New California employment laws take effect in 2026. Here's what to know
SAN DIEGO (FOX 5/KUSI) -- California Gov. Gavin Newsom recently signed into law a lengthy list of bills that affect both employers and their employees that are set to take effect starting next year.
Many of the bills that will officially go into effect on Jan. 1, 2026, include laws governing employer obligations such as providing workers with updated notices of their rights in the workplace, artificial intelligence (AI), expanded leaves of absence and the prohibition of "stay-or-pay" contracts.
Here are just some of the new laws that will take effect in the workplace starting on Jan. 1.
Assembly Bill 692: "Stay-or-Pay" Contracts
Assembly Bill 692 will affect employment contracts entered into on or after Jan. 1. It bans employers from requiring workers to "pay an employer, training provider, or debt collector for a debt if the worker’s employment or work relationship with a specific employer terminates.”
The bill comes after a coalition led by the California Nurses Association/National Nurses United and other advocates pushed for stronger workplace protections against "stay-or-pay" contracts, which include Training Repayment Agreement Provisions (TRAPs).
After the bill was signed by Newsom, California became the first state to pass new workplace protections against TRAPs and similar financial penalties.
Senate Bill 53: Transparency in Frontier Artificial Intelligence Act (TFAIA)
Senate Bill 53, also known as the Transparency in Frontier Artificial Intelligence Act (TFAIA), would protect whistleblowers working with AI foundation models and requires more clarity and disclosure from employers who are frontier developers.
Specifically, it would require employers to implement an internal process in which an employee may anonymously disclose information if they believe the frontier developer's activities pose a "substantial danger to public health or safety" or if the TFAIA was violated.
Senate Bill 294: Workplace Know Your Rights Act
Under the new Senate Bill 294, employers in California will need to provide a written notice to individual employees about specific workers' rights on or before Feb. 1.
The notice is required to include information such as the right to notice of inspections conducted by immigration agencies as well as how to protect themselves against unfair immigration-related practices.
Under SB 294, the notice must also have information about the right to organize a union or "engage in concerted activity in the workplace."
