoming reporting processes.
SB 642 revises California’s Equal Pay Act. Key changes include:
- Definition of “pay scale” is refined to mean a good-faith estimate of the salary or wage range the employer expects to pay upon hire.
- What counts as “wages” or “wage rates” include bonus plans, stock options, benefits, reimbursements, and other forms of compensation.
- Statute of limitations is capped at six years.
- Definition of “sex” aligns with the Fair Employment and Housing Act.
Wage and Hour
SB 648 authorizes the California labor commissioner to enforce tip and gratuity claims. Before SB 648, the labor commissioner lacked explicit authority to issue citations or civil actions when employers misused or withheld gratuities. Under the new law, enforcement mechanisms mirror those for minimum wage violations.
Restrictive Covenants
AB 692 makes it unlawful, with limited exceptions, for California employers to require employees to repay debts or fees to the employer, training provider, or debt collector when employment ends.
The law prohibits contract terms that impose repayment obligations tied to job termination, except in specific cases such as government loan forgiveness programs, tuition for transferable credentials, approved apprenticeships, or certain discretionary bonuses at the onset of employment. These exceptions must meet strict conditions, such as notice separate from the employment contract and prorated repayment.
Paid Family Leave
SB 590 expands California’s paid family leave program to allow employees to receive benefits when caring for a seriously ill “designated person.” This builds on 2022’s AB 1041, which first permitted such leave under the California Family Rights Act and Paid Sick Leave but did not provide income replacement benefits for it.
Beginning July 1, 2028, employees will be eligible for paid benefits when caring for a designated person. Workers must identify the designated person and attest under penalty of perjury that the relationship is either by blood or equivalent to a family relationship.
Reduction in Force
AB 858 extends COVID-era recall and reinstatement rights beyond the original Dec. 31, 2025, expiration date. AB 858 gives laid-off employees in eligible hospitality and service industries until Jan. 1, 2027, to exercise such rights. Employers in those industries must be mindful that recall obligations continue under this extension.
SB 617 amends CalWARN notice requirements for layoffs, closures, and relocations. Employers must disclose whether they plan to coordinate reemployment services through the local workforce development board (or another entity), include that board’s contact information, and describe its services.
CalWARN is more expansive than the federal WARN Act, in coverage thresholds (at least 75 employees), as well as in triggering events and who must receive notification.
Workplace Training
SB 303 introduces protections for bias training. The law states 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 a bias mitigation training, does not, by itself, constitute unlawful discrimination. This law amends the California Fair Employment and Housing Act, which requires employers to prevent workplace discrimination, including providing specified harassment prevention training.
Notices and Recordkeeping
SB 294 requires California employers to provide a stand-alone written notice of worker rights to all employees at hire and annually thereafter, starting in 2026.
The labor commissioner must create and update a template notice with key state and federal worker rights information by Jan. 1, 2026, and employers must distribute it by Feb. 1, 2026. The law also mandates that employees be allowed to name an emergency contact to be notified if they are arrested or detained during work, with implementation due by March 30, 2026.
SB 513 expands the types of personnel records California employers must make available to current and former employees. In addition to performance and grievance records, employers must provide access to documents related to any education or training the employee received. These records must include details such as the training provider, dates, duration, core competencies, and any resulting certifications or qualifications.
Significant Vetoes
Some notable bills vetoed by the governor include:
- SB 7, also referred to as the No Robo Bosses Act, would have regulated an employer’s use of automated decision systems.
- AB 1136 would have required certain employers to provide up to five unpaid days per year for workers to attend immigration-related proceedings, protect employees detained in deportation proceedings by placing them on unpaid leave for up to 12 months, and mandate reinstatement to prior job classification once proper work authorization is produced.
- AB 1326 would have established a legal right for individuals to wear a “health mask” in public places for reasons of individual or public health, while preserving limited exceptions for identification, workplace functions, and emergency protocols.
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