818.501.4343November 5, 2025
Now that the California Legislature has adjourned its 2025 sessions, employers across the state are beginning to digest a plethora of new laws, amendments, and regulatory updates that will take effect in 2026. For HR departments and business leaders, the shifting legal terrain presents both opportunity and risk.
Here’s a look at new standards that could open the door for additional employment litigation in 2026 and how to know when it’s time to consult with a California employer defense attorney.
SB 261: DLSE Enforcement of Wage Judgments
SB 261 impacts employers that are subject to civil penalties associated with outstanding judgments from nonpayment of work performed incidents. If the business has not settled the judgment within 180 days, it has an opportunity to present evidence that the penalty should be reduced. If the employee prevails, they would be eligible to recoup reasonable attorney’s fees and costs associated with enforcing the judgment against their employer.
SB 809: Vehicle Business Expenses for Employees and Contractors
SB 809 clarifies that a person is not an independent contractor (IC) simply because they use a commercial or personally owned vehicle to provide labor or services for compensation. It also requires employers to indemnify employees for “reasonable business expenses” that they incur in the performance of their duties.
This bill established a “Construction Trucking Employer Amnesty Program” to relieve eligible construction contractors of civil penalties associated with misclassifying drivers as ICs. To qualify for amnesty, the contractor must execute an approved settlement agreement with California’s Labor Commission by January 1, 2029.
SB 590: Designated Employment Persons and Paid Family Leave
SB 590 represents a continued focus on “designated persons.” The bill is set to take effect on July 1, 2028. It will expand who is eligible for benefits under the state’s paid family leave program. Under the new definition, a person who takes time off to care for an eligible seriously ill designated person would be able to receive wage or pay benefits.
SB 294: Workplace Know Your Rights Act
Employers must provide a written “Know Your Rights” notice to employees by February 1, 2026. The notice must outline the core worker protections that California law provides.
SB 513: Expanded Personnel Record Requirements
The change requires the inclusion of education and training records in employee personnel files. Employers must make these available upon request. SB 513 is another step toward making employment documentation more accessible to workers.
SB 617: WARN Act Updates
SB 617 expands the California WARN Act. It tightens notice obligations ahead of mass layoffs, relocations, and terminations. Employers must provide longer notice periods and greater transparency to employees.
AB 858: Recall and Reinstatement Rights Extended
This law extends COVID-era recall and reinstatement rights for workers in areas such as hospitality, travel, and building services. Covered employers must continue offering positions to laid-off employees before hiring externally.
AB 692: Stay-or-Pay Contracts Prohibited
AB 692 adds a section to the Business and Professions Code to prohibit stay-or-pay contracts that require employees to reimburse training or related costs if they leave employment.
SB 642: Payment of Wages Amendment
SB 642 updates pay-scale disclosure requirements and extends the statute of limitations for wage claims from two to three years. Employers should ensure that their record-keeping practices align with the new timeframe.
SB 464: Pay Data Reporting Expansion
SB 464 expands California’s annual pay-data reporting obligations and requires more granular demographic and compensation information. Employers face stricter penalties for missing or inaccurate submissions beginning in 2026.
AB 406: Strengthened Victim Protections
AB 406 expands employment protections for victims of crime or abuse. It reinforces confidentiality and requires employers to accommodate time-off requests for victims of select crimes.
SB 648: Labor Commissioner Enforcement of Gratuity Violations
SB 648 grants the Labor Commission explicit authority to investigate and enforce gratuity law violations. The change ensures that service employees receive all earned tips and distributions. Hospitality and service sector employers should audit tip-pooling and reporting procedures to remain compliant.
When to Speak to an Employer Defense Attorney
An employer defense attorney can help your organization proactively prepare for these and other legal changes. The time to speak to an experienced business lawyer is before these updates go into effect. They can assist by providing the following essential services:
Risk Assessment and Audit
A defense attorney can audit your existing policies and identify exposure points. They can also update outdated language and propose updates to align with 2026 laws.
Policy Drafting and Updates
Meticulously reviewing all of your policies based on the latest legislative changes can be incredibly tedious. An employer defense attorney can assist with this task and draft appropriate updates to insulate your business from litigation. If an issue arises, those updates can put your business in a more defensible position.
Training and Documentation Requirements
Proper training of managers and employees is critical for compliance. Lawyers can help design training programs and ensure that your compliance efforts are thoroughly documented.
Tailored Solutions and Strategic Advice
If you work in a sector with a unique risk profile, such as technology or healthcare, you may need customized solutions that align with federal and state regulations. An employer defense attorney experienced in those areas can put you at an advantage, as they understand the specific risks you face every day.
Pre-Litigation Counseling and Defense
If you receive a demand letter or are subject to a claim, having an attorney already familiar with your operations is an advantage. Early intervention can also reduce the risk of escalation.
Connect With Pearlman, Brown & Wax, LLP Now
Don’t wait until one of these new provisions opens your business up to liability. The employer defense attorneys at Pearlman, Brown & Wax, LLP can help you proactively protect your business in light of any new law or act provisions.
Our experienced team can review your current policies, work with you to implement compliant updates, and insulate your business from disputes amidst California’s changing regulations, requirements, OSHA updates, any new laws or acts, or amendments to the labor code. Contact us to schedule your consultation today.