Seyfarth Synopsis: On August 14, 2026, Cal/OSHA released a revised discussion draft of proposed changes to California’s heat illness prevention standards included in Section 3395 (Outdoor Heat Illness Prevention) and Section 3396 (Indoor Heat Illness Prevention). The proposal continues Cal/OSHA’s effort to implement AB 2243, which was signed into law in 2022, while making California’s indoor and outdoor heat standards more consistent in structure and terminology. Although many of the revisions are intended to harmonize the two standards, the draft also contains substantive changes that could significantly affect compliance obligations, including an expansion of outdoor high-heat procedures and new acclimatization requirements for newly-assigned and returning employees. Comments on the discussion draft are due September 21, 2026. Some like it hot—but Seyfarth is here to prepare employers for the rising temperatures. Keep reading for everything employers need to know about the August 2026 draft.

Background

It’s been a long, hot summer, or really summers, as Cal/OSHA continues to modify its proposed revisions to California’s heat illness prevention regulations. As we previously discussed, in May 2025, Cal/OSHA released its first proposed revisions as part of its effort to implement AB 2243. Among other things, AB 2243 directed Cal/OSHA to consider revisions relating to heat illness prevention plans and acclimatization requirements. Although AB 2243 focused primarily on the outdoor heat standard, Cal/OSHA elected to review both the outdoor and indoor regulations. Following stakeholder comments and advisory committee discussions, Cal/OSHA released a substantially revised draft on August 14, 2026.

It’s Getting Hot Out There: Expanded Outdoor High-Heat Procedures

Perhaps the most scorching proposal in the August 2026 draft is the elimination of an existing limitation on Section 3395’s outdoor high-heat procedures, which currently only apply to employers in specified industries, including agriculture, construction, landscaping, oil and gas extraction, and certain transportation operations. The August 2026 proposal extends high-heat requirements to a broad range of outdoor employers whenever temperatures reach 95 degrees Fahrenheit. For employers previously not subject to California’s high-heat requirements, this change could have a significant practical impact.

Soak Up the Sun (Slowly): Expanded Acclimatization Requirements

The August 2026 proposal adds more well-defined acclimatization requirements. Under California’s current regulations, employers must closely observe newly assigned employees during specified periods of elevated heat exposure. The August 2026 draft retains and expands concepts first introduced in the May 2025 proposal by addressing both newly assigned employees and employees returning to work after an absence exceeding 14 days.

Under the proposal, employers would have two options when assigning unacclimatized employees to covered heat conditions. Employers could:

  • Implement enhanced protective measures and close observation procedures; or
  • Phase employees into heat exposure through prescribed exposure schedules.

California isn’t walking on the sun alone. The proposed changes mirror acclimatization provisions in Oregon’s heat illness rule as well as federal OSHA’s proposed heat illness rule.

Although the precise details may continue to evolve during the rulemaking process, the broader message from Cal/OSHA is clear: employers should anticipate greater scrutiny of acclimatization practices.

Clear Instructions Even During a Cruel Summer: Distribution of Heat Illness Prevention Plans

The August 2026 draft retains one of the most notable additions from the May 2025 proposal: affirmative requirements for distributing Heat Illness Prevention Plans (HIPPs).

Cal/OSHA wants every employee to have their own pocketful of sunshine—a HIPP within arm’s reach. Under the proposed language, employers would be required to distribute HIPPs to employees upon hire, during heat illness prevention training, and at least once annually. The proposal clarifies that employers would not be required to distribute the plan to the same employee more than twice each year and would permit electronic posting and distribution in certain circumstances.

Heating Up The Focus on Heat Illness Recognition

The August 2026 draft also continues Cal/OSHA’s effort to align definitions and terminology between the indoor and outdoor standards. Among other changes, the proposal includes rhabdomyolysis within the definition of heat illness, adds supplements and recreational drugs to the list of personal risk factors, and creates a more detailed and consistent description of heat illness signs and symptoms across both regulations. Although these revisions may not dramatically alter day-to-day compliance obligations, employers may ultimately need to update training materials, written programs, and educational resources if the August 2026 proposal moves forward substantially as drafted.

More Heat on the Horizon?

Just like a California summer, Cal/OSHA’s efforts aren’t cooling down anytime soon. Additional revisions may be made to the August 2026 proposal following the public comment period before Cal/OSHA initiates formal rulemaking under California’s Administrative Procedure Act. Interested stakeholders have until September 21, 2026 to submit comments.

Workplace Solutions

If adopted as-is, the August 2026 proposal would significantly expand employers’ existing heat-related obligations and create additional requirements. But don’t sweat it, the authors, your favorite Seyfarth attorney, or any member of the Workplace Safety and Environment Team are here to advise on the August 2026 draft and any future iterations.

Edited By: Catherine Feldman

Seyfarth Synopsis: San Francisco just delivered a bundle of joy for new parents. The city reduced the employment tenure requirement under its Paid Parental Leave Ordinance from 180 days to 90 days, meaning eligible employees can start accessing employer-paid supplemental compensation benefits faster. Covered employers may want to start baby-proofing their policies now, ahead of phased-in compliance beginning January 1, 2027.

New parents in San Francisco have a reason to celebrate. On August 7, 2026, the mayor signed Ordinance 162-26, reducing the amount of time an employee must be on the job before qualifying for supplemental compensation benefits under the city’s Paid Parental Leave Ordinance (“SF PPLO”). Instead of waiting 180 days, employees can qualify after 90 days, bringing the ordinance in line with the city’s Paid Sick Leave Ordinance.

As a quick refresher, the SF PPLO requires employers with 20 or more employees (located anywhere) to “top up” an eligible employee’s California Paid Family Leave (“CA PFL”) benefits during new child bonding leave. In other words, the ordinance helps bridge the gap between what the State pays and an employee’s regular wages (up to a maximum cap), ensuring parents can focus less on finances and more on midnight feedings, diaper changes, and everything else that comes with welcoming a new family member. For 2026, the combined maximum weekly benefit amount from CA PFL benefits and employer-paid supplemental compensation is $2,522.

This amendment may be taking its first steps, but it is not changing much else. Employees still must work at least eight hours per week in San Francisco, perform at least 40% of their total weekly hours in the city, and otherwise qualify for CA PFL benefits for new child bonding leave. Like many toddler developments, the ordinance’s rollout will happen in stages rather than all at once. Employers with 100 or more employees must comply with the new 90-day eligibility threshold beginning January 1, 2027. Employers with 20 to 99 employees get a little more time to crawl before they walk, with compliance delayed until January 1, 2028. Employers with fewer than 20 employees remain exempt.

Workplace Solutions

Covered employers should not sleep on this update, even if new parents might not be getting much sleep themselves. Now is the time to revisit paid parental leave policies, update eligibility procedures, and monitor the SF PPLO webpage for updated guidance, posters, and forms. With the shortened waiting period, more employees will be eligible for benefits sooner. The authors or your favorite Seyfarth attorney are here to help make sure your policies are ready before this amendment leaves the crib and starts walking.

Also, please consider this your friendly reminder that handbook season is just around the corner. Whether your handbook needs a quick checkup or a full nursery-to-college makeover, Seyfarth’s Handbook Team is ready to help. Additionally, be on the lookout for details about Seyfarth’s Employee Handbook Update Webinar, where we’ll cover the latest developments. After all, when it comes to workplace policies, it’s always better to baby-proof now than scramble later!

Edited By: Catherine Feldman

Seyfarth Synopsis:  For California employers, compliance with the Fair Chance Act (FCA) is not a game. In recent years, the California Civil Rights Department (CRD) has stepped up its investigations into complaints of FCA violations, and employers who don’t know the rules risk landing on a chute at every turn. Read on for our guide to navigating compliant background check practices and staying ahead of CRD enforcement.

The stakes are getting higher for California employers, who are seeing an increase in charges filed with the California Civil Rights Department (CRD) alleging violations of the California Fair Chance Act (FCA). This trend follows the CRD’s expanded regulations governing the use of criminal history in employment decisions, which became effective October 1, 2023, and reflects the agency’s heightened focus on FCA compliance in response to complaints filed by applicants and employees. Make no mistake, the CRD is not handing out Get Out of Jail Free cards.

Continue reading for an overview of the rules of the game, including the FCA legal framework, compliance areas the CRD typically examines when FCA charges are filed, and steps employers can take to prepare for and defend against these inquiries.

The Fair Chance Act Rulebook and the 2023 Regulatory Clarifications

The FCA generally requires California employers to:

  • Delay inquiry into or consideration of criminal history until after a conditional offer of employment—this includes ordering a criminal history background report;
  • Conduct an individualized, job‑related assessment before rejecting an applicant based on criminal history; and
  • Follow a two‑step notice process—a preliminary determination notice and a final determination notice—when taking action based on criminal history, regardless of how the information is obtained.

Regulatory amendments approved in 2023 clarified and expanded several key compliance obligations, including:

  • Expanding the definition of “applicant” to include certain current employees whose criminal history is reviewed due to changes in ownership, management, policies, or practices.
  • Reaffirming that employers may not include language in job advertisements or postings suggesting that individuals with criminal histories will not be considered.
  • Prohibiting employers from considering voluntarily disclosed criminal history prior to a conditional offer.
  • Clarifying that exemptions for legally mandated background checks apply only when the employer itself is required by law to conduct the check.
  • Requiring an initial individualized assessment before issuing a preliminary decision notice.
  • Expanding the categories of mitigating and rehabilitative evidence employers must consider, including trauma, disability‑related circumstances, and evidence of rehabilitation.

Time to Show Your Cards: What the CRD Looks for When a Charge Lands

When an applicant or employee files a charge alleging an FCA violation, the CRD’s investigation commonly extends beyond the narrow factual allegation to examine whether the employer complied with related FCA requirements across the board. In those investigations, the CRD typically focuses on the following areas:

1. Timing of Criminal‑History Inquiries

    The CRD routinely evaluates whether the employer rolled the dice before their turn and made any inquiry—directly or indirectly—into criminal history before making a conditional offer of employment, including:

    • Questions on employment applications
    • Interview conversations
    • Informal recruiter or hiring‑manager inquiries
    • Reliance on information volunteered too early in the application process

    1. Individualized Assessments

      The FCA does not require an employer to document its assessment. But, like a game of Clue, the CRD expects employers to show their winning strategy, and frequently requests documentation demonstrating that the employer:

      • Conducted the required initial individualized assessment before issuing a preliminary decision notice;
      • Considered each of the three statutory factors (i.e., the nature and gravity of the offense or conduct, the time that has passed since the offense, conduct, or completion of sentence, and the nature of the job sought or held)s; and
      • Connected the assessment to the actual duties and risks of the position.

      2. Notice and Response Procedures

        The CRD commonly examines whether:

        • The preliminary and final determination notices included all required materials, including the conviction‑history report and a statement that the individual has the right to file a complaint with the CRD;
        • The applicant or employee was afforded the full response period required by regulation; and
        • The employer refrained from making a final decision before the response period expired.

        3. Consideration of Mitigating or Rehabilitative Evidence

          When an applicant plays a new card—submitting mitigating or rehabilitative evidence—employers must factor it into their next move. Investigators often assess whether the employer:

          • Accepted and evaluated all mitigating or rehabilitative information submitted;
          • Conducted and documented a meaningful reassessment; and
          • Considered trauma‑related, disability‑related, or other mitigating factors where applicable.

          4. Consideration of Convictions Older than Seven Years

            Although California law permits employers to consider convictions older than seven years—outside the City and County of San Francisco and unincorporated areas of Los Angeles County—doing so can be a risky gambit as the CRD frequently asks whether the employer relied on older convictions.

            These inquiries reflect the CRD’s publicly stated position, including guidance posted on its website, prohibiting reliance on older criminal records. Employers should be prepared to articulate and document why consideration of an older conviction was job‑related and consistent with business necessity. The CRD will expect a heightened showing of job-relatedness.

            Your Next Move: Getting Ahead of the Charge

            The best defense is a good strategy. Employers facing an FCA charge—or seeking to reduce future exposure—should consider the following moves:

            1. Check the Board: Audit Criminal‑History Decision‑Making Processes

              Review job postings, applications, interview materials, recruiter scripts, conditional offer letters, and pre-adverse (preliminary determination) and adverse action (final determination) templates to ensure compliance with FCA requirements.

              2. Play the Right Cards: Strengthen Documentation of Individualized Assessments

                Use job‑specific assessment tools that address the three required factors and prompt decision‑makers to consider rehabilitation and mitigation evidence.

                3. No Skipped Turns: Ensure Compliance with Notice and Timing Requirements

                  Confirm that notices include required attachments and language, response deadlines are properly calculated, and reassessments are documented.

                  4. Teach the Rules: Train Recruiters, HR, and Hiring Managers

                    Training should focus on prohibited inquiries, handling volunteered information, and the required assessment and notice procedures.

                    The Endgame

                    An FCA charge can trigger searching inquiries into how an employer evaluates criminal history and implements required assessment and notice procedures. Don’t wait until the other player sits down at the board. Employers should ensure their practices are well‑documented, consistently applied, and aligned with the current regulatory framework — before the CRD takes a look first.

                    Workplace Solutions

                    Don’t roll the dice and hope to avoid scrutiny of your background check practices.If you need help navigating FCA compliance or an FCA CRD charge, the author of this article or your favorite Seyfarth lawyer are here to help employers develop a winning strategy.

                    Edited By: Catherine Feldman

                    By: Heather Frisch, Christopher Bouquet, and Ashley Stein

                    Seyfarth Synopsis:  As of January 1, 2026, AB 889 bulldozed California’s Prevailing Wage law, which impacts public works employers—including public agencies, the contractors that work for them, and private owners and developers whose projects may be subject to public works requirements. The amended law reframes the calculation of fringe benefits for individuals who work on public works project and mandates annualization of such benefits, demolishes the practice of frontloading these benefits, and requires employers to maintain inspection-ready records of compliance.   

                    This year, AB 889 significantly revised California’s prevailing wage law, codified at Labor Code section 1773.1, to clarify the state’s prevailing wage regulations and streamline enforcement. Accordingly, as of January 1, 2026, California public works employers are required to annualize employees’ fringe benefits and maintain specific documentation demonstrating statutory compliance. These new obligations impact public agencies and their contractors, as well as private owners and developers whose projects may be subject to public works requirements. Continue reading for the blueprint of how to comply with the state’s amended prevailing wage law.

                    The Foundation: What is the Prevailing Wage?

                    “Prevailing wage” consists of the minimum per‑hour wage rate and the fringe benefit rate set by the Department of Industrial Relations (DIR) that must be paid to qualifying workers. Fringe benefits can be credited to employees only if they meet the requirements of section 1773.1, which includes contributions for health, pension, vacation, travel, and apprenticeship benefits.

                    The Workforce Roster: Who is Entitled to the Prevailing Wage?

                    All workers employed on public works projects must be paid the DIR-determined prevailing wage for the areas in which the project is located.

                    The Specs: What is a “Public Work” Under California Law?

                    The Labor Code broadly defines “public works” as including: construction, alteration, demolition, installation, or repair work done under contract and paid in whole or part from public funds. But, this definition can be misleading because the definition of “public funds” encompasses more than monetary payments.

                    “Public funds” include not only direct payments, but also fee waivers, land conveyed below market value, tax credits, and government loans or grants. Thus, even indirect forms of public support can trigger prevailing wage requirements. For example, developer-funded projects may qualify as public works if the project is tied to a public agency requirement (e.g., conditions of approval), and public-private partnerships may also qualify if the public agency retains control or provides financial assistance to the private company.

                    The Renovation: What Prevailing Wage Requirements Did AB 889 Change?

                    California’s amended law retrofitted the state’s prevailing wage practices as follows:

                    1. Mandatory Annualization of Fringe Benefits
                      Prior to January 1, 2026, the annualization calculation applied only to certain benefits. AB 889 mandated that all employer-paid fringe benefits credited toward the prevailing wage be computed on an annualized basis, using any consistent 12-month period, and account for employee’s public and private hours worked for the same employer. This is the same method adopted by the federal Department of Labor in enforcing the Davis-Bacon Act for crediting contributions made to fringe benefit plans.

                      Contractors may still choose whether or not to provide fringe benefits on prevailing wage jobs, and there are a few narrow exceptions to the amount of credit an employer may seek for fringe benefit payments that are included in the annualization requirement. However, the most critical exception has been retroactively revoked. Prior to January 1, 2026, the Director of the DIR was authorized to waive an annualization calculation method if it was deemed not to serve the purpose of the law. AB 889 not only removed this exemption, but immediately revoked any exemptions issued by the Director prior to the bill’s effective date.
                    2. Prohibition of Frontloading Fringe Benefits
                      Some employers previously allocated 100% of fringe benefit contributions to employees’ public project hours to maximize the fringe benefit credit. AB 889 eliminated this practice.
                    3. Recordkeeping and Document Production Requirements
                      Covered employers must maintain records of each worker’s total annual hours across public and private projects, benefit contribution schedules, and employee-specific annualized calculations. This documentation must be produced to the Division of Labor Standards Enforcement (DLSE) upon request. Failure to comply with such a request could lead to denial of the employer credit.

                    The Inspectors: How are the DIR and DLSE Enforcing the Prevailing Wage Law?

                    Recently, the DIR and DLSE have significantly expanded prevailing wage enforcement efforts. These agencies’ audits tend to focus on underpayment, employee misclassification, improper apprentice ratios, and inaccurate certified payroll. Penalties for noncompliant practices can include withholding contract funds and issuing civil wage and penalty assessments.

                    Contractors can also face other collateral consequences, including but not limited to California Contractors State Licensing Board disciplinary actions and/or debarment for willful violations or apprenticeship misuse or ratio violations

                    The Winning Blueprint: Start Building Compliance from the Ground Up!

                    The amended requirements under AB 889 create new job site hazards for public works employers in California relating to cash wage obligations, unbudgeted labor cost overruns, subcontractor non-compliance, and possible DLSE enforcement actions.

                    The following early compliance efforts can help protect employers from prevailing wage potholes:

                    • Conduct internal fringe-benefit audits;
                    • Update payroll systems to perform annualization automatically;
                    • Train payroll and field supervisors on proactive compliance;
                    • Ensure that the compliance clauses in applicable construction contracts and subcontracts are strong, and include flow-down obligations;
                    • Review public funding triggers, including fee waivers, land conveyances, or tax credits that might subject a project to public works requirements; and
                    • Restructure benefits to ensure that only bona fide contributions receive prevailing wage credit. 

                    Workplace Solutions

                    If you have questions about AB 889 compliance, or other construction industry employment issues, contact the authors of this article or your favorite Seyfarth lawyer for more information.

                    Edited by Catherine Feldman

                    Seyfarth Synopsis: As the world turns its eyes to California this weekend for Super Bowl LX, employers doing business in California may not only think of warm weather and great football, but also the Labor Commissioner, aka the Division of Labor Standards Enforcement (DLSE), a division of the Department of Industrial Relations (DIR) tasked with investigating wage and hour practices, which can result in significant citations or settlements.

                    Employers doing business in California are well aware of the DLSE, aka the Labor Commissioner’s Office, which, among other things, investigates wage and hour practices and adjudicates employees’ wage theft claims. With Superbowl LX on our minds, we thought it appropriate to take a time out for a recap of the 2025 DLSE season’s expansive impact on employers.

                    DLSE Investigations and Enforcement

                    In 2025 alone, the Labor Commissioner’s Bureau of Field Enforcement (BOFE) threw a flag on the play and issued more than 3,600 notices to discontinue wage and hour violations, including the following settlements and citations:

                    • $1.2 million settlement against a Newport Beach luxury carwash for wage violations, with payments to the 23 affected workers ranging from $8,500 to $92,800.
                    • $2.3 million citation against Los Angeles-based developers at four construction sites for violations impacting 124 construction workers involving unpaid minimum wages and overtime compensation, wage statement violations, and paid sick leave.  
                    • $680,000 citation against a Los Angeles-based restaurant for failure to pay 48 employees all wages owed, meal and rest break violations, and wage statement violations.

                    The DLSE undertakes enforcement actions in response to worker complaints, and on its own accord strategically targeting certain industries that it assumes will have high rates of wage violations. The genesis of these high value citations can be Labor Commissioner investigations involving payroll and sick leave audits, employee interviews, and site visits. Their goal is to uncover systemic violations—such as unpaid overtime, missed meal and rest breaks, minimum wage or paid sick leave violations, or inaccurate wage statements.

                    If a business receives notice of a DLSE investigation, it is important to take the following steps:

                    • Immediately reach out to outside counsel experienced in these investigations to guide you through the process.
                    • Timely contact the assigned investigator to discuss the scope of the investigation;
                    • Ensure the requested materials have been preserved and are available for production;
                    • Have legal counsel review the relevant records before production to assess potential weaknesses; and
                    • Discuss with counsel a plan to correct any non-compliant practices before the conclusion of the DLSE’s investigation. 

                    The DLSE Calls For An Audible With Municipal Prosecutors

                    The Labor Commissioner has recruited some new players for the 2026 season, from municipal law enforcement authorities. On July 23, 2025, the DLSE announced that it was awarding grants under the Workers’ Rights Enforcement Grant Program, established in 2023, to 16 public prosecutors to pursue civil and criminal cases for wage theft, unlawful business practices, and Labor Code violations. The benefitting cities include Alameda, Fresno, Los Angeles, Oakland, Orange County, San Diego, and San Francisco, which received grant awards ranging from $600,000 to $750,000 per city.

                    With this additional funding, local agencies are expected to expand their investigations into potential Labor Code violations. These local investigations are often conducted in a similar manner to the DLSE’s investigations, and employers should follow similar steps when provided with a notice of investigation.

                    Individual DLSE Claims Can Take The Game Into Overtime

                    Large investigations aren’t the only way the DLSE blocks and tackles potential wage theft violations. The Labor Commissioner also receives thousands of individual wage claims each year. Employers can defend against or resolve these claims at an initial settlement conference and the subsequent formal hearing. These claims can also go into overtime, if either party appeals the DLSE’s decision to the California Superior Court, which will review the matter de novo, or to the Director of the DIR.

                    For a guide on how to avoid fumbling an individual claim, read all about the DLSE and the appeal process here. Like the game of football, this process has remained largely the same over the years, but with one recent notable exception. As the California Supreme Court held in the 2025 Iloff v. Cynthia LaPaille decision, an employee can raise additional claims during the appellate process.

                    Workplace Solutions

                    To limit exposure to any of the Labor Commissioner’s enforcement actions, employers should ensure good wage and hour hygiene so as to comply with California law. Here are some steps employers should consider taking to get game day ready:

                    • Review your wage and hour policies annually to ensure compliance with California’s ever-evolving requirements;
                    • Train your managers and HR team on compliance issues;
                    • Conduct internal audits to identify and correct problems early; and
                    • Respond promptly to employee complaints or questions about wage and hour practices.

                    Seyfarth is here to help employers navigate a path to California compliant practices and assist with defending against state and local agency enforcement efforts should they occur. Check out the CalPeculiarities Blog for other legal developments affecting California employers.

                    Edited By: Kristina Launey

                    By:  Heather E. Horn & Jonathan L. Brophy

                    Seyfarth Synopsis: It’s the most wonderful time of the year—until someone spikes the punch and your company lands on a naughty list. Holiday parties are great for spreading cheer, but they can lead to liability faster than the bartender can pour eggnog at an open bar. Here’s how to keep your celebration festive and compliant with California law.

                    Festive Celebrations for Everyone!

                    All employees should feel included in celebrations during the most festive time of the year. California’s Fair Employment and Housing Act and federal laws such as Title VII of the Civil Rights Act of 1964 prohibit religious discrimination. Avoid skating on thin ice with these laws, and plan a neutral party that does not favor one holiday or religion over another. For example:

                    • Use neutral themes like “Winter Celebration” or “Year-End Appreciation.”
                    • Avoid religious décor and music.
                    • Offer diverse food options to respect various dietary restrictions and preferences.

                    Sleigh the Alcohol Risks

                    Alcohol is the ultimate Grinch when it comes to holiday party liability. Under California law, employers can be held responsible if an intoxicated employee causes harm even after leaving the party. In Purton v. Marriott International, Inc., 218 Cal.App.4th 499 (2013), the Court of Appeal found that an employer could be liable for an employee’s DUI accident after a company party because the employee consumed alcoholic beverages at the party, which the court held was within the scope of employment.

                    Here are a few tips to keep employees’ spirits bright (but not too bright):

                    • Communicate expectations for responsible drinking before the event.
                    • Limit drinks with tickets or cap open bar hours.
                    • Hire licensed bartenders trained to cut off service.
                    • Serve plenty of food and non-alcoholic options.
                    • Put a “last call” time on alcoholic drinks towards the end of the event and switch to nonalcoholic beverages.
                    • Provide rideshare vouchers or shuttles.
                    • Consider hosting the event during the day (or as a lunch).

                    Employment Policies Don’t Take a Holiday

                    Even if your party is off-site and after work hours, FEHA and Title VII’s harassment and discrimination laws still apply. Employers can be liable for misconduct at work-related social events because these events are considered extensions of the workplace.

                    One area where issues can arise is employees’ disregard for a company dress code. Employers may decide to relax dress code policies (if one exists) during holiday parties to allow employees to don festive attire. However, even if a policy is temporarily revised or relaxed, employees still need to dress appropriately and avoid offensive clothing.

                    To ensure your entire workforce can enjoy the holiday season:

                    • Before the event remind employees that anti-harassment policies apply at company parties.
                    • Avoid mistletoe, risqué games, inappropriate photo booth accessories, or any party activities that might create discomfort.
                    • Ensure party entertainment (comedians, musicians, magicians) is workplace appropriate.
                    • Ensure company leaders model appropriate conduct.
                    • Investigate any complaints arising from a company event promptly and thoroughly.

                    Remember to Pay Your Employees all the Gelt They Earned at the Party

                    If attendance is mandatory, non-exempt employees must be paid for their time even if the party is after hours.

                    If the party occurs during work hours, don’t forget California’s meal and rest break rules. A mandatory party during the workday does not count as an off-duty meal period for non-exempt or hourly employees. Employers may owe an extra hour of pay to these employees as a meal period premium.

                    • Make attendance voluntary and clearly state this in the event invitations.
                    • Plan off-duty breaks for non-exempt employees if the party overlaps with work hours.
                    • Remind non-exempt employees not to clock-out for a holiday party that occurs during work hours.

                    Workplace Solutions

                    Make your list and check it twice! With a little planning, employers can create parties that are winter wonderlands rather than litigation snowstorms. Employers should set employee expectations before the festivities begin—including alcohol limits and transportation options, reinforce company policies, be aware of wage and hour implications, and plan an inclusive celebration. The authors or your favorite Seyfarth attorney are here to help you navigate holiday party pitfalls.

                    Edited by: Catherine Feldman

                    Seyfarth Synopsis: The Los Angeles County Board of Supervisors recently passed a Hotel Worker Protections Ordinance for the unincorporated areas of Los Angeles. Beginning April 1, 2026, covered employers will need to comply with new safety mandates, housekeeping workload caps, and overtime limitations. The Ordinance’s training requirements will take effect October 1, 2026. This is the latest effort to regulate the hospitality industry within the greater Los Angeles area. Similar ordinances are already in effect in the cities of Los Angeles, Santa Monica, and West Hollywood.

                    Hotels in the unincorporated areas of Los Angeles County will need to prepare for more than guests checking in when the County’s Hotel Worker Protections Ordinance (HWPO) takes effect on April 1, 2026. The County joins Los Angeles, Santa Monica, and West Hollywood in requiring safety measures for covered hotel employees, workload and overtime limitations, and mandatory training.

                    Who’s Covered?

                    The HWPO broadly applies to all hotels in the unincorporated areas of the County with two limited exceptions:

                    1. County Waiver: Hotel employers can seek a limited one-year waiver from the Los Angeles County Department of Consumer and Business Affairs if compliance with the HWPO would require the hotel, in order to avoid bankruptcy or closure of the hotel, to reduce its workforce by more than 20% or reduce hotel workers’ total hours by more than 30%.
                    2. CBA Waiver: A collective bargaining agreement can waive the HWPO if the waiver is explicitly set forth in clear and unambiguous terms.

                    All workers employed by a covered hotel are entitled to the HWPO’s protections except for managerial, supervisory, or confidential employees.

                    Protections From Violent or Threatening Conduct

                    Covered hotels must provide personal security devices at no cost to employees assigned to work alone in guest rooms or restroom facilities. The devices are intended to be used by employees in the event of conduct involving physical violence or the threat of physical violence that is, or will imminently occur in the employee’s presence. With this purpose in mind, the devices must include a panic button that can summon designated hotel security officers, managers, or other supervisory hotel staff who must be available at all times to provide immediate assistance when a device is activated.

                    If an employee alerts the hotel of a guest’s violent or threatening conduct, the hotel must:

                    1. Allow the employee paid time off to report the conduct and consult with a counselor or advisor of the employee’s choosing.
                    2. Upon request, provide a reasonable accommodation to the employee including a modified work schedule, reassignment to a vacant position, or other reasonable adjustment.

                    Covered hotels must also (1) post notices in guest rooms and restroom facilities that the hotel provides personal security devices to its employees; and (2) annually train employees on how to use and respond to the devices.

                    Housekeeping Workload Limitations

                    Like its neighboring jurisdictions, Los Angeles County caps the amount of space room attendants may clean each day without triggering double-time:

                    1. Hotels with at least 40 guest rooms: a 3,500 sq. ft. cap per 8-hour workday.
                    2. Hotels with less than 40 guest rooms: a 4,500 sq. ft. cap per 8-hour workday

                    These square footage calculations must be prorated for employees who work fewer than eight-hour shifts and for overtime worked. Additionally, the calculations can be impacted by the type of room a room attendant is assigned to clean, including if it has a cot or rollaway bed or is being cleaned due to the guest checking out.

                    Overtime Limitations

                    Under the HWPO, covered employees cannot work more than 10 hours in a single workday without the employee’s written consent. Employers must give employees at least seven days’ notice before seeking the consent that they can refuse to work greater than 10-hour workdays without fear of retaliation.

                    Training Requirements Beginning October 1, 2026

                    Beginning October 1, 2026, covered hotel employees must complete at least six hours of live, interactive training from a County-certified training organization addressing:

                    1. Rights and obligations under the HWPO;
                    2. Responding to suspected trafficking, domestic violence, or threatening conduct;
                    3. Cleaning and disease-prevention best practices;
                    4. Identifying/Avoiding pest infestations; and
                    5. Recognizing and responding to signs of criminal activity.

                    After completing the training program, covered employees must take an exam administered by the training organization to obtain a Public Housekeeping Certificate. Employees will be unable to work as a room attendant for more than 120 days without this certification.

                    Notice and Record Keeping Obligations

                    Beginning April 1, 2026, covered employers must provide notice to all employees and new hires of the HWPO’s requirements. The HWPO also requires covered employers to maintain records for three years of: (1) incident reports for personal safety device activations; and (2) each room attendant’s name, rate of pay, pay received, rooms cleaned or total square footage cleaned each workday, overtime hours worked for each workday, and any written consents obtained.

                    Additionally, hotel employers must keep records demonstrating compliance with the training requirements. However, the three-year duration does not apply to these records.

                    Available Remedies

                    The HWPO authorizes the County and private individuals to bring civil actions for noncompliance. Available remedies include damages, injunctive relief, and attorneys’ fees and costs for a prevailing plaintiff.

                    Workplace Solutions

                    Just like planning for a vacation at your favorite hotel, employers subject to the HWPO should make a compliance plan early. Covered employers may want to consider reviewing personal security device options, updating workplace violence and reporting policies, revising recordkeeping practices, and auditing square-footage and workload capacities of room attendants, among other things. The authors or your favorite Seyfarth attorney are here to help you prepare and advise on compliance with this Ordinance.

                    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