2026 California Employment Law Updates - Part IV
Happy New Year! Below is Part IV and our final installment of California employment law updates for 2026. The significant number of new laws and legal trends for employers in California can be overwhelming, so we again encourage you to RSVP to 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. Follow this link to RSVP.
SB 261: Stronger Wage Claim Enforcement
In an effort to support greater rates of recovery by workers who pursue wage theft claims with the Division of Labor Standards Enforcement (DLSE), the legislature passed SB 261, which significantly increases risks for employers who delay in paying final judgments. Specifically, if a final wage judgment goes unpaid for more than 180 days after the period during which an employer can appeal, the new law imposes a civil penalty of up to three times the outstanding judgement amount plus interest. Half of any penalty would go directly to affected employees, and half would go to the agency. Courts must also award attorney’s fees and costs to prevailing plaintiffs (which can include an employee, the Labor Commissioner, or a public prosecutor), and joint and several liability for penalties would be extended to successor entities that may seek to avoid paying the judgment. This law takes effect January 1, 2026.
SB 648: Labor Commission Can Enforce Labor Code Related to Gratuities
Under existing law, employers cannot deduct from employee wages or otherwise take away gratuities, defined under Labor Code section 350 as “any tip, gratuity, money, or part thereof that has been paid or given to or left for an employee by a patron of a business over and above the actual amount due the business for services rendered.” SB 648 provides that as of January 1, 2026, to authorize the Labor Commissioner to investigate and issue a citation or file a civil action for gratuities taken or withheld in violation of the Labor Code. Enforcement in this context would mirror that which applies to minimum wage violations. Employers should ensure that tip policies are clear and in writing, and are designed to comply with these and other requirements, including that credit card processing fees not be deducted from employee tips.
SB 590: Paid Family Leave Expanded to Include a "Designated Person"
Starting July 1, 2028, California’s Paid Family Leave (PFL) benefit program will utilize a broader definition of “family,” expanding it to include a “designated person.” Similar to how this term is defined under the recently amended California Family Rights Act (CFRA), a “designated person” in this context can be “any care recipient related by blood or whose association with the individual is the equivalent of a family relationship.” PFL provides up to eight weeks of partial wage replacement to employees who take leave to care for a new child or seriously ill family member, or due to a qualifying military exigency.
Notably, and unlike under the CFRA or Paid Sick Leave laws, SB 590 requires employees, under the penalty of perjury, to attest to how the employee is related by blood to the designated person, or how the employee’s association with the designated person is the equivalent of a family relationship. Similar to other laws noted above, SB 590 allows employers to limit employees to one designated person per 12-month period.
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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