As we head into 2026, California continues its push to strengthen employee protections, increase transparency, and modernize workplace rights. New laws touch on everything from minimum wage and pay equity to data privacy and “stay-or-pay” contracts.
Below, our team of employment lawyers at MLG break down the most important changes for California workers in 2026 – in plain English. These updates can affect your paycheck, job security, and legal rights on the job.
1. Minimum Wage Is Going Up (Again)
Starting January 1, 2026, the statewide minimum wage will rise to $16.90 an hour for all employers – up from $16.50 in 2025.
Meaning that if you’re paid less than $16.90 per hour, your employer will need to raise your wages. And if you live in a city like Los Angeles, San Francisco, or Pasadena, your local minimum wage rate may be even higher.
Why It Matters
The increase also impacts salaried “exempt” employees – those not eligible for overtime and not guaranteed meal and rest breaks. To stay exempt in 2026, a worker’s salary must be at least $70,304.00 per year ($5,858.67 per month).
If your salary is below that amount, your employer must either:
- Raise your pay; or
- Reclassify you as non-exempt, which means you become eligible for overtime, meal and rest breaks, and other protections under California law.
Tip: Ask your HR or payroll department if your pay meets the 2026 threshold.
2. California Bans “Stay-or-Pay” Agreements
A major new law – Assembly Bill (“AB”) 692 – targets “stay-or-pay” or training repayment agreements. These are contracts that require employees to stay at a job for a certain period or pay back training costs if they leave early. Beginning in 2026, AB 692 makes it unlawful to include in any employment contract or require a worker to execute, as a condition of employment, such an agreement, with limited exceptions.
Why It Matters
These “golden handcuff” contracts can trap workers in jobs they no longer want or can’t safely stay in. The new law bans most of them, but still allows:
- Tuition reimbursement programs (like for college or certification courses)
- Retention bonus repayment if structured fairly
If your employer makes you sign a training repayment or “clawback” agreement, you have the right to question it. Some older contracts will become unenforceable under the new rules.
Tip: If you’re unsure whether your agreement violates this new law, contact an employment lawyer before signing.
3. Stronger Pay Equity and Transparency Rules (Senate Bill (“SB”) 642)
California continues its fight against pay discrimination with new updates to the Equal Pay Act.
Starting in 2026, job postings must include “a good faith estimate” of the expected pay range for the position.
The law also:
- Extends the statute of limitations for pay equity claims from 2 to 3 years
- Allows workers to recover up to 6 years of back pay in wage discrimination cases
Why It Matters
These changes make it easier for workers to spot unfair pay practices – and to take action if they’re being underpaid based on gender, race, or other protected traits.
Tip: Save copies of job postings and pay stubs – they can be powerful evidence if pay disparities arise.
4. New “Workplace Know Your Rights Act” (SB 294)
Starting February 1, 2026, employers must give every worker an annual written notice explaining their rights, including:
- Protections against unfair treatment related to immigration status
- What to do if law enforcement comes to your workplace
- How to designate an emergency contact if you’re detained or arrested at work – which existing employees must have the opportunity to do by March 30, 2026.
Why It Matters
This new law helps protect vulnerable workers – especially immigrants and mixed-status families – from intimidation or wrongful terminations. Employers who fail to provide this notice may face penalties.
Tip: Keep the notice for your records, and know that your immigration status does not cancel your rights under California law.
5. Paid Family Leave Expands to “Designated Persons”
Under SB 590, California’s Paid Family Leave (PFL) program will expand (starting July 1, 2028) to include care for a “designated person.”
This could be:
- A relative by blood, or
- Anyone who is “like family” – such as a close friend, partner, or chosen family member.
Why It Matters
This is a huge step toward inclusive family leave – recognizing that not all families look the same. While this part doesn’t take effect until 2028, it’s important for workers to know it’s coming and plan ahead.
6. Stronger Enforcement for Unpaid Wages (SB 261)
If your employer fails to pay you what you’re owed, California’s Labor Commissioner now has more power to enforce judgments.
The new law:
- Requires the Labor Commissioner to publicly post unpaid wage awards
- Allows for civil penalties and additional fees for employers who ignore court-ordered wage payments
Why It Matters
This means workers who win wage claims have a better chance of actually getting paid – not just a piece of paper saying they should be.
Tip: If you’ve won a wage claim and still haven’t been paid, contact the Labor Commissioner’s office or a workers’ rights attorney immediately.
7. Updates to the Private Attorneys General Act (PAGA)
California’s PAGA law lets workers sue employers on behalf of the state for labor code violations.
Recent reforms, which will shape lawsuits in 2026 and beyond, aim to curb abusive claims but still protect workers’ ability to enforce their rights.
Key updates include:
- Workers can only bring claims for violations they personally experienced
- Employees now keep 35% of penalties (up from 25%)
- Employers have more chances to “cure” violations before facing full lawsuits
Why It Matters
This makes the PAGA process more focused and fair – while still holding employers accountable.
If your rights are violated, you can still take action, but your claim must be specific and timely.
8. Data Privacy and AI in the Workplace
While Governor Newsom vetoed the “No Robo Bosses Act” (SB 7) in 2025, discussions around AI use in hiring and discipline are far from over. Expect new regulations in the coming years on how employers use algorithms to make employment decisions.
At the same time, new data breach laws (SB 446) require companies to notify California residents within 30 days if their personal information is compromised.
9. Industry-Specific Changes to Watch
Some 2026 updates affect specific industries:
- Hospitality workers: COVID-era right-to-rehire protections extended to January 1, 2027 (AB 858)
- Restaurants: Must now clearly label menu items containing major food allergens (SB 68)
- Trucking and port industries: New reporting rules for contractor classifications (SB 703, though vetoed, may resurface in future sessions)
What This Means for You
California’s new employment, consumer, and data breach and privacy laws show clear themes: worker empowerment, transparency, fairness.
If you’re an employee in California, here’s what you can do:
- Review your paystub to ensure you’re meeting the 2026 minimum wage.
- Ask questions if you’re asked to sign a training repayment or “stay” agreement.
- Keep written records – notices, pay information, job postings, and contracts.
- Report concerns if your employer isn’t following the law.
- Talk to an employment lawyer if you believe your rights have been violated.
Need Help Understanding Your Rights?
At Matern Law Group, we stand for fairness, equity, and accountability in the workplace. If you believe your employer isn’t following these new laws – or if you simply want to understand how they affect you – our legal team can help.
Call us today at 855-913-1134, or fill out the form for a free consultation. We’re here to make sure you get the pay, protection, and respect you deserve in 2026 and beyond!