California Labor Laws 2026: A Complete Guide for HR & Employer Compliance

Accurate as of May 1, 2026. This guide is informational and not legal advice. For specific situations, consult licensed California employment counsel.

California has the most complex employment law framework in the United States. The state regulates nearly every aspect of the employment relationship, often at thresholds far below federal law, and the legislature passes new requirements every single year. Small compliance mistakes create large liabilities here.

The answer to "what does the law require?" almost always starts with three questions: how big is your workforce, what city are your employees in, and which statute applies first. This guide answers those questions across every major topic California HR teams need to own in 2026 — wages, overtime, leave, discrimination, workplace safety, hiring, contractor classification, and enforcement.

If you handle complaints, investigations, leave requests, or terminations in California, the documentation that becomes your defense in an FEHA charge or PAGA case lives in a purpose-built HR case management platform. The detail on why that matters is woven throughout this guide.

The 2026 California Employment Law Updates HR Teams Should Know First

California's January 1, 2026 effective date brought more simultaneous changes than most years. Several are major structural shifts — not just dollar-amount adjustments.

• Minimum wage: $16.90/hour statewide — exempt salary threshold rises to $70,304/year
• Workplace Know Your Rights Act (SB 294): standalone written notice required by February 1, 2026, annually thereafter, and at every new hire
• Emergency contact designation: all current employees must have the opportunity to designate one by March 30, 2026
• Equal Pay Act expanded (SB 642): "wages" now includes bonuses, stock, benefits, and other compensation; statute of limitations extended to 3 years; recovery period extends to 6 years of back wages
• Pay scale "good faith estimate" (SB 642): job posting pay ranges must now reflect actual hiring intent — generic wide ranges no longer satisfy the requirement
• Stay-or-pay agreement ban (AB 692): most provisions requiring employees to repay training, recruiting, or relocation costs are now void
• Paid sick leave expanded (AB 406): broader "safe time" uses including for crime victims and family members in criminal proceedings; enforcement shifts to FEHA framework
• Cal-WARN expanded notice: layoff notices must now include workforce development board contact and CalFresh program information
• Sexual assault claim revival window (AB 250): open January 1, 2026 through December 31, 2027 for cases involving a cover-up
• Wage judgment penalties (SB 261): up to 3x the unpaid amount if wages are not paid within 180 days of judgment
• Training records in personnel files (SB 513): personnel files must now include detailed training documentation
• Pay data reporting expansion (SB 464): 23 job categories required starting with 2027 reports (covering 2026 data)
• Local agency enforcement (SB 1340): cities and counties can now enforce employment discrimination laws after the CRD issues a right-to-sue notice

Every item above gets full treatment in the relevant section below.

California Minimum Wage in 2026

California's statewide minimum wage is set in Labor Code § 1182.12 and adjusts annually for inflation. The 2026 rate is $16.90 per hour, up from $16.50 in 2025. That single number anchors a cascade of other thresholds — the exempt salary floor, the CBA exemption trigger, and certain overtime calculation baselines.

What is California's minimum wage and exempt salary threshold in 2026?

• Statewide minimum wage (effective January 1, 2026): $16.90/hour
• Exempt employee minimum salary: $70,304/year ($1,352/week)
• Computer software professional exemption: $58.85/hour or $122,573.13/year
• Licensed physician exemption: $107.17/hour
• Fast food worker minimum wage (AB 1228): $20.00/hour
• Healthcare worker minimum wage (SB 525): $18.63 to $24.00/hour depending on facility type
• Healthcare worker wage increase (July 1, 2026): $19.28 to $25.00/hour depending on facility type
• 30%-above-minimum CBA exemption floor: $21.97/hour

Industry-specific minimum wages

California has separate minimum wage floors for fast food and healthcare workers that apply on top of — and exceed — the statewide rate.

The fast food rate of $20.00/hour was established by AB 1228 in 2024 and is overseen by the Fast Food Council. The healthcare worker rate under SB 525 varies by facility type, with separate scales for large hospitals, dialysis clinics, community clinics, and other healthcare settings. Healthcare facilities see another scheduled increase on July 1, 2026. Employers in these industries should track their applicable rate separately and not rely on the general statewide floor.

No tip credit in California

California does not allow employers to count tips toward the minimum wage. Tipped employees must receive at least the full state or local minimum wage as direct cash pay, and tips remain the property of the employee under Labor Code § 351. Tip pooling among employees is allowed — but managers, supervisors, and owners may not participate in tip pools.

The exempt employee salary threshold

Under California's white-collar exemption, an employee must earn at least twice the state minimum wage for full-time employment to qualify as exempt. For 2026, that's $70,304 annually ($1,352 weekly). The federal threshold of $684/week ($35,568 annually) does not satisfy California law. An employee who fails the salary test is automatically nonexempt — regardless of job title or duties — and becomes eligible for all wage-and-hour protections.

Misclassification at the salary level creates immediate exposure to unpaid overtime, meal and rest break premiums, wage statement penalties, and PAGA liability.

Local minimum wages by city in 2026

Roughly 40 California cities maintain their own minimum wage ordinances. Where local rates exceed the state floor, the local rate applies. Coverage is triggered by where the work is performed — not where the employer is headquartered. Most ordinances cover any employee who performs at least two hours of work in the city during a given workweek.

Major 2026 local rates:

• San Diego: $17.75/hour
• San Jose: $18.45/hour
• Berkeley, Emeryville, Mountain View, Sunnyvale, Cupertino, Santa Clara, Palo Alto: all above $18.00/hour
• San Francisco and Los Angeles (city): rates adjust July 1 each year — verify current rates directly with each city
• West Hollywood: separate hotel worker minimum that exceeds the general rate

Employers with remote or mobile workforces need to track location-based hours carefully. An employee who spends two hours per week working from a San Francisco coffee shop triggers that city's minimum wage for those hours.

California Overtime Rules: Daily, Weekly, Double Time, and the Seventh Day

California's overtime rules go further than the federal FLSA. State law creates premium pay obligations based on daily hours, weekly hours, and consecutive days worked — whichever produces the highest premium in any given period. The rules sit in Labor Code §§ 510 and 511 and the relevant Industrial Welfare Commission Wage Orders.

When does overtime apply in California?

• 1.5x regular rate: for hours over 8 in a workday
• 1.5x regular rate: for hours over 40 in a workweek
• 1.5x regular rate: for the first 8 hours on the seventh consecutive day in a workweek
• 2x regular rate (double time): for hours over 12 in a workday
• 2x regular rate (double time): for all hours over 8 on the seventh consecutive day in a workweek

The "regular rate" is broader than most employers assume. It includes nondiscretionary bonuses, shift differentials, and certain other forms of pay — not just the hourly base rate. Miscalculating the regular rate is one of the most common audit findings in California wage and hour investigations.

Comp time in lieu of overtime pay is generally unlawful in the California private sector. Limited written-agreement exceptions exist but are narrow and rarely applicable.

Alternative workweek schedules

California employers can adopt a written alternative workweek schedule — such as four 10-hour days — that allows employees to work up to 10 hours per day without incurring daily overtime. The process requires a secret-ballot election with two-thirds approval from the affected work unit, proper DIR notice and reporting, and a written agreement. The election rules are technical and easy to violate. A defective alternative workweek election reverts employees to standard daily overtime rules retroactively.

California Meal Period and Rest Break Requirements

California requires unpaid meal periods and paid rest breaks under Labor Code § 512 and the Wage Orders. Failure to provide either triggers a one-hour premium payment at the employee's regular rate of pay for each missed break — separately for each missed meal and each missed rest break, per workday.

When must meal periods be provided?

• First 30-minute unpaid meal period: required before the end of the fifth hour of work (employees working more than 5 hours)
• Second 30-minute unpaid meal period: required before the end of the tenth hour of work (employees working more than 10 hours)
• Waiver of first meal period: permitted by written mutual agreement when total work is 6 hours or less
• Waiver of second meal period: permitted by written mutual agreement when total work is 12 hours or less and the first meal period was not waived
• On-duty meal period: permitted only when the nature of the work prevents relief from all duties and both parties agree in writing

The meal period must be uninterrupted and the employee must be fully relieved of all duties. An employee eating at their workstation while fielding phone calls does not satisfy the rule.

When must rest breaks be provided?

• 3.5 to 6 hours worked: 1 paid rest break (10 minutes)
• 6 to 10 hours worked: 2 paid rest breaks
• 10 to 14 hours worked: 3 paid rest breaks

Rest breaks should fall in the middle of each work period when practicable. Employees must be fully relieved of all duties during rest breaks, and breaks are paid at the regular rate.

Premium pay for missed breaks

If an employer fails to provide a required meal period or rest break, the employee is owed one additional hour of pay at the regular rate for each violation per workday. The California Supreme Court confirmed in Naranjo v. Spectrum Security Services (2022) that meal and rest break premiums are wages — not penalties — which means they count toward the regular rate for overtime calculations and accrue waiting time penalties at separation. A missed break is not a small-dollar issue in California.

Wage Statements and Pay Stub Requirements (Labor Code § 226)

Labor Code § 226 requires itemized wage statements with specific information for every pay period. Wage statement violations are a frequent anchor for PAGA notices because they are easy to identify and apply across an entire workforce at once.

What must appear on a California pay stub?

• Gross wages earned during the pay period
• Total hours worked (for nonexempt employees)
• All deductions, itemized
• Net wages earned
• Pay period dates (start and end)
• Employee's name and last 4 digits of Social Security number or an employee ID number
• Legal name and address of the legal entity that is the employer
• All applicable hourly rates in effect during the pay period
• Hours worked at each rate
• Piece-rate units earned and applicable piece rate (for piece-rate employees)
• Available paid sick leave balance (required under the HWHFA)

Employers must provide a copy at the time wages are paid and keep records for at least 3 years. Employees can request their wage statement records; the employer has 21 calendar days to comply.

Penalties for wage statement violations

Section 226 violations carry statutory penalties of $50 for the first violation and $100 for each subsequent violation, up to $4,000 per employee, plus attorney's fees. PAGA penalties stack on top of those damages. The post-2024 PAGA reforms created cure procedures for some wage statement defects, but only for employers who can demonstrate they took all reasonable steps to comply before the notice was filed.

Final Paycheck Rules and Waiting Time Penalties

California has some of the strictest final paycheck timing rules in the country. Late final paychecks trigger waiting time penalties under Labor Code § 203: the employee's daily wage continues to accrue as a penalty for each day the wages remain unpaid, up to 30 calendar days.

When is the final paycheck due in California?

• Termination, layoff, or discharge: all wages due immediately, on the day of termination
• Resignation with at least 72 hours' notice: all wages due on the last day of work
• Resignation with less than 72 hours' notice: all wages due within 72 hours of giving notice
• Mailing: permitted if the employee requests it and provides a mailing address

"All wages" includes accrued and unused vacation and PTO under Suastez v. Plastic Dress-Up. California treats vacation as a form of earned compensation that vests as it accrues — unused balances must be paid out at separation. Floating holidays generally count; specifically designated paid sick leave does not.

How waiting time penalties work

If an employer willfully fails to pay all wages on time at separation, the employee continues to earn their daily wage as a penalty for up to 30 calendar days. An employee earning $300/day whose final paycheck is delayed two weeks faces a $9,000 penalty — before the underlying wage claim is calculated.

Iloff v. LaPaix (2025) clarified that a "good faith dispute" defense to waiting time penalties requires an actual factual dispute about whether wages were owed — not just a bookkeeping mistake or administrative delay.

Wage Theft Protection: The Notice to Employee

Labor Code § 2810.5 requires employers to give every nonexempt employee a written notice at hire covering specific employment information. The DLSE provides a template — commonly called the Wage Theft Notice or Notice to Employee.

The notice must include:

• Rate or rates of pay and basis (hourly, salary, commission, piece-rate)
• Regular payday designated by the employer
• Name of the employer, including any DBA
• Physical and mailing address of the employer's main office and telephone number
• Name, address, and phone number of the workers' compensation insurance carrier
• Information about paid sick leave under the HWHFA
• Whether the employment agreement is written or oral

Employers must provide an updated notice within 7 calendar days of any change to the listed information — unless the change is reflected on a timely wage statement.

Pay Transparency, Equal Pay, and Pay Data Reporting (SB 642 and SB 464)

California has had a pay transparency law since 2023, requiring employers to post pay scales in job postings. SB 642, effective January 1, 2026, significantly strengthens those requirements and expands the Equal Pay Act. SB 464 expands pay data reporting starting with 2027 filings.

Pay scale disclosure in job postings

Employers with 15 or more employees must include the pay scale for a position in any job posting under Labor Code § 432.3. SB 642 codifies that "pay scale" means a good faith estimate of the salary or hourly wage range the employer reasonably expects to pay upon hire. Generic wide ranges that don't reflect actual hiring intent no longer satisfy the requirement. Employers must also provide the pay scale to current employees upon request and maintain records of job titles and wage rate history for the duration of employment plus 3 years.

California Equal Pay Act changes under SB 642

Labor Code § 1197.5 prohibits paying employees of "another sex" (SB 642 replaced "opposite sex" with this language) less than employees performing substantially similar work. Legitimate differentials based on seniority, merit, or production systems remain valid defenses.

SB 642 amendments effective January 1, 2026:

• Definition of "wages" expanded: now covers salary, overtime, bonuses, stock, stock options, profit sharing, life insurance, vacation pay, holiday pay, allowances, travel reimbursement, and other benefits
• Statute of limitations extended: 3 years from the cause of action (previously 2 years)
• Recovery period: employees can recover up to 6 years of back wages
• "Good faith estimate" standard: codified for job posting compliance

Pay data reporting under SB 464 (effective for 2027 reports)

Private employers with 100 or more employees must submit annual pay data reports to the California Civil Rights Department. SB 464 expands the required number of job categories from 10 to 23 starting with reports filed in 2027 (covering 2026 data). The reporting requirement applies separately for employers using labor contractors with 100 or more workers.

The Workplace Know Your Rights Act (SB 294)

SB 294 created a new standalone written notice obligation for essentially every California employer. The Labor Commissioner's Office published a template notice employers can use.

What does SB 294 require?

• By February 1, 2026: standalone written notice provided to every current employee
• Annually: notice redistributed to all employees each year
• At hire: notice provided to every new employee at the start of employment
• Authorized representatives: notice sent electronically or by mail to employee representatives
• Recordkeeping: employers must retain compliance records for 3 years

The notice covers workers' compensation rights, immigration agency inspection rights, union organizing and concerted activity rights, and constitutional rights during law enforcement interactions at or during work.

Emergency contact designation

SB 294 also requires employers to give employees the opportunity to designate an emergency contact to be notified if the employee is arrested or detained at work or during work hours and the employer has actual knowledge of the event. Existing employees: opportunity to designate by March 30, 2026. New employees: at the time of hire. Civil penalties for non-compliance: up to $500 per employee per violation, up to $10,000 per employee for certain violations.

Stay-or-Pay Agreement Ban (AB 692)

AB 692, effective January 1, 2026, voids most employment contract provisions that require an employee to repay training, recruiting, relocation, or similar costs if they leave within a specified period. These "stay-or-pay" or "training repayment agreement provisions" (TRAPs) drew growing criticism — and NLRB attention — before California acted.

What stay-or-pay provisions does AB 692 void?

• Provisions requiring repayment of relocation expenses if the employee leaves before a specified date
• Provisions requiring repayment of training or licensing costs (unless the training is genuinely portable and primarily benefits the employee)
• Provisions requiring repayment of recruiting bonuses or sign-on bonuses tied to a tenure requirement (with limited exceptions)
• Provisions imposing financial penalties for leaving within a specified time

Narrow exceptions exist for genuine educational or licensing programs that primarily benefit the employee and meet specific statutory criteria. Every employment agreement, offer letter, sign-on bonus letter, training agreement, and tuition reimbursement policy should be audited against AB 692 before the next hiring cycle.

California Family Rights Act (CFRA)

The California Family Rights Act provides 12 weeks of unpaid, job-protected leave under Government Code § 12945.2. CFRA covers far more employers than the federal FMLA — it applies at a 5-employee threshold versus FMLA's 50-employee/75-mile rule — and its definition of "family member" is significantly broader.

Which California employers are covered by CFRA?

• Employer threshold: 5 or more employees
• Employee eligibility: 12 months of employment and 1,250 hours worked in the prior 12 months
• Leave amount: up to 12 workweeks in a 12-month period
• Job protection: return to the same or a comparable position
• Health benefits: employer must continue group health coverage on the same terms

Qualifying reasons for CFRA leave

• The employee's own serious health condition
• Caring for a family member with a serious health condition
• Bonding with a new child within 12 months of birth, adoption, or foster placement
• Qualifying military exigency related to a family member's active duty
• Caring for a covered service member with a serious injury or illness

"Family member" under CFRA includes spouse, registered domestic partner, child of any age, parent, grandparent, grandchild, sibling, parent-in-law, and a "designated person" (one designation per 12-month period).

How does CFRA differ from federal FMLA?

• Employer threshold: CFRA 5+; FMLA 50+ within 75 miles
• Pregnancy: not a CFRA qualifying reason — covered separately by Pregnancy Disability Leave (up to 4 months)
• Maximum leave for birth parents: up to 4 months PDL plus 12 weeks CFRA bonding — up to 7 months of total job-protected leave
• Family member definitions: CFRA broader; includes domestic partners, grandparents, grandchildren, siblings, parents-in-law, and a "designated person"
• Small Employer Family Leave Mediation Program: the CRD operates mandatory mediation for employers with 5–19 employees before CFRA litigation can proceed

California Paid Sick Leave (HWHFA and AB 406)

The Healthy Workplaces, Healthy Families Act (Labor Code §§ 245–249) requires almost every California employer to provide paid sick leave. The 2024 expansion increased the minimum to 5 days or 40 hours annually. AB 406, effective January 1, 2026, expands the permitted uses and shifts enforcement to the FEHA framework — giving the Civil Rights Department broader authority over violations.

How much paid sick leave do California employees accrue?

• Accrual rate: at least 1 hour per 30 hours worked
• Minimum annual usage: 5 days or 40 hours, whichever is greater
• Front-loading option: employers may front-load 40 hours at the start of each year instead of accrual
• Carryover: required for accrual-method plans (cap of 80 hours or 10 days)
• Eligibility: after 30 days of employment with a 90-day waiting period before first use
• Cash-out at termination: not required (unlike vacation)

What can California paid sick leave be used for?

• Diagnosis, care, or treatment of an existing health condition or preventive care for the employee or a family member
• Safe time for employees who are victims of domestic violence, sexual assault, or stalking
• Reproductive loss leave situations
• Under AB 406 (2026): attending criminal proceedings as a victim or as a family member of a victim; obtaining services from a domestic violence shelter, rape crisis center, or victim services organization; mental health counseling for victims and family members; safety planning and relocation

All information related to an employee's status as a victim or the reasons for safe-time leave must be kept strictly confidential.

Local paid sick leave ordinances

San Francisco, Oakland, Berkeley, Emeryville, San Diego, Santa Monica, Los Angeles, Long Beach, and other cities maintain local paid sick leave ordinances exceeding the state minimum. Multi-city employers must track local ordinances separately and apply the most generous rule for each work location.

California Paid Family Leave, SDI, and Pregnancy Disability Leave

California's Paid Family Leave (PFL) and State Disability Insurance (SDI) programs provide partial wage replacement funded through employee payroll deductions. Pregnancy Disability Leave (PDL) is a separate job-protection statute. All three interact in ways that require careful layering.

California Paid Family Leave

• Maximum benefit period: up to 8 weeks per 12-month period
• Wage replacement: roughly 60–70% of weekly wages (lower-wage workers receive a higher replacement percentage)
• 2026 maximum weekly benefit: $1,765
• 2026 minimum weekly benefit: $50
• Funding: employee payroll deductions through SDI
• Job protection: PFL itself provides none — CFRA, FMLA, or PDL provide the job protection

Qualifying reasons include caring for a seriously ill family member, bonding with a new child, and certain military exigencies. As of January 1, 2025, employers can no longer require employees to use up to two weeks of accrued vacation before receiving PFL benefits.

SB 590, effective July 1, 2028, will allow employees to designate a "designated person" (similar to CFRA) for PFL caregiving leave. Update PFL policies before that date.

California State Disability Insurance

SDI provides partial wage replacement when an employee cannot work due to a non-work-related illness, injury, or pregnancy-related condition. The 2026 SDI contribution rate is 1.3% of wages with no taxable wage cap. The maximum weekly benefit is $1,765 and the maximum benefit period is 52 weeks. SDI provides income replacement, not job protection — separate leave laws handle reinstatement rights.

Pregnancy Disability Leave

PDL under Government Code § 12945 provides up to 4 months (17⅓ weeks) of unpaid, job-protected leave for any employee disabled by pregnancy, childbirth, or a related medical condition. Coverage threshold: employers with 5 or more employees, with no tenure or hours-worked requirement. PDL can stack with CFRA bonding leave to produce up to 7 months of total job-protected leave for a birth parent.

A typical California new-parent leave sequence

• SDI: partial wage replacement during the disability period (typically 4 weeks before delivery and 6–8 weeks after, depending on delivery type)
• PDL: job protection for up to 4 months for the disability period
• CFRA bonding leave: 12 additional weeks of job-protected leave after the PDL period
• PFL: 8 weeks of partial wage replacement during the bonding period

The result: up to 7 months of job-protected leave for a birth parent, with partial wage replacement available throughout most of that period via SDI and PFL.

Other Required California Leaves

California has more individual leave statutes than any other state. Most apply to specific circumstances and run concurrently with other leaves where applicable.

Bereavement leave

Employers with 5 or more employees must provide up to 5 days of bereavement leave for the death of a family member (spouse, child, parent, sibling, grandparent, grandchild, domestic partner, parent-in-law) under AB 1949. The leave can be unpaid, but the employee may use available paid sick leave, vacation, or PTO. Leave must be completed within 3 months of the death.

Reproductive loss leave

SB 848 created leave for employees who experience a miscarriage, failed adoption, failed surrogacy, stillbirth, or unsuccessful assisted reproduction. Employers with 5 or more employees must provide up to 5 days of leave per loss event. The leave may be unpaid, but the employee may use available paid leave. An employee may take up to 20 days of reproductive loss leave in a 12-month period.

Jury duty and witness leave

Labor Code § 230 prohibits employers from discharging or discriminating against an employee for taking time off for jury duty or to appear as a witness under a subpoena. Employees must give reasonable advance notice.

Voting leave

Elections Code § 14000 allows employees up to 2 hours of paid time off to vote if they don't have sufficient time outside working hours. Employers may designate the time at the beginning or end of the shift and must post a notice 10 days before each statewide election.

Crime victim and domestic violence leave

Labor Code §§ 230 and 230.1 protect employees who are victims of domestic violence, sexual assault, stalking, or other crimes. Employers may not discharge, discriminate, or retaliate against employees who take time off to obtain protective orders, seek medical attention, get counseling, attend court proceedings, or address safety concerns. Employers with 25 or more employees must allow time off for these purposes. Under the AB 406 expansion (2026), paid sick leave can now cover many of these absences.

Military leave

California's Military and Veterans Code § 394 provides job protection for employees on military duty, supplementing federal USERRA. California also has a Military Spouse Leave law providing up to 10 unpaid days off when a military spouse is on leave from deployment — for employers with 25 or more employees.

School activities leave

Labor Code § 230.8 requires employers with 25 or more employees to allow up to 40 hours per year of unpaid time off for parents and guardians to attend school or licensed daycare activities for their children, with caps per occurrence.

Organ and bone marrow donation leave

Labor Code § 1510 requires employers with 15 or more employees to provide up to 30 business days of paid organ donation leave and 5 business days of paid bone marrow donation leave in any 12-month period. This leave is in addition to other leaves and may not be charged against PTO or sick leave.

FEHA: Discrimination, Harassment, and Retaliation

The Fair Employment and Housing Act (Government Code § 12940 et seq.) is California's primary anti-discrimination law. The Civil Rights Department (CRD) enforces it. FEHA covers more employers, more protected classes, and more situations than federal Title VII or the ADA — often by a significant margin.

FEHA coverage thresholds

• Discrimination protections: employers with 5 or more employees
• Harassment protections: all employers regardless of size — including those with a single employee or independent contractors
• Filing deadline: 3 years from the date of the alleged unlawful practice (versus 180–300 days under federal law)
• Damages: no caps on compensatory or punitive damages (federal Title VII caps based on employer size)

FEHA protected classes

FEHA protects employees from discrimination, harassment, and retaliation based on:

• Race, color, ancestry, national origin
• Religion (including religious dress and grooming practices)
• Sex, including pregnancy, childbirth, breastfeeding, and related medical conditions
• Gender, gender identity, and gender expression
• Sexual orientation
• Age (40 and over)
• Physical disability, mental disability, and medical condition
• Genetic information
• Marital status
• Military and veteran status
• Reproductive health decisionmaking
• Status as a victim of domestic violence, sexual assault, or stalking
• Off-duty cannabis use (AB 2188)
• Hairstyle and texture (the CROWN Act, as clarified by AB 1815)
• Intersectionality of any combination of the above (SB 1137)

SB 1137 made California the first state to explicitly recognize intersectional discrimination — discrimination based on the combination of two or more protected characteristics. AB 1815 clarified the CROWN Act by removing the word "historically" from its description of hair traits associated with race, broadening the scope of protection.

Harassment under FEHA

FEHA prohibits harassment based on any protected characteristic. Sexual harassment is the most litigated category, but FEHA covers race, religion, age, disability, and every other class with equal force. Harassment protections apply to every employer regardless of size and extend to applicants, unpaid interns, volunteers, and independent contractors.

The two most common harassment theories are quid pro quo harassment — where job benefits are conditioned on submitting to unwanted conduct — and hostile work environment harassment, where pervasive conduct creates an abusive atmosphere. Both require a fast, documented response. The warning signs of a hostile work environment are worth knowing before an incident escalates into a formal complaint.

What every California employer with 5 or more employees must do

• Written harassment policy: distributed to all employees in their primary language
• Sexual harassment training: 2 hours for supervisors, 1 hour for nonsupervisory employees, every 2 years
• New supervisor training: within 6 months of assuming a supervisory position
• Investigation duty: prompt, thorough, impartial investigation of every complaint
• No retaliation: retaliation against employees who report harassment is unlawful under FEHA

Documentation is the employer's primary defense. A structured workflow for complaint intake, investigation, and resolution is what turns a defensible response into actual evidence when the CRD or a plaintiff's attorney asks to see it. For a complete investigation framework, the Definitive Guide to Conducting Workplace Investigations walks through scoping, interviews, evidence handling, and report writing.

Filing a FEHA complaint: what employers need to know

• Filing deadline: 3 years from the date of the alleged unlawful practice
• Cross-filing: CRD has a work-sharing agreement with the EEOC; charges automatically cross-file in most cases
• Right to sue: employees may obtain an immediate right-to-sue notice and proceed directly to civil court
• Mediation: the Small Employer Family Leave Mediation Program is mandatory for employers with 5–19 employees in CFRA disputes
• Local enforcement (SB 1340): cities and counties can now enforce discrimination laws after the CRD issues a right-to-sue notice, if local law provides at-least-as-protective standards

Workplace Violence Prevention Plan (SB 553 / Labor Code § 6401.9)

SB 553, codified at Labor Code § 6401.9, requires almost every California employer to maintain a written Workplace Violence Prevention Plan, train employees on it, and keep a Violent Incident Log. The law took effect July 1, 2024 and is enforced by Cal/OSHA.

Which employers does SB 553 cover?

SB 553 applies to nearly all California employers. Exemptions include:

• Workplaces with fewer than 10 employees at a location not accessible to the public
• Employees teleworking from a location of their choice outside the employer's control
• Healthcare facilities already covered by California's Healthcare Workplace Violence Prevention Standard (Cal. Code Regs. tit. 8, § 3342)
• Department of Corrections and Rehabilitation facilities
• Certain law enforcement agencies

An employer with even one customer-facing location does not qualify for the small-employer exemption. The exemption is for back-office or fully remote operations only.

What must a Workplace Violence Prevention Plan include?

• Names or job titles of persons responsible for implementing the plan
• Procedures to involve employees in developing and implementing the plan
• Methods for accepting and responding to reports of workplace violence without retaliation against reporters
• Communication procedures for concerns and incidents
• Emergency response procedures: alerting employees, evacuation, contacting law enforcement
• Hazard identification and periodic reassessment
• Post-incident response and investigation protocols
• Training requirements at initial implementation, annually, and after significant incidents
• Recordkeeping requirements including the Violent Incident Log
• Plan review and revision procedures

The Violent Incident Log

Employers must maintain a log of every workplace violence incident, retained for at least 5 years. Each entry must include:

• Date, time, and location of the incident
• Workplace violence type (Type 1: stranger; Type 2: customer/client; Type 3: co-worker; Type 4: personal relationship)
• Detailed description of the incident
• Classification of who committed the violence and the circumstances
• Consequences of the incident
• Information about the person completing the log

AllVoices offers a dedicated SB 553 compliance workflow that captures incident reports, generates the Violent Incident Log, and documents training completion.

SB 553 training requirements

• Initial training: when the plan is first established
• Annual training: for all employees on the plan, hazards, reporting procedures, and the Violent Incident Log
• Additional training: when new hazards are identified or after a workplace violence incident
• Content: the WVPP itself, how to recognize and avoid hazards, how to report incidents, and how to access the log
• Format: appropriate to the educational level, literacy, and language of employees

Cal/OSHA penalties under SB 553

• Serious violations: up to $25,000
• Willful or repeat violations: up to $158,727

SB 553 also expanded the workplace violence restraining order process under Code of Civil Procedure § 527.8, allowing collective bargaining representatives to seek temporary restraining orders on behalf of employees as of January 1, 2025.

Hiring, Background Checks, and Pre-Employment Compliance

Fair Chance Act (ban-the-box)

The Fair Chance Act prohibits employers with 5 or more employees from asking about or considering an applicant's criminal history before extending a conditional offer. After a conditional offer, the employer may run a background check and consider criminal history — but must follow a multi-step process if considering rescinding the offer.

• Individualized assessment: consider the nature and gravity of the offense, time elapsed, and the nature of the job
• Preliminary notice: written notice identifying the disqualifying conviction
• 5 business days for response: applicant can challenge accuracy or provide mitigating evidence
• Final decision notice: written notice with reasons if the offer is rescinded, including any challenge procedure

Los Angeles, San Francisco, and San Diego each have local ban-the-box ordinances with additional requirements. The LA Fair Chance Initiative for Hiring Ordinance covers smaller employers and adds further notice obligations.

Salary history ban

Labor Code § 432.3 prohibits California employers from asking applicants about salary history. Employers must also provide the pay scale for a position to applicants upon reasonable request after an initial interview. Voluntary disclosure of salary history by an applicant does not violate the law and can be considered — but the employer cannot solicit it.

Background checks: ICRAA and FCRA compliance

California's Investigative Consumer Reporting Agencies Act (ICRAA) layered on top of the federal Fair Credit Reporting Act (FCRA) creates a two-statute compliance regime for background checks. Required steps include a standalone written disclosure and authorization, pre-adverse action notice with a copy of the report, a waiting period for the candidate to respond, and a final adverse action notice. The social media background screening rules have their own restrictions — employers generally cannot require applicants to provide social media login credentials.

SB 1100: driver's license requirement limits

SB 1100 amended FEHA to prohibit employers from requiring a driver's license for a position unless (1) driving is a reasonably expected job function, AND (2) using alternative transportation would not be comparable in travel time or cost. "Valid driver's license required" can no longer appear in a job posting for roles where driving is incidental.

Off-duty cannabis use protections (AB 2188)

AB 2188, in effect since January 1, 2024, amends FEHA to prohibit discrimination against an employee or applicant based on off-duty, off-premises cannabis use or a drug screen that detects non-psychoactive cannabis metabolites (which can persist for days or weeks after use).

Employers may still:

• Test for impairment at work using methods that detect active impairment
• Maintain drug-free workplace policies prohibiting cannabis during work hours or on premises
• Take action against employees who are actually impaired at work
• Prohibit cannabis possession at work

Pre-employment drug testing panels that detect only THC metabolites — without an impairment test — no longer support a hiring or termination decision in most California workplaces. Exemptions include employees in the building and construction trades and positions requiring federal background clearance or DOT-regulated drug testing.

Independent Contractor Classification: The ABC Test

California uses the strict ABC test from Dynamex Operations West v. Superior Court, codified by AB 5 and amended by AB 2257, to determine worker classification under the Labor Code, Unemployment Insurance Code, and most Wage Orders.

The ABC test

A worker is presumed to be an employee unless the hiring entity proves all three:

• A: The worker is free from the control and direction of the hiring entity in fact and under the contract
• B: The worker performs work outside the usual course of the hiring entity's business
• C: The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed

Factor B is the hardest to satisfy. A software company hiring a developer, a marketing firm hiring a copywriter, or a delivery service hiring drivers will struggle to show the work is "outside the usual course of business."

Exemptions and the Borello test

AB 2257 created a long list of occupational exemptions that fall back to the older multifactor Borello test, including licensed professionals (doctors, lawyers, accountants, architects, engineers), real estate licensees, direct sales workers, and certain professional services relationships meeting a 12-factor test. Each exemption has its own criteria — usually requiring a written contract, separate business location, independent rate-setting, and several other elements.

AB 809: vehicle ownership and contractor status (effective 2026)

AB 809, effective January 1, 2026, clarifies that a worker's ownership of their own vehicle does not, by itself, make them an independent contractor — and reaffirms the employer's duty to reimburse documented personal vehicle use costs under Labor Code § 2802.

Misclassification penalties

Misclassification creates immediate exposure to unpaid overtime, meal and rest break premiums, missed wage statements, unpaid SDI/PFL/UI contributions, and PAGA penalties. SB 459 imposes additional civil penalties of $5,000 to $25,000 per willful misclassification violation.

PAGA: The Private Attorneys General Act After 2024 Reform

The Private Attorneys General Act (Labor Code § 2698 et seq.) deputizes individual employees to enforce the Labor Code on behalf of the state. AB 2288 and SB 92, signed July 1, 2024, made the most significant PAGA reforms in two decades. The reforms apply to notices filed on or after June 19, 2024.

Stricter standing requirements

Post-reform, a PAGA plaintiff must have personally suffered each Labor Code violation alleged. Plaintiffs can no longer bring representative claims for violations they did not personally experience — except when represented by qualifying nonprofit legal aid organizations that have litigated PAGA actions for at least 5 years.

PAGA penalty structure

• Default penalty: $100 per aggrieved employee per pay period for an initial violation; $200 for subsequent violations
• Reduced penalty for isolated violations: $50 per aggrieved employee per pay period for violations lasting no more than 30 consecutive days or 4 consecutive pay periods
• Heightened penalty ($200): now requires either a prior LWDA or court finding within 5 years, or malicious, fraudulent, or oppressive conduct
• Allocation: 65% to LWDA; 35% to aggrieved employees (formerly 75/25)

Good-faith compliance penalty caps

Employers who can demonstrate they took "all reasonable steps" to comply can cap their PAGA exposure:

• 15% cap: if reasonable steps were taken before receiving a PAGA notice
• 30% cap: if reasonable steps were taken within 60 days of receiving a PAGA notice

"All reasonable steps" includes periodic payroll audits, written wage-and-hour policies, supervisor training, and documented corrective action. Centralizing those audits and corrective actions in a single case management system makes the "reasonable steps" defense far more credible when the LWDA or a court asks for evidence.

Cure procedures

• Small Employer Administrative Cure (under 100 employees): submit a confidential cure proposal to the LWDA within 33 days of the PAGA notice
• Judicial Early Evaluation Conference (100+ employees): request a court-administered early evaluation with a neutral evaluator
• Curable violations: minimum wage, overtime, meal and rest breaks, business expense reimbursements, and wage statement violations
• One-cure-per-year limit: the cure option cannot be used more than once in a 12-month period for the same violations

The LWDA proposed additional PAGA regulations in February 2026 that would tighten high-frequency filer rules and add structure to the cure process. Those regulations are not yet final.

Non-Compete Agreements in California

California has the broadest non-compete agreement prohibition in the country. Business and Professions Code § 16600 voids every contract restraining engagement in a lawful profession, trade, or business — with only narrow statutory exceptions.

What California's non-compete ban covers

• Post-employment non-competes: void as a matter of California public policy; narrow exceptions only for sale of a business, dissolution of a partnership, or dissolution of an LLC
• Out-of-state non-competes (SB 699): unlawful to enforce against a California employee even if signed out of state under another state's law
• Customer non-solicits: generally void in California; courts have consistently rejected the argument that they differ meaningfully from non-competes
• Employer notice obligation (AB 1076): employers were required to notify current and former employees in writing by February 14, 2024 (and ongoing thereafter) that any existing non-compete provisions are void

Narrowly tailored confidentiality provisions and IP assignment clauses remain enforceable. Trade secret protection through the Uniform Trade Secrets Act (Civil Code § 3426) is still the appropriate tool for protecting legitimate business interests.

Penalties for unlawful non-competes

SB 699 creates a private right of action for employees, applicants, and prospective employees. Damages include actual damages, attorney's fees, and costs. Attempting to enforce a void non-compete also constitutes unfair competition under Business and Professions Code § 17200.

Cal/OSHA and Workplace Safety

California operates its own state-plan OSHA program — the Division of Occupational Safety and Health (Cal/OSHA) — which enforces standards that are at least as effective as federal OSHA and in many cases more stringent.

Injury and Illness Prevention Program (IIPP)

California Code of Regulations title 8, § 3203 requires virtually every California employer to maintain a written IIPP. The plan must include an identified responsible person, an employee compliance system, a communication system, hazard identification procedures, injury investigation procedures, hazard correction methods, training provisions, and recordkeeping. There is no minimum employee threshold — essentially every employer in California must have a written IIPP.

Heat illness prevention

• Outdoor heat illness (§ 3395): applies to all outdoor workplaces; requires water, shade, cool-down rest periods, training, emergency response procedures, and a written plan when temperatures reach 80°F; high-heat procedures kick in at 95°F
• Indoor heat illness (§ 3396, effective July 23, 2024): applies to most indoor workplaces where temperature reaches 82°F; requires similar protections plus engineering controls and a written plan when temperatures reach 87°F

Cal/OSHA injury reporting

• Serious injury or illness: reported to Cal/OSHA within 8 hours
• Workplace fatality: reported within 8 hours
• Form 300 (annual injury log): maintained year-round
• Form 300A (annual summary): posted from February 1 through April 30 each year
• Form 301 (incident report): completed within 7 calendar days of each recordable injury or illness

Cal-WARN Act: Mass Layoffs and Plant Closures

California's Worker Adjustment and Retraining Notification Act (Labor Code § 1400 et seq.) is broader than the federal WARN Act. Cal-WARN applies to smaller employers and smaller workforce reductions.

Cal-WARN coverage and triggers

• Covered establishment: any industrial or commercial facility that employs (or has employed in the past 12 months) 75 or more persons
• Mass layoff: layoff of 50 or more employees during any 30-day period
• Termination: cessation or substantial cessation of industrial or commercial operations
• Relocation: removal of all or substantially all operations to a location 100 miles or more away
• Notice period: 60 calendar days before the action
• Recipients: affected employees, EDD, Local Workforce Investment Board, and chief elected official of each affected city and county

New Cal-WARN notice requirements (effective 2026)

Effective January 1, 2026, Cal-WARN notices must include:

• Whether the employer is coordinating with a local workforce development board
• A functional email address and telephone number for the local board with a description of its rapid response activities
• Description of CalFresh (the state food assistance program) and a link to the CalFresh website

Cal-WARN penalties

Failure to provide proper notice creates liability for back pay and benefits to each affected employee for the violation period, up to 60 days. Civil penalties of up to $500 per day may also apply for failure to notify the local government.

California Recordkeeping Requirements

• Payroll records (Labor Code § 1174): at least 3 years
• Wage statement copies: at least 3 years; available for employee review within 21 days of request
• Time records: at least 3 years (some Wage Orders require longer)
• Personnel records (Labor Code § 1198.5): at least 3 years; available for inspection within 30 days of request
• Workers' compensation records: 5 years from date of injury
• I-9 forms: longer of 3 years from hire or 1 year after termination
• OSHA Form 300 logs: 5 years
• Workplace Violence Prevention Plan records (SB 553): 1 year for training records; 5 years for the Violent Incident Log
• Training records (SB 513): personnel files must include the training provider's name, duration and date, core competencies covered, and any resulting certifications
• California pay data reports: at least 4 years

Under Labor Code § 1198.5, employees have the right to inspect and receive copies of their personnel records. Employers must respond within 30 calendar days. Under Labor Code § 226, employees can request itemized wage statement copies — the employer must provide them within 21 calendar days; failure triggers a $750 penalty in addition to actual damages.

California State Agencies and Where to File

• Division of Labor Standards Enforcement (DLSE) / Labor Commissioner: wage claims, retaliation complaints, child labor enforcement, prevailing wage
• Civil Rights Department (CRD): FEHA and CFRA enforcement — discrimination, harassment, retaliation, reasonable accommodation; 3-year filing deadline
• Labor and Workforce Development Agency (LWDA): PAGA notices and cure proposals
• Employment Development Department (EDD): unemployment insurance, SDI, PFL, new hire reporting, worker classification investigations
• Division of Occupational Safety and Health (Cal/OSHA): workplace safety complaints, SB 553 enforcement
• Division of Workers' Compensation: workers' comp claims and disputes
• EEOC (federal): Title VII, ADA, ADEA, GINA, PWFA charges — CRD has a work-sharing agreement; California's 3-year window exceeds the federal 300-day deadline
• NLRB (federal): National Labor Relations Act unfair labor practice charges

How AllVoices Helps California Employers Stay Compliant

California's compliance risks concentrate where documentation matters most: harassment investigations, accommodation interactions, leave administration, retaliation claims, and termination decisions. The penalty structures under FEHA, PAGA, SB 553, and California's wage statutes all reward employers who can produce a clear, contemporaneous, defensible record — and punish those who can't.

AllVoices centralizes employee reports, investigations, performance management, and case documentation in one place, with an audit trail that holds up under scrutiny. Here's where the platform directly addresses California's compliance requirements:

• Harassment intake and investigation: FEHA's harassment standard applies to every California employer regardless of size. AllVoices' workplace investigations workflow tracks every step — interview notes, evidence, findings, and resolution — in a single file. Best practices for HR investigations are embedded in the workflow design.
• Anonymous reporting: FEHA's anti-retaliation provisions put pressure on employers to create genuinely safe channels for raising concerns. AllVoices' anonymous reporting tool gives employees a way to report without fear — and gives HR a structured way to respond.
• SB 553 compliance: the SB 553 compliance workflow captures workplace violence incident reports, generates the required Violent Incident Log, and tracks training completion — all in one place.
• Vera AI co-pilot: AllVoices' AI co-pilot for employee relations drafts case summaries, suggests next steps, and surfaces patterns across cases. No data is sent to public LLMs.
• PAGA "reasonable steps" defense: the platform's case history and corrective action records are the documentation a PAGA defendant needs to demonstrate good-faith compliance. A 15% or 30% penalty cap is the difference between a manageable PAGA case and a catastrophic one.
• HRIS integrations: AllVoices integrates with Workday, Rippling, Paylocity, and other platforms, keeping case data and employee records in sync.

California-headquartered teams including Intercom and TrueCar use AllVoices to keep employee relations consistent across hundreds of cases per year. For a deeper look at how legal, compliance, and people teams structure this work, the Essential Guide to Managing Employee Relations Issues and the Handbook for New Employee Relations Managers are good starting points.

Frequently Asked Questions: California Labor Laws in 2026

What is California's minimum wage in 2026?

The California statewide minimum wage is $16.90 per hour as of January 1, 2026, applicable to all employers regardless of size. Local ordinances in cities like San Diego ($17.75), San Jose ($18.45), and others require higher rates. Industry-specific minimums apply to fast food workers ($20.00) and healthcare workers ($18.63 to $24.00 depending on facility type, with another increase July 1, 2026). The minimum salary threshold for exempt employees is $70,304 annually.

How does California overtime differ from federal law?

California requires overtime based on daily hours and consecutive days worked — not just weekly hours. Nonexempt employees earn 1.5x for hours over 8 in a workday, over 40 in a workweek, or for the first 8 hours on the seventh consecutive day. Double time (2x) applies for hours over 12 in a workday or hours over 8 on the seventh consecutive day. The federal FLSA only requires overtime for hours over 40 per week. California does not allow comp time in the private sector.

Does California require paid sick leave?

Yes. The HWHFA requires almost every California employer to provide at least 5 days or 40 hours of paid sick leave per year, accruing at 1 hour per 30 hours worked. AB 406, effective January 1, 2026, expanded the permitted uses to include broader safe-time categories for crime victims and family members involved in criminal proceedings. Several cities have local ordinances providing even more generous benefits. Paid sick leave does not need to be cashed out at termination.

What is the Workplace Violence Prevention Plan under SB 553?

SB 553 (Labor Code § 6401.9), effective July 1, 2024, requires nearly every California employer to maintain a written Workplace Violence Prevention Plan, train employees on it annually, and keep a Violent Incident Log of every workplace violence incident for 5 years. Exemptions apply to workplaces with fewer than 10 employees not accessible to the public, remote workers, and healthcare facilities covered by the healthcare-specific standard. Cal/OSHA enforces the law with penalties up to $25,000 for serious violations and up to $158,727 for willful violations.

Does FEHA apply to small California employers?

Yes — FEHA applies to employers with 5 or more employees for discrimination claims and to all employers regardless of size for harassment claims. FEHA covers more protected classes than federal Title VII, provides a 3-year filing deadline (compared to 180–300 days federally), and carries no caps on compensatory or punitive damages.

What changed with PAGA in 2024?

AB 2288 and SB 92, effective for PAGA notices filed on or after June 19, 2024, made significant changes: stricter standing (plaintiffs must personally suffer each alleged violation), penalty caps for good-faith compliance (15% pre-notice, 30% within 60 days post-notice), expanded cure procedures for employers with fewer than 100 employees, and a new 65/35 allocation of penalties between the state and aggrieved employees.

Are non-compete agreements enforceable in California?

Almost never. Business and Professions Code § 16600 voids post-employment non-competes with very limited exceptions. SB 699 (effective 2024) makes it unlawful to enforce a non-compete against a California employee even if the agreement was signed in another state. AB 1076 required employers to notify current and former employees that existing non-competes are void. Attempting to enforce a void non-compete is an act of unfair competition under California law.

What does the stay-or-pay agreement ban (AB 692) cover?

AB 692, effective January 1, 2026, voids most provisions that require employees to repay training, recruiting, relocation, or similar costs if they leave employment within a specified time. Employers should audit every offer letter, sign-on bonus letter, training agreement, and tuition reimbursement policy. Narrow exceptions exist for genuinely portable educational programs that primarily benefit the employee.

The Bottom Line on California Labor Laws in 2026

California's employment law framework rewards documentation, consistency, and proactive compliance. The same employer behavior that produces a $5,000 penalty in another state can produce a $500,000 PAGA case in California — and the difference is often whether the employer can show a written policy, training records, and contemporaneous case documentation.

The 2026 priorities for California HR teams:

• By February 1, 2026: distribute the SB 294 Workplace Know Your Rights Act notice to every current employee
• By March 30, 2026: give every current employee the opportunity to designate an emergency contact
• Throughout 2026: audit all job postings for SB 642 "good faith estimate" pay scale compliance
• Throughout 2026: review every employment agreement, offer letter, and training agreement for stay-or-pay provisions that AB 692 now voids
• Throughout 2026: review and update Workplace Violence Prevention Plans and conduct annual SB 553 employee training
• Before 2027 reporting deadline: prepare payroll and HR systems for the 23-category pay data reporting expansion under SB 464
• Ongoing: run periodic payroll audits and document corrective actions to build the "all reasonable steps" record that qualifies for PAGA penalty caps

To manage California compliance with the documentation rigor these laws require, see how AllVoices' HR case management platform handles complaint intake, investigations, and recordkeeping for California teams at scale.