Recent Updates In California State Law

Employers should be aware of several California laws that were recently enacted or went into effect. These laws expand the scope of care recipients that can trigger paid family leave obligations, extend the statute of limitation for survivors of sexual assault, strengthen protections for tipped workers’ wages, increase minimum wage statewide, provide collective bargaining and organization rights to rideshare workers, and prohibit “stay-or-pay” clauses in employment contracts. 

AB 692: Prohibition on “stay-or-pay” agreements

Effective January 1, 2026, AB 692 prohibits employers from including contract terms that require workers to repay an employer for debts, such as training costs, upon termination of employment. Such provisions are rendered void, and employers can be held liable for violations, with potential penalties including the greater of either $5,000 per worker or the worker’s actual damages plus injunctive relief and reasonable attorney’s fees and costs. AB 692 includes