2026 California Employment Law Updates - Part II
As promised in our last blog post, we are sending a series of important legal updates relevant to federal and California labor and employment law. This is Part II of IV of the update.
SB 513: Expanded Personnel File Access Requirements.
Under current California law, employers must provide current and former employees with access to and copies of their personnel records, usually within 30 days of a request. Effective January 1, 2026, this amendment to Labor Code section 1198.5 clarifies that relevant employee performance records in this context include education and training records. Further, employers who maintain records related to these areas must include specified information such as the employee’s name, name of the trainer, date and duration of training, skills addressed, and certifications earned. As such, when an employer receives a records request pursuant to section 1198.5, they must include these new categories of information when producing the records. Violations can carry a penalty of $750, attorney’s fees, injunctive relief, and are designated as an infraction pursuant to the Labor Code.
AB 692: Prohibits Stay or Pay Clauses in Employment Contracts
Starting January 1, 2026, it will be unlawful for employers to require employees or applicants to include in any employment contract, or require a worker to sign as a condition of employment, an agreement that requires the worker to pay an employer for a debt, allows an employer to seek to collect a debt, or imposes any kind of penalty or fee if the worker’s employment ends. This type of agreement will soon be considered to be a restraint on a person’s ability to engage in their lawful trade, business, or profession, and therefore void.
There are some exceptions to the new law, including student loan repayment assistance programs provided by a government agency, as well as signing bonuses that are not tied to job performance and subject to specific restrictions. The law also carves out an exception for tuition paid for a transferable credential, provided that certain requirements are met, including that the contract can’t require the credential as a condition of employment, and must spell out the repayment amount in advance. Violations can support a private right of action for aggrieved workers, as well as a penalty of $5,000 or actual damages, plus attorney’s fees and costs. While this law is not retroactive and thus will not impact existing agreements, employers should review and update any agreements that will be used as of January 1 to ensure compliance going forward.
SB 464: Expanded Pay Data Reporting
Current California law requires private sector employers with 100 or more employees to send annual pay data reports to the California Civil Rights Department (CCRD) so as to provide a glimpse of their workforce demographics across 10 job categories in terms of race, ethnicity, and sex. Reports also include compensation data across those groups. Courts are permitted to impose a non-compliance penalty of $100 per employee ($200 in the case of repeat violations). The new law would make these penalties mandatory at the CCRD’s request. It also requires that demographic data gathered for purposes of these reports be stored separately from personnel files. Further, as of 2027 the 10 job categories referenced above will expand to 23 categories, as reflected here. The reports for 2026 are due on May 12.
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We will be in touch soon with further updates regarding additional new laws, as well as details regarding the free training we will be offering in early 2026 on compliance with these new requirements.
Clements Employment Law, P.C.
2026 California Employment Law Update Webinar
Don’t forget to RSVP for our complimentary 2026 California Employment Law Update webinar for existing and prospective clients on January 15, 2026 from 12 p.m. to 1:30 p.m. PST, which you can RSVP for below