California passes several new employment laws

California has enacted several new employment laws, including measures involving pay data reporting, paid family leave, civil penalties for wage theft and more.

Other bills were vetoed, including the closely watched AB 1136, which would have provided workers five days of unpaid leave to attend immigration-related proceedings.

California Gov. Gavin Newsom said AB 1136 conflicts with other state leave laws and would have created confusion for employers and employees alike. However, he encouraged the bill’s author to try again next year with a bill that “takes a more surgical approach” to protecting workers.

Pay data reporting (SB 464)

Currently, California employers with 100 or more employees must submit annual pay data reports that include the number of employees by race, ethnicity and sex in each of 10 job categories.

Effective January 1, 2027, SB 464 will expand the job categories to the 23 major groups the federal government uses in its job-classification schema.

SB 464 also will require employers to collect and store employees’ demographic information for pay data reports separately from their personnel records, starting January 1, 2026.

Expanded paid family leave (SB 590)

Effective July 1, 2028, SB 590 expands employee eligibility under California’s paid family leave law to include individuals who take time off work to care for a seriously ill designated person – defined as a blood relation or someone whose association with the employee is the equivalent of a family relationship.

The current scope of the paid family leave law – which covers only an employee’s child, parent, grandparent, grandchild, sibling, spouse or domestic partner – fails to account for “the changing structure of households in California and the realities of caring for each other,” according to a Senate analysis. It noted that California has a higher percentage of multigenerational households than average and that immigrant populations are more likely to live in multigenerational households.

SB 590 also is intended to account for LGBTQ+ employees who often do not have any relationship with biological relatives.

The first time an employee requests paid family leave to care for a designated person, they will be required to identify the designated person and attest to how they are related by blood or to how their association is the equivalent of a family relationship.

Civil penalties for wage theft (SB 261)

Effective January 1, 2026, SB 261 will make employer liable for a civil penalty of up to three times the outstanding judgment amount if a final judgment from the nonpayment of wages remains unsatisfied after 180 days.

“Over half of wage theft judgments go unpaid, with few consequences for law-breaking employers,” said the bill’s author, state Sen. Aisha Wahab. “SB 261 puts a stop to this by enforcing stronger penalties on employers who ignore wage theft judgments and making it easier for workers to collect what they’re owed.”

Debt repayment (AB 692)

For employment contracts entered into on or after January 1, 2026, AB 692 will prohibit so-called “stay-or-pay” contracts, under which employees are required to pay their employers, a training provider or a debt collector if they leave their job within a certain timeframe. There are exceptions for loan assistance programs, tuition repayment plans, apprenticeships and other circumstances.

Worker outreach (SB 578)

Finally, SB 578 will establish the California Workplace Outreach Program to promote awareness of workplace protections – including but not limited to minimum wage, overtime, paid leave, retaliation, health and safety, excessive heat and discrimination protections. It will focus on industries with low wages and high rates of violations.