In 2026 and beyond, California employers will be subject to a host of new employment laws.
California’s Equal Pay Act (the Act) prohibits wage discrimination and requires pay transparency with applicants and employees. SB 642 amends both dimensions of the law in significant ways, effective January 1, 2026. First, SB 642 revises the definition of “pay scale,” which must be included in job postings and disclosed to applicants and employees upon request, as “a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.” Second, SB 642 redefines “wages” and “wage rates,” for purposes of evaluating pay discrimination, as “all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.” Third, SB 642 prohibits employers from paying employees at wage rates less than the rates paid to employees of “another sex,” replacing the current iteration of the “opposite sex.” Lastly, SB 642 expands the statute of limitations to bring a claim under the Act from two to three years and further allows an employee to recover for the period of violation, not exceeding six years.
Effective January 1, 2026, California employers will be prohibited, with limited exception, from entering into employment agreements that include a provision requiring an employee to pay or reimburse the employer upon separation. Any such contract will be deemed void as an unlawful restraint of trade under California Business & Professions Code § 16600.
AB 692 carves out a few exceptions to this prohibition, including for tuition payments, government loan repayment or forgiveness programs, and discretionary bonuses provided at the outset of employment and unrelated to job performance. With respect to such bonuses, which may include signing, relocation, or retention bonuses, to lawfully compel repayment upon separation, an employer must (i) include the repayment terms in a separate, standalone agreement; (ii) inform the employee in writing of their right to consult counsel and provide them at least five business days to consider and sign the agreement; (iii) prorate the repayment obligation based on the remaining term of the retention period, which may not exceed two years; (iv) impose no interest accrual; (v) provide the employee the option to defer receiving the payment until the end of the retention period with no repayment obligation; and (vi) require repayment only if the employee voluntarily resigns or is terminated for misconduct.
SB 617 expands California Worker Adjustment and Retraining Notification (WARN) Act notice requirements. Effective January 1, 2026, state WARN notices to employees, the California Employment Development Department, and other local agencies must indicate whether the employer intends to coordinate services through the local workforce development board or another entity, or not at all. SB 617 also requires notices to include information about CalFresh, California’s statewide food assistance program, as well as a functioning email and telephone number to contact the employer.
Beginning July 1, 2028, California employees may seek paid family leave (PFL) benefits to care for a “designated person.” SB 590 defines “designated person” as a person “related by blood or whose association with the individual is the equivalent of a family relationship.” To receive PFL benefits to care for a designated person, the employee must identify the designated person and attest, under penalty of perjury, (i) how the employee is related by blood to the designated person or (ii) how the employee’s association with the designated person is the equivalent of a family relationship.
SB 464 amends the existing requirements applicable to employers with 100 or more employees that must report certain employee pay data to the California Civil Rights Department (CRD). Effective January 1, 2026, covered employers must collect and store demographic information separate from employee personnel records. In addition, SB 464 requires a court to impose a civil penalty against an employer that fails to file the report if requested to do so by the CRD. Further, beginning January 1, 2027, the number of compulsory job categories in the pay data reports will increase from 10 to 23, including through the expansion of general categories like professionals, executive technicians, and others into several new subcategories.
In 2026, and annually thereafter, employers will have a new notice requirement for both new hires and current employees, pursuant to the Workplace Know Your Rights Act. The law compels the California Labor Commissioner, on or before January 1, 2026, to develop and post to its website a template notice that will satisfy the new law’s notice requirements. Employers will then have until February 1, 2026, to issue the notice to all newly hired as well as current employees in California, and to reissue the notice annually thereafter. The new law principally addresses constitutional and other rights for employees in connection with law enforcement interaction (including immigration-related law enforcement) in the workplace, and it requires employers to give employees the opportunity to provide an emergency contact to be notified in the event of arrest or detainment. The law also imposes significant penalties on employers for non-compliance and/or retaliation against employees who exercised their rights under the new law. Employers should monitor the Labor Commissioner’s website for the posting of the notice template and consult with counsel on any refinements to the notice before distribution.
Washington enacted RCW 49.44.085 during the height of the #MeToo movement to protect employees from being forced to arbitrate workplace harassment and discrimination claims. Much like California’s AB 51, the statute sought to preserve public accountability in resolving employment disputes by prohibiting mandatory confidentiality and arbitration of certain claims.
The statute broadly bars employers from requiring arbitration of discrimination, harassment, and retaliation claims, including under federal law, if the process includes confidentiality provisions. For years, the statute survived Federal Arbitration Act (FAA) preemption challenges, unlike AB 51, which was ultimately struck down. (See our AB 51 client alerts for more background.) However, a recent Washington Court of Appeals decision in Phillips v. Swedish Health Services, 34 Wash.App.2d 129 (2025) cast serious doubt on the statute’s continuing validity. The Washington Supreme Court declined review, leaving the appellate ruling in place.
Phillips sued his former employer, Swedish Health Services, for constructive discharge and race discrimination under the Washington Law Against Discrimination (WLAD). Swedish moved to compel arbitration based on a dispute resolution agreement Phillips had signed at hiring. Phillips appealed the motion, arguing that RWC 49.44.085 rendered the arbitration agreement void. The trial court agreed with Phillips and denied the motion, but the appellate court reversed, holding:
Washington employers should consider consulting with counsel and revisiting their arbitration agreements with both current and prospective employees in light of this development.