By: Kristina Launey and Martha Gates

Seyfarth Synopsis: As swashbuckling trick or treaters are donning their swords, and fearing getting trapped in a Halloween haunted house or corn maze, employers operating in California are navigating the mental maze of deciphering a path to compliance with AB 692. Read on for our summary of the tricks and treats (exceptions) to this new “stay-or-pay” prohibition law, which goes into effect January 1, 2026.

On Halloween, it’s not ghosts or witches that are concerning employers operating in California, but rather California’s AB 692, which goes into effect January 1, 2026. This is one of many legislative efforts nationwide purporting to protect employees from employers “trapping” (TRAP an acronym for Training Repayment Assistance Programs) them into continued employment by paying for training programs in exchange for the employee remaining employed for a certain period of time. Like the trick or treaters who can convince their parents to visit a few more houses on a Halloween night graced with our California weather, the Golden State’s new law goes far beyond other states’ efforts. Subject to narrow carveouts for certain “stay-or-pay” agreements, it will void contracts that require employees, upon separation of employment, to pay the employer for benefits the employee received during employment, such as training programs, immigration costs, signing or retention bonuses, relocation costs, and more.

Employers that do business in California are rightly scrambling to review their employment agreements and benefit programs to ensure compliance with the new law by January 1, 2026. Keep reading for our summary of how employers can avoid being spooked by these upcoming restrictions.

Trick or Treat! Which Contracts Are Covered?

Within the scope of the law: Contracts that require employees, upon separation of employment, to pay the employer for any “debt,” or benefits afforded to the employee during employment.

Outside the scope of the new law: Two key types of contracts for benefits that many employers currently provide, if specific requirements are met:

  1. Tuition assistance payments for a transferable credential, and
  2. Any discretionary or unearned monetary payment, including bonuses, that is provided at outset of employment and is not tied to specific job performance.

The law also carves out contracts for loan repayment assistance/forgiveness program by a government agency, State Department of Apprenticeship Standards apprenticeship program enrollment, and residential property leasing or purchase assistance, without specific conditions.

Don’t Get A Fright When Exploring The Exceptions

Like a haunted house, the contracts excluded from this law are filled with spooky and specific conditions to gain access.

Employers only get the treat of the tuition exception if the agreement satisfies strict conditions:

  1. The  repayment agreement must be a standalone contract, separate from the employment agreement.
  2. It must provide written advance notice of the repayment amount, and that amount cannot exceed the employer’s actual cost for the credential.
  3. Obtaining the transferable credit cannot be a condition of employment, and while the law does not specify a retention period for tuition assistance, any repayment obligation must include a prorated schedule for early termination.
  4. The agreement cannot require repayment if the employer terminates the employee, except in cases of misconduct.

Similarly, the discretionary/unearned monetary payment or bonuses exception only applies if those payments are made at the outset of employment, not tied to job performance, and are:

  1. In a separate agreement from the primary employment contract;
  2. Advise the employee of the right, to consult an attorney before signing, and give the employee five days to do so;
  3. Prorate (presumably immediately) any repayment obligation for early separation based on the remaining retention period (which is expressly limited to a maximum of two years) and not accrue interest;
  4. Provide the employee the option to defer receipt of the payment until the end of the retention period without repayment obligation (this will require some mechanism for them to select deferral and could raise issues under federal employee benefit laws); and
  5. Require repayment only if the employee leaves voluntarily or is terminated for misconduct.

The discretionary/unearned monetary payment or bonuses category could include relocation payments, signing bonuses, retention bonuses, stock grants, and more.

Offering relocation benefits after AB 692 could be a trick in and of itself. Relocation assistance, often administered through third-party vendors with capped budgets, is designed to cover upfront costs. Deferring such assistance until after a retention period undermines its purpose entirely, leaving employees to front expenses that the benefit was meant to alleviate. Similarly, retention bonuses, which could also include relocation benefits offered to existing employees, are seen as critical tools for maintaining workforce stability during mergers, layoffs, or transitions, are not even included in the exception. Because AB 692 only permits repayment agreements tied to payments made at the start of employment, it excludes retention strategies deployed mid-employment, leaving employers with fewer lawful options to retain key talent during high-risk periods, making traditional retention tools far less viable.

Additionally, many employers use promissory notes with interest as “repayment agreements” when offering bonuses or other benefits to secure repayment if employees leave before the retention periods. AB 692 outlaws this approach.

Non-Compliance Is No Treat

Like the candy collected after a long night of trick or treating, the damages and penalties for non-compliance with AB 692 can really pile up. The law provides employees with a private right of action and allows recovery of $5,000 per employee or actual damages, whichever is greater, as well as injunctive relief, and recovery of attorneys’ fees and costs.

How To Survive The “Stay-or-Pay” Maze

If this makes your head spin, you’re not alone. Here are your action items toward compliance:

  1. Survey your employee retention and incentive benefits programs. This includes reviewing offer letters, and identifying any benefits that are offered in exchange for an employee’s agreement to repay the benefit if the employee leaves within a specified period.
  2. Review your tuition assistance programs. For tuition payments, is the payment for a transferable credential?  If so, make sure you have a separate contract that fits within the requirements of the exception, outlined above.
  3. If you promise or provide signing, retention, or bonus payments at the outset of employment, make sure you comply with the exception requirements, outlined above.  If you cannot comply with the exception requirements, or if the payment is not promised or provided at the start of employment, consider other options.

    For example, AB 692 is not triggered if you offer the bonus but do not pay it until the end of a retention period. Employers can also consider making pro-rata payments phased to occur at specified times during employment if the employee remains employed, rather than requiring repayment if the employee leaves employment. The Assembly Judiciary committee condoned this practice in its April 18, 2025 analysis.
  4. Update all existing contracts to comply with the new requirements. Even though contracts entered into pre-January 1, 2026 will not yet bear these requirements, you do not want your managers, recruiters, or HR team accidentally reusing (or extending) non-compliant contracts into 2026.

It’s Spooky Out There

AB 692 builds upon existing state and federal prohibitions on employee non-complete agreements, and addresses what is perceived as an employer “work-around” to California’s non-compete prohibition impacting employees’ career mobility.

While AB 692 is by far the most comprehensive ban on “stay-or-pay” agreements, other states have taken steps to impose similar limits. For example, Wyoming law limits certain incentive agreements. Unlike California, Wyoming provides a timeframe within which the employee must remain employed before the repayment prohibition applies, and even after that, it is prorated. Indiana, Ohio, Colorado have repayment prohibitions specific to training in the healthcare industry (one of the industries and practices at which AB 692 is targeted). Other states, including New York, have seen similar legislative activity. 

This anti-TRAP/“stay-or-pay” trend was bolstered by a now-rescinded 2024 NLRB Memorandum that opined stay-or-pay provisions generally violate Sections 7 and 8 of the NLRA in many of the same ways as non-compete agreements. Unlike other states’ legislation, AB 692 appears to exceed the scope of this Memo, which did not exclude retention bonuses offered after the start of employment.

Workplace Solutions

California’s AB 692 marks a significant shift in the legal landscape surrounding employee retention and incentive agreements, effectively dismantling many traditional “stay-or-pay” arrangements. While the law aims to promote employee mobility and prevent coercive repayment obligations, it also introduces substantial challenges for employers, particularly those relying on these benefits to attract and retain talent. In complying with the restrictions under this law, employers should rethink how they structure benefits and address any resulting culture shifts. Those who adapt thoughtfully will not only avoid costly penalties but may also have the competitive edge. The authors or your favorite Seyfarth lawyer are here to advise on compliance with these new requirements.

Edited by: Catherine Feldman

By: Kristina M. Launey and Catherine Feldman

Seyfarth Synopsis:  With Governor Newsom’s October 13 deadline to sign bills behind us, we review California’s new employment laws. The most notable among them are new pay equity requirements, amendments to Cal-WARN and leave laws, and extensions of meal and rest period exemptions for certain industries.

According to Chris Micheli, Governor Newsom approved 794 and vetoed 123 of the 917 bills presented to him at the conclusion of this first year of the 2025-26 Legislative Session. Below is our summary of the key labor and employment laws that will soon impact California employers. All new laws are effective January 1, 2026, unless otherwise stated.

Soon-to-be-New Laws

Anti-Discrimination and Harassment Laws

SB 642 – Definition of Pay Scale  

Current law requires that employers with 15 or more employees make available the “pay scale” of a position to a candidate applying for that position. As we explained in detail here, SB 642 revises the definition of “pay scale” to mean a “good faith” estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire. The bill also expands the statute of limitations to assert pay equity claims from two years to up to three years after the cause of action occurs, and allow recovery of lost wages for the entire time during which the violation occurred, up to six years. “Wages” and “wage rates” are defined in the bill as including, for purposes of Labor Code Section 1197.5 only, “all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.”

This bill amends Sections 432.3 and 1197.5 of the Labor Code.

SB 464 – Employer Pay Data

SB 464 requires an employer with 100 or more employees to collect and store any demographic information gathered by an employer or labor contractor for the purpose of submitting the required pay data report to the Civil Rights Department (“CRD”) separately from employees’ personnel records, and requires a court to impose a civil penalty against an employer that fails to file the pay data report if requested to do so by the CRD. The bill also, beginning January 1, 2027, increases the number of job categories on which the employer must report from 10 to 23.

This bill amends, repeals, and adds Section 12999 of the Government Code.

AB 250 – Extended SOL for Sexual Assault Claims

AB 250 extends the eligibility period for revival of claims seeking to recover damages suffered as a result of an alleged sexual assault that would otherwise be barred prior to January 1, 2026 because the applicable statute of limitations has or had expired. To revive sexual assault claims, including derivative claims for wrongful termination and sexual harassment, among others, the plaintiff must demonstrate that one or more entities legally responsible for damages engaged in a cover up.

The bill defines a “cover up” as a “concerted effort to hide evidence relating to a sexual assault that incentivizes individuals to remain silent.” The bill permits a cause of action for any such claim to proceed if already pending in court on the effective date of the bill or, if not filed by that date, to be commenced between January 1, 2026, and December 31, 2027.

This bill amends Section 340.16 of the Code of Civil Procedure.

SB 303 – Bias Mitigation Training

SB 303 provides that an employee’s assessment, testing, admission, or acknowledgment of their own personal bias that was made in good faith and solicited or required as part of a bias mitigation training does not constitute unlawful discrimination under FEHA.

This bill adds Section 12940.2 to the Government Code.

SB 617 – WARN

SB 617 amends the California Worker Adjustment and Retraining Act (Cal-WARN) to require employers to include in the WARN notice whether the employer plans to coordinate services through the local workforce development board or another entity, and information regarding the statewide food assistance program known as CalFresh.

This bill amends Labor Code sections 1401 and 2810.8.

Leave Laws

SB 590 – Paid Family Leave – Designated Person

Continuing the “designated person” trend from prior years’ leave legislation, beginning July 1, 2028, SB 590 expands eligibility for benefits under the paid family leave program to include individuals who take time off work to care for a seriously ill “designated person.” The “designated person” definition aligns with the California Family Rights Act “designated person” definition, which includes any individual related by blood or whose association with the employee is the equivalent of a family relationship.

An employee identifies the designated person the first time they file a claim for family temporary disability insurance benefits to care for a designated person, and is required to state under penalty of perjury, how they are associated with that person by blood or the equivalent of a family relationship.

This bill amends, repeals, and adds Sections 3301, 3302, and 3303 of the Unemployment Insurance Code.

AB 406 – Judicial Proceeding and Jury Duty Leaves
** Effective in part October 1, 2025**

AB 406 expands the reasons for use of California Paid Sick Leave under the Healthy Workplaces Healthy Families Act of 2014 (“HWHFA”) and amends the state’s unpaid job-protected leave to include these additional reasons effective January 1, 2026. These amendments continue the state’s recent trend of annual updates to paid sick leave, which was significantly revised in 2024 and 2025.

The most recent changes add in an employee’s right to use paid sick leave and take protected unpaid leave if they or a family member are a victim of certain crimes and are attending judicial proceedings related to that crime. Such judicial proceedings include, but are not limited to, any delinquency proceeding, a post-arrest release decision, plea, sentencing, postconviction release decision, or any proceeding where a right of that person is an issue. The term victim in this specific covered reason is defined as a person against whom a violent felony, serious felony, and/or felony theft or embezzlement is committed, as well as a person who suffers direct or threatened physical, psychological, or financial harm due to the commission or attempted commission or specific crimes or delinquent acts.

The bill also amends the existing jury duty leave law, to remove the requirement that employees must provide reasonable notice prior to taking time off to serve on a jury. However, if an employee uses paid sick leave or unpaid job-protected leave for jury duty, the same notice standard applies for this covered reason as for other covered reasons of use under these provisions, i.e. reasonable advance notice unless advance notice is not feasible.

Additionally, AB 406 reinstates and amends repealed Labor Code sections 230 and 230.1, both of which only apply to alleged conduct occurring on or before December 31, 2024, and amends Labor Code sections 230.2 and 230.5 to apply only to alleged conduct occurring on or before December 31, 2025. These substance of these sections was included under 2024’s amended Government Code section 12945.8, which gave the Civil Rights Department enforcement authority over potential violations. AB 406 reinstates the Division of Labor Standards Enforcement’s authority to enforce potential violations effective October 1, 2025, but only until the respective sunset dates identified below.  

This bill amends Section 12945.8 of the Government Code, and amends Section 246.5 of, amends and repeals Sections 230.2 and 230.5 of, and adds and repeals Sections 230 and 230.1 of, the Labor Code.

Records Requirement Law

SB 513 – Personnel Records

SB 513 requires that personnel records relating to the employee’s performance include education and training records and require the employer ensure those records contain the following information: employee name, training provider name, the duration and date of the training, core competencies of a training – including skills in equipment or software – and the resulting certification or qualification.

This bill amends Section 1198.5 of the Labor Code.

Wage and Hour Laws

AB 692 – “Stay or Pay” Employment Contract Repayment Prohibition

AB 692 seeks to protect employee mobility by making unlawful contracts entered into on or after January 1, 2026, require the worker repay an employer a debt if the worker’s employment or work relationship terminates. The bill authorizes a private right of action and specifies civil penalties. This law exempts certain types of repayment agreements, including those involving tuition payments for transferable credits, discretionary bonuses or relocation payments, provided they meet set criteria. Depending on the subject matter of the repayment, required terms can include: (1) repayment terms must be in a separate agreement from the primary employment contract; (2) the worker must be advised of the right to consult an attorney and given at least 5 business days to do so before signing; (3) any repayment obligation for early separation must be prorated based on the remaining retention period (up to 2 years) and cannot accrue interest; (4) the worker must have the option to defer receipt of the payment until the end of the retention period without repayment obligation; and (5) repayment may only apply if the employee leaves voluntarily or is terminated for misconduct. Any person in violation of the prohibitions set forth in this bill shall be liable for the greater of a worker’s actual damages or up to $5,000 in penalties per worker, injunctive relief, and attorneys’ fees and costs.

This bill adds Section 16608 to the Business and Professions Code, and Section 926 to the Labor Code.

AB 751 – Rest Periods – Petroleum Facility Safety Sensitive Positions

AB 751, signed into law on July 14, 2025, indefinitely extends the exemption from rest period requirements for safety-sensitive positions at a petroleum facility and specifies that the exemption also applies to employees who hold a safety-sensitive position at a refinery that produces fuel through the processing of alternative feedstock. The exemption was previously slated to sunset on January 1, 2026.

This bill amends Section 226.75 of the Labor Code.

SB 648 – Enforcing Tip Theft

SB 648, signed into law on July 30, 2025, authorizes the Labor Commissioner to investigate and issue a citation or file a civil action for any gratuities taken or withheld by an employer.

This bill amends Section 351 of the Labor Code.

SB 693 – Exemption from Meal Period Requirements

SB 693, signed into law on July 30, 2025, expands the categories of employees exempt from the state’s meal period requirements to include employees of a “water corporation.” “Water corporation” is defined as “every corporation or person owning, controlling, operating, or managing any water system for compensation within this State.”

This bill amends Section 512 of the Labor Code.

SB 261 – DLSE Enforcement of Wage Judgments

SB 261 will subject an employer to a civil penalty of not more than three times the amount of an outstanding judgment if a final judgment arising from the employer’s nonpayment of work performed in this state remains unsatisfied after 180 days. The bill permits the employer to demonstrate by clear and convincing evidence that good cause exists to reduce the amount of the penalty. Any Court-assessed civil penalty would be distributed 50% to the employee and 50% to the Division of Labor Standards Enforcement (“DLSE”) for enforcement of labor laws. A prevailing employee will also recoup all reasonable attorney’s fees and costs incurred in enforcing the judgment.

This bill amends Section 98.2 of, and adds Sections 238.05 and 238.10 to, the Labor Code. 

SB 809 – Independent Contractors and Employee Vehicle Business Expenses

SB 809 provides, and states as declarative of existing law, that mere ownership of a vehicle, including a personal vehicle or a commercial vehicle used by a person in providing labor or services for remuneration does not make that person an independent contractor. The bill also provides, and states as declaratory of existing law, that the duty of an employer to indemnify its employees for reasonable business expenses, applies to the use of a vehicle owned by an employee and used by that employee in the discharge of their duties. The bill also establishes the “Construction Trucking Employer Amnesty Program” which relieves eligible construction contractors from liability for statutory or civil penalties from misclassification of drivers as independent contractors if the contractor executes a settlement agreement with the Labor Commissioner by January 1, 2029 that contains certain driver classification provisions.

This bill adds Sections 2750.9, 2775.5, and 2802.2 to the Labor Code.

AB 858 – Rehiring and Retention of Displaced Workers

As we discussed here and here, current law provides certain hospitality employees a right to rehire after being laid off for COVID-related reasons until December 31, 2025. AB 858 extends operation of these provisions to January 1, 2027, and allows DLSE enforcement of violations occurring before December 31, 2026 to be enforced after the revised sunset date.

This bill amends Section 2810.8 of the Labor Code.

AB 774 – Wage Garnishment

AB 774 requires employers to provide a levying officer with additional information in the employer’s return under the Wage Garnishment Law.

This bill amends, in relevant part, Code of Civil Procedure sections 706.021-022, 706.105, 706.126.

SB 294 – The Workplace Know Your Rights Act

SB 294 establishes the “Workplace Know Your Rights Act” under which an employer will be required to provide a stand alone written notice to each current employee as well as employees upon hire with certain workers’ rights, including workers’ compensation, immigration agency inspections, and law enforcement actions at the workplace. This obligation commences on or before February 1, 2026, and continues annually thereafter. The bill requires the Labor Commissioner to develop a template notice that must be available on or before January 1, 2026, and updated annually. The bill also requires, subject to an employee’s request, that the employer notify the employee’s designated emergency contact if the employee is arrested or detained at work. The bill carries an anti-retaliation provision and will be enforced by the Labor Commissioner with a penalty of $500 per employee per violation, except that the penalty for a violation of the emergency contact provision will be an amount up to $500 per employee for each day the violation occurs, up to a maximum of $10,00 per employee.

This bill adds Part 5.6 (commencing with Section 1550) to Division 2 of the Labor Code.

AB 1340 – Gig Workers

AB 1340 will allow transportation network company drivers to form, join, and participate in a union, collectively bargain as an industry-wide unit, and engage in concerted activities without impacting a drivers status as an independent contractor.

This bill adds Chapter 10.7 (commencing with Section 7470) to Division 3 of the Business and Professions Code, and adds Section 7927.710 to the Government Code.

SB 66 – Civil Discovery – Initial Disclosures

SB 66 removes the sunset date on the requirement in civil actions that initial disclosures be made within 60 days of a demand by any party.

This bill amends and repeals Section 2016.090 of the Code of Civil Procedure.

VETOED BILLS

SB 7 – Automated Decision Systems

The Governor vetoed SB 7 on October 13, citing various reasons including wanting to assess the efficacy of the forthcoming California Privacy Protection Agency regulations to address the concerns sought to be addressed by this bill. Read our summary of the AI employment discrimination regulations here. However, the Senate is reconsidering the Governor’s veto.

SB 7 would have required employers utilizing artificial intelligence (“AI”) “automated decision systems” (“ADS”) to make “employment-related decisions” to provide pre-use and post-use written notice of that use to all workers directly or indirectly affected by the ADS.

The pre-use notice for employment-related decisions, not including hiring, would have needed to be made (1) at least 30 days before an employer first deploys an ADS; (2) if an ADS is already in effect, by no later than April 1, 2026; and (3) within 30 days of hiring a new worker. A post-use notice issued after an employer has primarily relied on an ADS to make discipline, termination, or deactivation decisions would have needed to be made at the time the employer informs the employee of the decision, and allow employees to request a copy of the worker’s own data relied on in making such a decision. Employers would also have been required to notify a job applicant of the use of ADS in hiring decisions.

In addition to other prohibitions, employers would have been prohibited from relying solely on an ADS when making a discipline, termination or deactivation decision and are required to use a human reviewer to review the ADS output and other information relevant to the decision. The bill carries an anti-retaliation provision that would prohibit an employer from discharging or in any manner discriminating against any worker who asserts their rights under the bill. Under the bill, the Labor Commissioner would have had enforcement authority to issue citations and file civil actions against employers.  

This bill would have added Part 5.5.5 (commencing with Section 1520) to Division 2 of the Labor Code. 

SB 7 was the first significant employment-related bill to seek the Governor’s approval, with 2024 AI legislation also failing to make the cut, and a similar ADS bill, AB 1018, failing this legislative season. AB 1018 would have required employers to provide employees with disclosures regarding AI-driven decisions and to give employees a chance to appeal the decision. AB 2930 of 2024 also proposed regulating the use of ADS in employment practices, including pay, promotion, hiring, termination, and task allocation. At that time, we previewed an expectation of more action on this topic in years to come, as the Governor’s veto message on non-employment AI bill AB 1047 previewed. We similarly expect AI legislation in the employment space and beyond to continue.

AB 1326 – Right to Wear A Mask

AB 1326 would have provided individuals with the right to wear a medical grade mask in a public place to protect themselves or the public with regard to communicable disease, air quality, or other health factors. Employers would have been able to require workers in an employment setting to remove a health mask to perform their essential functions. Governor Newsom vetoed the bill as unnecessary and likely to cause confusion.

This bill would have added Chapter 26 (commencing with Section 28050) to Division 20 of the Health and Safety Code.

SB 1136 – Immigration and Work Authorization

SB 1136 would have required employers with greater than 25 employees to release an employee upon request for up to five unpaid working days in a 12-month period to attend appointments, interviews, or any other proceeding or meeting concerning the employee’s immigration status or a related matter. The bill would have required any employee whose employment is terminated due to an inability to provide documentation of proper work authorization to immediately be reinstated to their former classification without loss in seniority, subject to proper work authorization. An employer who is notified that an employee has been detained or incarcerated as a result of a pending immigration or deportation proceeding would have been required under the bill to place the employee on an unpaid leave of absence for a period not to exceed 12 months. The bill would have prohibited an employer from taking adverse action against an employee because of immigration status or national origin, or solely because the employee is subject to immigration or deportation proceedings.

This bill would have added and repealed Chapter 3.3 (commencing with Section 1019.6) of Part 3 of Division 2 of the Labor Code.

SB 703 – Ports: Truck Driver Independent Contractors

SB 703 would have required trucking companies and truck drivers not classified as employees by the company, to provide to the Port of Long Beach or Port of Los Angeles, certain information including the trucking company’s sworn affidavit that the company is withholding all required taxes from the wages of any driver who is considered an employee. The bill would have required the trucking company to update a port within 30 days of a change to its operation resulting in more than 50% of its employees being replaced by independent contractors and impose a $5,000 penalty for failure to do so. It would have imposed a $50,000 penalty for providing misleading information for purpose of representing compliance with the above requirements. Governor Newsom vetoed the bill because it “would significantly disrupt port operations by requiring these ports to collect and retain information on thousands of trucks each day.” The Senate is reconsidering the Governor’s veto.

This bill would have added Part 3 (commencing with Section 2000) to Division 6 of the Harbors and Navigation Code, and added Article 1.6 (commencing with Section 2790) to Chapter 2 of Division 3 of the Labor Code.

SB 355 – Notice Requirement for Judgment Debtor Employers

SB 355would have required that, within 60 days after a judgment is entered against an employer requiring payment to an employee or to the state, the employer inform the Labor Commissioner that: (1) the judgment is fully satisfied; (2) the bond required by subdivision Section 238(a) has been posted (if applicable); or (3) the judgment debtor has entered into an agreement for the judgment to be paid in installments. Failure to comply with these notice requirements would have resulted in a civil penalty of $2,500. The Governor vetoed this bill as “costly, duplicative, and unlikely to significantly improve collections of unpaid wages.”

This bill would have added Section 96.9 to the Labor Code.

Workplace Solutions

Tune in to our October 15, 2025 webinar in which we’ll explore the final slate of new laws. Please check back in with us here at Cal Peculiarities for regular check-ins on California policy and legislative updates.

Edited by: Catherine Feldman

Seyfarth Synopsis: On October 8, 2025, Governor Newsom signed into law SB 642, which amends California’s equal pay requirements, including revising the “pay scale” definition, extending the statute of limitations for equal pay claims to three years and permitting recovery for a period up to six years, and defining key terms such as “wages.” On October 13, 2025, Governor Newsom signed SB 464 into law, which significantly revises California employers’ annual pay data reporting obligations. These amendments go into effect January 1, 2026.

SB 642 brings several changes to California equal pay requirements under Labor Code Sections 432.3 and 1197.5 that will require careful review by employers and potential modification to current practices. While California’s Equal Pay Act has been one of the broader equal pay laws in the United States, the amendments to the Act are significant and heighten the risk of potential liability for employers. The amendments are intended to continue to decrease perceived pay inequities and make it easier to seek legal remedies for wage disparities. These revisions are effective January 1, 2026.

In comparison, SB 464 amends Government Code section 12999, which requires employers with 100 or more employees to submit annual pay data reports to California’s Civil Rights Department (CRD). The changes included in this bill address preservation of demographic data, and new reporting categories for the pay data reports.

Modified Definitions for Job Posting Pay Scales and Wages Subject to Equal Pay Act Requirements

SB 642 requires the pay scale on the posting to be the salary or hourly wage range the employer in good faith reasonably expects to pay “upon hire.” This definition may narrow the posted pay scale because the range should be the range the employer expects to pay to the candidate upon hire, instead of a broader range that some employers might have previously provided to cover the full range for the position.

The amendment also confirms that the definition of wages for equal pay claims aligns with federal Equal Pay Act standards and includes all forms of compensation, including benefits such as life insurance, vacation pay, holiday pay, and stock options, and bonuses. These latter categories can make up a significant portion of “wages” in some sectors. Despite this clarification in the equal pay context, there is no requirement for employers to include additional forms of compensation in the posted pay ranges.

Expanded Statute of Limitations

SB 642 extends the statute of limitations for civil actions to recover wages under the Section 1197.5 by one year. The statute of limitations is now three years after the last discriminatory pay act occurred. The amendments permit plaintiff to seek relief for the entire period of time during which a violation exists, but limits potential recovery to a period of up to six years.

The amendments also clarify that nothing prohibits the application of the “continuing violations” or “discovery rule” doctrines. The continuing violations doctrine allows employees to recover lost pay for ongoing discriminatory practices beyond the statute of limitations period by arguing that violations are similar and frequent, and thus should be considered a single act and not barred by the statute of limitations. Similarly, the discovery rule, delays the start of the statute of limitations until the point in time when the plaintiff knew or should have known of the discriminatory pay practice.

California’s Equal Pay Act expands the prohibition against sex discrimination to prohibit paying employees of another sex less for performing substantially similar work. Use of the phrase “another sex” replaces the previous use of “opposite sex” to remove binary gender references and make the language more inclusive.

Clarification of Cause of Action Accrual

SB 642 clarifies that a cause of action arises when any of the following actions occur:  

(1) an alleged unlawful compensation decision or other practice is adopted;

(2) An individual becomes subject to an alleged unlawful compensation decision or other practice; or

(3) When an individual is affected by application of an alleged unlawful compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from the decision or other practice.

Demographic Data Preservation Requirements

SB 464 clarifies that any demographic information gathered by employers or labor contractors for the purpose of submitting pay data reports must be stored separately from personnel records.

The demographic information that is collected for purposes of complying with reporting requirements includes data related to race, ethnicity, or gender.

New Reporting Categories for Pay Data Reports

Beginning with the 2026 reporting cycle (due May 2027), employers will be required to classify employees using 23 job categories from the Standard Occupational Classification (“SOC”) system—up from the 10 EEO-1 job categories used previously. This represents a significant expansion that will require employers to reassess how each job title is categorized for reporting purposes.

In prior years, most employers relied on the EEO-1 job categories used for their federal filings. Going forward, however, employers must align their workforce data with the 23 SOC-based job categories—a framework that may be unfamiliar to many organizations.

The shift introduces additional complexity and workload to a reporting obligation that is already viewed as burdensome, particularly with regard to the labor contractor reporting requirements. To prepare, employers will need to cross-walk legacy EEO-1 assignments to the new SOC categories, resolve edge-case roles that do not fit neatly into any classification, and manage year-over-year comparability issues that may no longer align with other required reports, including the EEO-1. For example, roles previously grouped under the broad “Professionals” category (such as lawyers, scientists, and architects) will now require separate categorization—further increasing administrative effort and the potential for inconsistency across filings.

The new categories apply to both payroll employees and labor contractor employees, which may require coordination with third-party labor contractors to ensure proper classifications are in place.

Mandatory Penalties for Non-Compliance with SB 464

Under the prior iteration of Government Code section 12999, courts were authorized—but not required—to issue penalties. Beginning in 2026, SB 464 requires courts to impose civil penalties against employers that fail to file a pay data report when requested by the CRD.

There is no change to the penalty amounts: up to $100 per employee for the first failure to file, and up to $200 per employee for each subsequent failure. The penalties may be apportioned to any labor contractors that fail to provide necessary pay data to an employer.

Workplace Solutions

Employers should familiarize themselves with the new requirements and definitions in SB 642 and SB 464, which includes ensuring all job posting contain compliant pay scale information, assigning all jobs to one of the 23 new job categories for the 2027 pay reporting cycle, updating reporting templates and data management procedures, and coordinating compliance with labor contractors Consult with the authors of this article or your favorite Seyfarth lawyer for guidance on your equal pay and pay reporting compliance strategies, and check back here at CalPeculiarities for updates on further developments in the equal pay landscape.

Edited by Catherine Feldman

Seyfarth Synopsis: To advance public safety and reduce retail theft, the Long Beach City Council has enacted the Grocery and Drug Store Staffing Standards for Self-Service Checkout Stations Ordinance. Effective September 21, 2025, this law imposes staffing requirements and restrictions on self-service checkout operations in Long Beach, California grocery and drug stores.

On August 12, 2025, the Long Beach City Council approved an ordinance establishing minimum staffing and oversight requirements for self-service checkout stations at the city’s grocery and drug retail establishments. The ordinance took effect September 21, 2025.

Who Is Covered?
The ordinance applies to the following Long Beach retailers:
• Drug Retail Establishment: A store selling prescription and nonprescription medicines and other merchandise such as groceries, beverages, dairy products, deli products, and sundries.
• Food Retail Establishment: A retail store either (1) over 15,000 square feet and primarily selling household foodstuffs; or (2) over 85,000 square feet with at least 10% of its sales floor area dedicated to the sale of non-taxable merchandise.

Staffing Requirements
Covered retailers must ensure the self-service checkout stations are staffed by:

  1. Assigning at least one employee to supervise the self-service checkout operation at all times the self-service checkout is operating.
  2. Ensuring that the assigned employee has no other work responsibilities that would interfere with their oversight of the self-service checkout operations.
  3. Maintaining a staffing ratio of one employee for every three self-service checkout stations, if the retailer operates multiple stations.

Policy Requirements
Covered retailers must establish a policy prohibiting customers from using a self-service checkout station to purchase items (i) that require proof of identification (i.e. alcohol and tobacco products); and (ii) that are subject to theft-deterrent measures (i.e. electronic article surveillance, ink, and items stored in locked cabinets).

Public Notice Requirement
Covered retailers must prominently post signage that:
• Links or provides a QR code to the City of Long Beach website on the ordinance.
• Summarizes the public’s rights under the law.
• Explains enforcement options.

Enforcement
Customers or employees may sue covered retailers in Superior Court for violations of this ordinance, and prevailing plaintiffs may be awarded civil penalties up to $1,000 per employee for each day the violation remains uncured, and attorneys’ fees and costs.

Workplace Solutions
Covered employers should review their staffing models and workplace policies to ensure compliance with this new ordinance. The authors or your favorite Seyfarth attorney are here to answer any questions you have about this Long Beach ordinance or any other California-specific employment laws.


Edited by: Catherine Feldman

Seyfarth Synopsis: The California Legislature concluded its 2024-2025 session in the wee hours of September 13, 2025, and sent the last of its approved bills to Governor Newsom for consideration. The Governor has until October 13 to approve or veto a variety of bills impacting employers in California.

The California Legislature put pencils down on September 13, 2025, and sent the last of its approved bills to Governor Newsom, who has until October 13 to decide which employment bills will become laws effective January 1, 2026.

According to Chris Micheli, about 1/3 of the almost 2,400 bills introduced this Session between the Senate and Assembly passed the Legislature and made their way to the Governor’s desk. The most significant bills for his consideration impacting employers address regulation of employers’ use of automated decision systems, extensions of meal and rest period exemptions for certain industries, policing tip theft, pay equity, and immigration rights.

Bills Already Signed Into Law

AB 751 – Rest Periods – Petroleum Facility Safety Sensitive Positions

AB 751, signed into law on July 14, 2025, indefinitely extends the exemption from rest period requirements for safety-sensitive positions at a petroleum facility and specifies that the exemption also applies to employees who hold a safety-sensitive position at a refinery that produces fuel through the processing of alternative feedstock. The exemption was previously slated to sunset on January 1, 2026.

This bill amends Section 226.75 of the Labor Code.

SB 646 – Enforcing Tip Theft

SB 648, signed into law on July 30, 2025, authorizes the Labor Commissioner to investigate and issue a citation or file a civil action for any gratuities taken or withheld by an employer.

This bill amends Section 351 of the Labor Code.

SB 693 – Exemption from Meal Period Requirements

SB 693, signed into law on July 30, 2025, expands the categories of employees exempt from the state’s meal period requirements to include employees of a “water corporation.” “Water corporation” is defined as “every corporation or person owning, controlling, operating, or managing any water system for compensation within this State.”

This bill amends Section 512 of the Labor Code.

Bills On the Governor’s Desk

AI-Related Bills (The Summary Could Write Itself…?)

SB 7 – Automated Decision Systems

SB 7 would require employers utilizing artificial intelligence (“AI”) “automated decision systems” (“ADS”) to make “employment-related decisions” to provide pre-use and post-use written notice of that use to all workers directly or indirectly affected by the ADS.

The pre-use notice for employment-related decisions, not including hiring, would need to be made (1) at least 30 days before an employer first deploys an ADS; (2) if an ADS is already in effect, by no later than April 1, 2026; and (3) within 30 days of hiring a new worker. A post-use notice issued after an employer has primarily relied on an ADS to make discipline, termination, or deactivation decisions would need to be made at the time the employer informs the employee of the decision, and allow employees to request a copy of the worker’s own data relied on in making such a decision. Employers would also be required to notify a job applicant of the use of ADS in hiring decisions.

In addition to other prohibitions, employers would be prohibited from relying solely on an ADS when making a discipline, termination or deactivation decision and are required to use a human reviewer to review the ADS output and other information relevant to the decision. The bill carries an anti-retaliation provision that would prohibit an employer from discharging or in any manner discriminating against any worker who asserts their rights under the bill. Under the bill, the Labor Commissioner would have enforcement authority to issue citations and file civil actions against employers.  

This bill would add Part 5.5.5 (commencing with Section 1520) to Division 2 of the Labor Code. 

SB 7 is the first significant employment-related bill to seek the Governor’s approval, with 2024 AI legislation also failing to make the cut, and a similar ADS bill, AB 1018, failing this legislative season. AB 1018 would have required employers to provide employees with disclosures regarding AI-driven decisions and to give employees a chance to appeal the decision. AB 2930 of 2024 also proposed regulating the use of ADS in employment practices, including pay, promotion, hiring, termination, and task allocation. At that time, we previewed an expectation of more action on this topic in years to come, as the Governor’s veto message on non-employment AI bill AB 1047 previewed. We similarly expect AI legislation in the employment space and beyond to continue.

There’s been action on the AI regulatory front this year as well. Read our summary of the AI employment discrimination regulations here.

Wage and Hour Bills

SB 261 – DLSE Enforcement of Wage Judgments

SB 261 would subject an employer to a civil penalty of not more than three times the amount of an outstanding judgment if a final judgment arising from  the employer’s nonpayment of work performed in this state remains unsatisfied after  180 days. The bill would permit the employer to demonstrate by clear and convincing evidence that good cause exists to reduce the amount of the penalty. Any Court-assessed civil penalty would be distributed 50% to the employee and 50% to the Division of Labor Standards Enforcement (“DLSE”) for enforcement of labor laws. A prevailing employee would also recoup all reasonable attorney’s fees and costs incurred in enforcing the judgment.

This bill would amend Section 98.2 of, and add Sections 238.05 and 238.10 to, the Labor Code. 

SB 355 – Notice Requirement for Judgment Debtor Employers

SB 355 would require that, within 60 days after a judgment is entered against an employer requiring payment to an employee or to the state, the employer inform the Labor Commissioner that: (1) the judgment is fully satisfied; (2) the bond required by subdivision Section 238(a) has been posted (if applicable); or (3) the judgment debtor has entered into an agreement for the judgment to be paid in installments. Failure to comply with these notice requirements would result in a civil penalty of $2,500.

This bill would add Section 96.9 to the Labor Code.

SB 809 – Independent Contractors and Employee Vehicle Business Expenses

SB 809 would provide, and state as declarative of existing law, that mere ownership of a vehicle, including a personal vehicle or a commercial vehicle used by a person in providing labor or services for remuneration does not make that person an independent contractor. The bill would also provide, and state as declaratory of existing law, that the duty of an employer to indemnify its employees for reasonable business expenses, applies to the use of a vehicle owned by an employee and used by that employee in the discharge of their duties. The bill would also establish the “Construction Trucking Employer Amnesty Program” which would relieve eligible construction contractors from liability for statutory or civil penalties from misclassification of drivers as independent contractors if the contractor executes a settlement agreement with the Labor Commissioner by January 1, 2029 that contains certain driver classification provisions.

This bill would add Sections 2750.9, 2775.5, and 2802.2 to the Labor Code.

AB 692 – Employment Contract Repayment Prohibition

AB 692 would, for contracts entered into on or after January 1, 2026, make it unlawful to require the worker pay an employer a debt if the worker’s employment or work relationship terminates. The bill would authorize a private right of action and specify civil penalties.

This bill would add Section 16608 to the Business and Professions Code, and Section 926 to the Labor Code.

AB 858 – Rehiring and Retention of Displaced Workers

As we discussed here and here, current law provides certain hospitality employees a right to rehire after being laid off for COVID-related reasons until December 31, 2025. AB 858 would extend operation of these provisions to January 1, 2027, and allows DLSE enforcement of violations occurring before December 31, 2026 to be enforced after the revised sunset date.

This bill would amend Section 2810.8 of the Labor Code.

SB 703 – Ports: Truck Driver Independent Contractors

SB 703 would require trucking companies and truck drivers not classified as employees by the company, to provide to the Port of Long Beach or Port of Los Angeles, certain information including the trucking company’s sworn affidavit that the company is withholding all required taxes from the wages of any driver who is considered an employee. The bill would require the trucking company to update a port within 30 days of a change to its operation resulting in more than 50% of its employees being replaced by independent contractors and impose a $5,000 penalty for failure to do so. It would impose a $50,000 penalty for providing misleading information for purpose of representing compliance with the above requirements.

This bill would add Part 3 (commencing with Section 2000) to Division 6 of the Harbors and Navigation Code, and to add Article 1.6 (commencing with Section 2790) to Chapter 2 of Division 3 of the Labor Code.

Leaves of Absence, Anti-Discrimination, and Pay Equity

SB 590 – Paid Family Leave – Designated Person

Continuing the “designated person” trend from prior years’ leave legislation, SB 590 would, beginning July 1, 2028, expand eligibility for benefits under the paid family leave program to include individuals who take time off work to care for a seriously ill “designated person.” The “designated person” definition aligns with the California Family Rights Act “designated person” definition, which includes any individual related by blood or whose association with the employee is the equivalent of a family relationship.

An employee would identify the designated person the first time they file a claim for family temporary disability insurance benefits to care for a designated person, and would be required to state under penalty of perjury, how they are associated with that person by blood or the equivalent of a family relationship.

This bill would amend, repeal, and add Sections 3301, 3302, and 3303 of the Unemployment Insurance Code.

SB 642 – Definition of Pay Scale  

Current law requires that employers make available the “pay scale” of a position to a candidate applying for that position. SB 642 would revise the definition of “pay scale” to mean a “good faith” estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire. The bill would also expand the statute of limitations to assert pay equity claims from two years to up to three years after the cause of action occurs, and allow recovery of lost wages for the entire time during which the violation occurred, up to six years. “Wages” and “wage rates” are defined in the bill as including, for purposes of Labor Code Section 1197.5 only, “all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.”

This bill would amend Sections 432.3 and 1197.5 of the Labor Code.

SB 464 – Employer Pay Data

SB 464 would require an employer to collect and store any demographic information gathered by an employer or labor contractor for the purpose of submitting the required pay data report to the Civil Rights Department (“CRD”) separately from employees’ personnel records, and would require a court to impose a civil penalty against an employer that fails to file the pay data report if requested to do so by the CRD. The bill would also, beginning January 1, 2027, increase the number of job categories on which the employer must report from 10 to 23.

This bill would amend, repeal, and add Section 12999 of the Government Code.

AB 250 – Extended SOL for Sexual Assault / Harassment Claims

AB 250 would extend the eligibility period for revival of claims seeking to recover damages suffered as a result of an alleged sexual assault that would otherwise be barred prior to January 1, 2026 because the applicable statute of limitations has or had expired. To revive sexual assault claims, including derivative claims for wrongful termination and sexual harassment, among others, the plaintiff must demonstrate  that one or more entities legally responsible for damages engaged in a cover up.

The bill defines a “cover up” as a “concerted effort to hide evidence relating to a sexual assault that incentivizes individuals to remain silent.” The bill would permit a cause of action for any such claim to proceed if already pending in court on the effective date of the bill or, if not filed by that date, to be commenced between January 1, 2026, and December 31, 2027.

This bill would amend Section 340.16 of the Code of Civil Procedure.

SB 1136 – Immigration and Work Authorization

SB 1136 would require employers with greater than 25 employees to release an employee upon request for up to five unpaid working days in a 12-month period to attend appointments, interviews, or any other proceeding or meeting concerning the employee’s immigration status or a related matter. The bill would require any employee whose employment is terminated due to an inability to provide documentation of proper work authorization to immediately be reinstated to their former classification without loss in seniority, subject to proper work authorization. An employer who is notified that an employee has been detained or incarcerated as a result of a pending immigration or deportation proceeding would be required under the bill to place the employee on an unpaid leave of absence for a period not to exceed 12 months. The bill would prohibit an employer from taking adverse action against an employee because of immigration status or national origin, or solely because the employee is subject to immigration or deportation proceedings. The bill’s provisions would be enforced by the Labor Commissioner.

This bill would add and repeal Chapter 3.3 (commencing with Section 1019.6) of Part 3 of Division 2 of the Labor Code.

SB 294 – The Workplace Know Your Rights Act

SB 294 would establish the “Workplace Know Your Rights Act” under which an employer would be required to provide a stand alone written notice to each current employee as well as employees upon hire with certain workers’ rights, including workers’ compensation, immigration agency inspections, and law enforcement actions at the workplace. This obligation would commence on or before February 1, 2026, and continue annually thereafter. The bill requires the Labor Commissioner to develop a template notice that must be available on or before January 1, 2026, and updated annually. The bill would also require, subject to an employee’s request, that the employer notify the employee’s designated emergency contact if the employee is arrested or detained at work. The bill carries an anti-retaliation provision and would be enforced by the Labor Commissioner with a penalty of $500 per employee per violation, except that the penalty for a violation of the emergency contact provision would be an amount up to $500 per employee for each day the violation occurs, up to a maximum of $10,00 per employee.

This bill would add Part 5.6 (commencing with Section 1550) to Division 2 of the Labor Code.

AB 1326 – Right to Wear A Mask

AB 1326 would provide individuals with the right to wear a medical grade mask in a public place to protect themselves or the public with regard to communicable disease, air quality, or other health factors. This right would not be construed as a limitation or modification of certain requirements for the removal of a health mask relating to, among other things, essential workplace functions, security identification protocols, or emergency health care protocols.

This bill would add Chapter 26 (commencing with Section 28050) to Division 20 of the Health and Safety Code.

Record Retention and Production Bills

SB 513 – Personnel Records

SB 513 would require that personnel records relating to the employee’s performance include education and training records and require the employer ensure those records contain the following information: employee name, training provider name, the duration and date of the training, core competencies of a training – including skills in equipment or software – and the resulting certification or qualification.

This bill would amend Section 1198.5 of the Labor Code.

Workplace Solutions

We will continue to keep you apprised through the October 13, 2025 bill signing deadline. Stay tuned for our end of session blog and sign up for our October 15, 2025 webinar in which we’ll explore the final slate of new laws. Please check back in with us here at Cal Peculiarities for regular check-ins on California policy and legislative updates.

Edited by: Catherine Feldman

On May 13, 2025, Cal/OSHA released a new discussion draft of its proposed regulation on Workplace Violence Prevention in General Industry. This latest version updates the July 15, 2024 draft we previously blogged about, and reflects stakeholder input gathered through the advisory committee process.

Key Proposed Revisions

Confronting Suspected Criminals

One of the most significant changes is the removal of the provision that prohibited employers from requiring employees to confront individuals suspected of committing a crime or engaging in workplace violence. In the July 15 draft, section (c)(10)(B) had stated:

“Employers shall not require or encourage employees to confront persons suspected of committing a criminal act or persons suspected of engaging in workplace violence.”

This entire subsection has been struck from the May 13 draft, signaling a shift away from what some stakeholders viewed as an overly restrictive operational mandate. The exception for dedicated security personnel, which had preserved confrontation authority for trained individuals, is no longer relevant.

Clarified Scope and Exemptions

Cal/OSHA has revised several exemptions to provide clearer applicability thresholds:

  • Employer size for exemption from the regulation is now proposed to be based on total headcount, not fluctuating staffing “at any given time,” addressing concerns about regulatory uncertainty.
  • Certain industries, including security, janitorial, and domestic work, are now proposed to be covered by the regulation, even if the workplaces are open to the public.

Clarified and Expanded Definitions

In response to concerns that the definitions of “engineering controls” and “work practice controls” in the earlier draft could be enforced as mandates, the definitions now include language to emphasize that not all listed controls are required.

However, the updated definition of “workplace violence hazards” creates new concerns for employers. The draft still includes examples of working conditions that Cal/OSHA would presumptively consider hazardous, such as “frequent or regular contact with the public,” “entries to places of employment where unauthorized access can occur,” and adds conditions that are based entirely on subjective determinations, such as “hostile work environments” and “inadequate staffing.”

The new draft also adds a definition of “authorized employee representative” for purposes of the regulation only, which means “an organization that has a collective bargaining relationship with an employer or an organization acknowledged by a public agency as representing its employees.” Similar to employees, authorized employee representatives are permitted to request records related to hazard identification, evaluation and correction, training, and violent incident logs.

Employee Reporting

The May 13 draft adds a provision that requires employers to provide a non-supervisory reporting channel for concerns about “type 3” workplace violence, violence by an employee against another employee, supervisor, or manager. Cal/OSHA made this change in response to stakeholder comments that expressed concern about potential suppression of reporting violent incidents when they involved an employee’s supervisor.

Record Retention Rules

Cal/OSHA’s advisory committee reorganized the Recordkeeping section, attempting to simplify the draft rule. Notably, the May 13 draft clarifies that all records required under the rule, except training records, must be kept for five years. Training records must be kept for at least one year.

Next Steps

The draft will likely continue evolving through Cal/OSHA’s advisory committee process before moving into formal rulemaking. In the meantime, employers should continue to implement their existing Workplace Violence Prevention Programs, but be mindful that updates will likely be required when Cal/OSHA’s Workplace Violence Prevention regulation is finalized.

Workplace Solutions

For more information on this or any related topic, please contact the authors, your favorite Seyfarth attorney, or any member of the Workplace Safety and Health Team.

Edited by: Cathy Feldman

Seyfarth Synopsis: On May 7, 2025, Cal/OSHA released a draft proposal to revise the outdoor and indoor heat illness prevention regulations (8 CCR Sections 3395 and 3396), aiming to implement requirements from AB 2243, signed by Governor Newsom at the conclusion of the 2021-22 legislative session. These proposed changes alter how employers must respond to heat hazards, and introduce new requirements for acclimatization, training, and plan distribution. Public comments are due by July 7, 2025.

Background

Signed into law in 2022, Assembly Bill 2243 directed Cal/OSHA to strengthen protections for outdoor workers exposed to heat and wildfire smoke. AB 2243 originally proposed an “ultrahigh heat” standard but was ultimately revised to focus on two main objectives for outdoor heat:

  1. Requiring Cal/OSHA to consider updates related to acclimatization and the distribution of Heat Illness Prevention Plans (HIPPs).
  2. Updating wildfire smoke protections for farmworkers, particularly the AQI threshold for mandatory respiratory protection. Cal/OSHA has yet to propose draft changes addressing this.

The proposed rulemaking released on May 7, 2025, reflects Cal/OSHA’s efforts to fulfill—and exceed—the bill’s first mandate: updating heat illness prevention standards. Notably, the proposed rulemaking includes changes to both outdoor and indoor requirements (T8 CCR §§ 3395 & 3396, respectively), even though AB 2234 only directed Cal/OSHA to update the outdoor requirements found in §3395.

Key Proposed Changes

Distribution of the HIPP – indoor and outdoor

Employers would be required to distribute their HIPP upon hire, during heat illness prevention training, and at least once a year to every covered employee. However, the draft language limits required distribution to no more than twice annually per employee.

Acclimatization – outdoor

Current regulations require close observation of employees newly assigned to a “high heat area.” The proposed rule updates that language to specify “high heat area” to mean any area where the temperature equals or exceeds 95°F, aligning it with the existing “high heat” threshold in subsection (e).

The proposal also introduces new acclimatization requirements for employees assigned to areas with temperatures of 80°F or higher. Employers would be required to either:

  • Implement high-heat procedures found in §3395(e) for five days, or
  • Adopt a phased acclimatization schedule for new employees, modeled after Fed-OSHA’s proposed heat rule:
    • Day 1: 20% exposure
    • Day 2: 40%
    • Day 3: 60%
    • Day 4: 80%
    • Day 5: 100%
  • For current employees returning after a break of more than 14 days, acclimatization would be limited to:
    • Day 1: 50%
    • Day 2: 60%
    • Day 3: 80%

This phased requirement would not apply if the employer can demonstrate that the employee had consistently worked under similar heat conditions within the past 14 days.

Acclimatization – indoor

For indoor environments, employers would have two options for new or returning employees in a work area where: (A) the temperature or heat index, whichever is greater, equals or exceeds 87 degrees Fahrenheit, (B) the temperature equals or exceeds 82 degrees Fahrenheit for employees who wear clothing that restricts heat removal, or (C) the temperature equals or exceeds 82 degrees Fahrenheit:

  1. Apply the “assessment and control measures” section of the indoor heat standard found in §3396(e)(2) (excluding engineering controls found in §3396(e)(2)(A)) for five days, or
  2. Follow the same phased acclimatization schedules described above.

The same exception applies indoors as outdoors: employers can opt out of acclimatization if the employee consistently worked under comparable heat conditions during the prior 14 days.

What’s Next?

Comments on the draft proposal are due by July 7, 2025, and can be submitted to:

  • eberg@dir.ca.gov
  • jlandaverde@dir.ca.gov

An advisory committee meeting will be scheduled by Cal/OSHA at a later date. AB 2243 requires the Cal/OSHA standards board to “consider” adopting revised rules by December 31, 2025, but does not contain a deadline for the Board to adopt the rules.

For more information on this or any related topic, please contact the authors, your Seyfarth attorney, or any member of the Workplace Safety and Health Team.

California Employers, Watch For Sharp Turns Ahead

If you operate a business in California, you know how difficult it is to keep up with ever-changing legal trends. California employers should review and refresh their workplace postings each year to keep up with legislative changes and annual minimum wage increases. Various California state agencies, including the Department of Industrial Relations (“DIR”), Civil Rights Department, Cal/OSHA, and local municipalities require employers to post information in an area frequented by employees where it may be easily read during the workday. Here are the signs you can’t ignore in California:

  1. California Minimum Wage: Employers must maintain a posting regarding the applicable state minimum wage, which increases practically every year. As of January 1, 2025, the minimum wage in California is $16.50/hour.
  2. Industrial Welfare Commission Wage Order: Employers must post the Wage Order applicable to their business type. The good news is that the DIR has published an index of businesses and occupations intended to help employers determine which Wage Orders are right for them.
  3. Payday Notice: Employers must also display a Payday Notice informing employees of their regular payday. Employers can use the template created by the state or create their own notice that clearly conveys to employees when and where they will receive their wages.
  4. Healthy Workplaces, Healthy Families Act of 2014 – Paid Sick Leave: All employers must maintain a posting alerting employees to their paid sick leave entitlement under the Healthy Workplaces, Healthy Families Act of 2014. California substantially amended its paid sick leave law in 2024, and the DIR published an updated poster. As we previously detailed, additional legislative paid sick leave changes went into effect January 1, 2025.  However, these changes are not captured in the current poster.
  5. Family Care & Medical Leave & Pregnancy Disability Leave: Employers with 50 or more employees (and public agencies) must maintain a poster advising employees of their rights to job-protected leave under the California Family Rights Act (though note that CFRA applies to employers with at least 5 employees!). The poster covers the reasons for use of CFRA leave, and employees’ right to pregnancy disability leave under California’s Fair Employment and Housing Act (FEHA).
  6. Emergency Contact Information: The DIR also requires California employers to display an emergency services contact sign. The sign must include phone numbers for fire, police, and medical services.
  7. Time Off to Vote:  Not less than 10 days before every statewide election, employers must post a notice advising employees of their right to take time off to vote.
  8. Safety and Health on the Job: Employers are required to display a poster that outlines basic requirements and procedures to comply with Cal/OSHA workplace safety and health standards. Additional health and safety related posters are required for employees who work with hazardous/toxic substances.
  9. Injuries Related to Work: Employers must post a notice that advises employees of their right to workers’ compensation benefits, how to apply for those benefits, and the contact information for the employer’s workers’ compensation insurance carrier (or a statement that the employer is self-insured).
  10. Whistleblower Protections: Employers must display a poster that explains the California whistleblower law protections, who is protected, and includes  the telephone number of the whistleblower hotline maintained by the California Attorney General. The law requires that the poster be in lettering larger than size 14-point type.
  11. No Smoking: Employers must also have signs indicating  where smoking is prohibited and permitted on Company property. Additional information can be found on the DIR’s web site.
  12. Summary of Occupational Injuries and Illnesses: California employers with 11 or more employees must post Form 300A from February 1st to April 30th. This Form summarizes the total number of work-related injuries and illnesses that occurred in the previous year, including  the total number of cases, days away from work, and types of injuries or illnesses. Other required occupational injury and illness forms are published on the Cal/OSHA website.
  13. California Law Prohibits Workplace Discrimination: This required poster informs employees of their rights under FEHA. It includes information on protections against discrimination and harassment based on protected categories including in part race, color, national origin, age, religion, sex, sexual orientation, gender identity, gender expression, disability, medical condition, marital status, and military or veteran status. As we previously wrote, effective January 1, 2025, the intersection or combination of protected characteristics are expressly protected from discrimination. This poster has been updated to include intersectionality.
  14. Transgender Rights in the Workplace: In addition to the general non-discrimination poster, California employers must maintain a poster that informs employees of their protections against discrimination, harassment, and retaliation based on gender identity or gender expression.
  15. Notice to Employees Regarding Unemployment Insurance (UI), State Disability Insurance (SDI), and Paid Family Leave (PFL): This required poster informs employees of their rights and benefits under California’s UI, SDI, and PFL programs. It includes links to the Employment Development Department where employees can obtain information and file benefit claims.
  16. Notice to Employees Regarding UI Benefits: This poster informs employees about their right to unemployment benefits, including who is eligible, how to file a claim, and the benefits available.
  17. Proposition 65: Proposition 65 mandates that employers with 10 or more employees provide “clear and reasonable” warnings to Californians about significant exposures to chemicals that cause cancer, birth defects, or other reproductive harm. If employees may be exposed to chemicals on the Proposition 65 list at the workplace, employers may be required to post or otherwise distribute a warning.

Federal Workplace Posting Zone

In addition to California’s required postings, federal law requires employers to post certain notices.

  1. Occupational Safety and Health Act (OSHA) Job Safety and Health “It’s the Law”: Employers are required to display a poster informing employees of their rights to a safe workplace and to report work-related injuries, employers’ obligation to provide a workplace free of known hazards, and other OSHA protections.
  2. Federal Minimum Wage: Employers with employees covered by the Fair Labor Standards Act, must display a poster including the federal minimum wage.
  3. Equal Employment Opportunity Commission “Know Your Rights”: In addition to state anti-discrimination laws, employers are also required to have a poster that describes the federal protections against discrimination, harassment, and retaliation. The “Know Your Rights” poster also includes information regarding non-discrimination obligations for federal contractors.
  4. Federal Family and Medical Leave Act (FMLA): Employers must have a poster describing employee’s right to 12 weeks of job-protected leave for specific family, medical, and military-related reasons under the FMLA.
  5. The Uniformed Services Employment and Reemployment Rights Act: This required poster informs employees of their protections against discrimination based on their current or former military service status and their right to reemployment following military leave.
  6. Federal Employee Polygraph Protection Act: Under this Act most private employers must have a poster publicizing that employers are generally prohibited from requiring or requesting an employee or job applicant take a lie detector test as part of their pre-employment screening or during the course of employment. 

Additional Requirements Ahead

This list is not exhaustive. In addition to the California and federal required posters, there are additional required workplace notices for federal contractors, certain industries, specific types of employees, and employers whose employees face certain unique hazards. Local municipalities (particularly within California) have their own workplace posting requirements regarding things like local minimum wage, local paid sick leave and predictive scheduling ordinances.  

Workplace Solutions

With the overlapping layers of state and municipal laws and frequent changes to the law, it can be difficult to keep up with the latest requirements. Fortunately, Seyfarth’s California Employment Law Lookout Blog and Cal Peculiarities Blog are here to help. Sign up to stay up-to-date on the latest trends. We will keep you posted.

Seyfarth Synopsis: The 2028 Los Angeles Olympics is already bringing change to the city. On December 11, 2024, the Los Angeles City Council voted 12-3 to approve a draft ordinance to amend the Living Wage Ordinance and the Hotel Worker Minimum Wage Ordinance in 2025.  If the City Council approves of the City Attorney’s draft ordinance, the proposed wage increases will make a splash across the tourism industry leading up to the Games.

Update: Although the Los Angeles City Council passed the “Olympic Wage Ordinance” on May 23, 2025, on May 30, 2025, the Office of the City Clerk approved a referendum against the ordinance. A petition signed by 92,998 registered City of Los Angeles voters was timely filed with the City Clerk on June 27, 2025. It remains to be seen if the petition will pass the verification process and whether voters will have the opportunity to vote on whether to uphold or repeal the ordinance.  

The ordinance, dubbed the “Olympic Wage Ordinance,” would amend the Los Angeles Living Wage Ordinance (LWO) and the Hotel Worker Minimum Wage Ordinance (HWMO) to increase minimum wages for eligible employees incrementally each year up to $30 per hour by July 2028, just in time for the 2028 Los Angeles Olympics.

Who On The Team Is Covered?

The proposed Olympic Wage Ordinance would cover many Los Angeles tourism workers, including concessionaires, skycaps, and cabin cleaners, among others. Employees at hotels with at least 60 rooms would also benefit from the Ordinance.

Minimum Wage Timeline

Under the proposed ordinance, eligible employees will take the gold with a minimum wage of $30 by 2028. 

The Olympic Wage Ordinance would increase hotel and airport workers’ minimum wage by $2.50 each year as follows:

  • $22.50 an hour on July 1, 2025
  • $25.00 an hour on July 1, 2026
  • $27.50 an hour on July 1, 2027
  • $30.00 an hour on July 1, 2028

Healthcare Benefits

Beginning July 1, 2025, eligible airport workers would also receive an increase in healthcare payments from the current $5.95 per hour to $8.35 per hour.  Eligible hotel workers would be granted the same healthcare payment. The healthcare benefit payment will increase each year on July 1 with new rates announced on April 1.  Under the draft Ordinance, the healthcare benefit payment will increase proportionately by the percentage increase in the California Department of Managed Healthcare’s Large Group Aggregate Rates report of each year, if at all.

Hardship and Right-to-Cure

The Olympic Wage Ordinance includes a hardship exemption clause to the LWO for concessionaires with 50 or less employees at LAX who already have a lease at the time of the passage of the ordinance. However, there is currently no exemption for covered hotels. 

The proposed Ordinance also includes a right-to-cure provision.  An employee can only file a complaint if (1) the employee first provided written notice to the employer outlining the alleged violations; and (2) the employer takes no action to cure the alleged violation within 30 days of receipt of the written notice. If the employer does not take sufficient timely action, the employee can then file an administrative complaint with the Los Angeles Office of Wage Standards or in court.

Workplace Solutions

While there is not a formal Olympic Wage Ordinance yet, it is anticipated that it will be finalized in early 2025—in time for the July 1, 2025 increase. If approved, the Ordinance will have a significant impact on Los Angeles’ tourism workforce.  Employers should reach out to their favorite Seyfarth attorney to help prepare to comply with the new wage and benefits rules by July, and check back with us here at CalPeculiarities for more developments in this area.

Edited by: Cathy Feldman

Update: On December 2, 2024, California updated its Paid Sick Leave Frequently Asked Questions, which address the expanded reasons for use of California paid sick leave detailed below. 

Seyfarth Synopsis:  Out with the old and in with the new.  Governor Newsom recently signed new laws which extend and clarify employees’ available reasons for use of California paid sick leave.  There are expanded unpaid leave protections for victims of domestic violence, sexual assault, stalking, or qualifying acts of violence, as well as for employees summoned to jury duty or responding to a subpoena or court order to testify under FEHA.  The changes go into effect on January 1, 2025.  

As we previously detailed, in 2023, the California legislature significantly expanded the state’s Healthy Workplaces, Healthy Families Act of 2014 (HWHFA), primarily by providing more leave.  This year, Governor Newsom signed bills into law that expand paid sick leave protections. 

Preventative Care for Outdoor Workers

In the last few years, California employment laws have zeroed in on extreme conditions.  For example, Cal/OSHA implemented heat illness standards, and employees cannot be retaliated against for refusing to report to work in emergency conditions.  In this vein, SB 1105  provides that agricultural employees who work outside may use PSL to avoid smoke, heat, or flooding conditions created by a local or state emergency, including when a worksite is closed due to these conditions.  The legislature considered this a clarification of the HWHFA’s provision that PSL can be used for preventive care even though the previous FAQs did not contemplate this definition.  

Victim Status Extended And PSL Used As Safe Time 

SB 1105 and AB 2499 collectively brought more expansive changes. Existing law provides for using PSL where there is domestic violence, sexual assault, and stalking; it will now be available to victims of “qualifying acts of violence,” i.e., conduct, or patterns of conduct that justify safe time, including when:

  1. an individual causes bodily injury or death to another individual;
  2. an individual exhibits, draws, brandishes, or uses a firearm, or other dangerous weapon, with respect to another individual; and
  3. an individual uses, or makes a reasonably perceived or actual threat to use, force against another individual to cause physical injury or death. 

PSL Available If A Family Member Is A Victim 

The HWHFA previously limited use of PSL for safe time to when an employee was a victim.  The combination of SB 1105 and AB 2499 extends this category of leave to employees whose family members are victims as well.  (And, as a reminder, as of January 1, 2023 the HWHFA’s definition of “family member” was expanded to include a “designated person” of the employee.)

More Reasons To Use PSL 

Previously, an employee-victim could only use PSL for their own reasons (not to assist a family member) in a handful of specific categories.  AB 2499 extends existing rights to take time to obtain restraining orders, seek medical attention, obtain certain services or counseling and participate in safety planning to family members.  It also creates new explicit rights to take time for relocation, enrolling children in a new school, obtaining legal services, participating in legal proceedings and obtaining childcare in connection with qualifying acts of violence.

The law also allows employees to use paid sick leave for time spent serving on a jury or a victim who takes time off to appear as a witness in court in compliance with a subpoena or court order.

Protecting Leave For Jury Duty, Victims, And Subpoenaed Witnesses Under FEHA

Previously the California Labor Code afforded unpaid leave protections for jury duty, victims serving as witnesses in compliance with a subpoena or court order, and victims of domestic violence, sexual assault, stalking, or crimes.  AB 2499 reformulates these protections under the umbrella of the Fair Employment Housing Act.  This shift gives the Civil Rights Department (“CRD”) enforcement authority over violations of these protections, and eliminates potential Private Attorneys’ General Act claims for such violations.

This move came with additional changes, including limiting the duration of leave employers with at least 25 employees must provide.  First, a victim of a qualifying act of violence may take no more than 12 weeks of unpaid leave.  Second, if an employee’s family member is a victim of a non-fatal crime, and the employee takes leave for the limited purpose of relocating or securing a new residence and enrolling a child in a new school or child care, the employee may take no more than 5 days of leave.  Third, when an employee’s family member is a victim of a non-fatal crime, the employee may take no more than 10 days of leave.

Absences that would also qualify under the Family and Medical Leave Act (FMLA) or CFRA must run concurrently if the employee is eligible. 

AB 2499 also expands eligibility for reasonable accommodations to include employees who are victims, or whose family members are victims of a qualifying act of violence to ensure the safety of the employee while at work. 

Required Notice

Employers must inform employees of their rights under AB 2499 at the time of hire, annually, upon request, and if an employee provides notice that their family member is a victim as defined under the law. 

The CRD has published a model notice that complies with these notice requirements.

Workplace Solutions

As AB 2499 and SB 1105 go into effect in less than three months, here are some next steps for employers to consider:

    • Review existing leave policies and practices to ensure compliance with the new laws, including related attendance, conduct, anti-retaliation, and discipline policies and practices.

    • Train supervisory and managerial employees, and HR on the new requirements.

    • Develop a form to comply with the notice requirements to use in advance of the CRD’s development of a form.

Seyfarth is here to help employers with solutions and recommendations to comply with California and nationwide paid leave requirements. Check out the CalPeculiarities Blog for updates on other laws affecting California employers.

Edited by Elizabeth Levy