November 2025 was one of the busiest months in California employment law in recent memory, and most employers only caught half the story. Governor Gavin Newsom’s October 13 bill-signing deadline produced more than a dozen new workplace laws set to take effect January 1, 2026 but at the same time, the California Bureau of Field Enforcement issued over $1.3 million in citations against some of the country’s largest employers for misclassifying workers. Then the National Labor Relations Board sued the state of California. There’s a lot to track, and the compliance deadlines don’t stop at January 1. This article covers every major law, the full enforcement picture most publications missed, the active federal lawsuit, key vetoes, and the specific dates you need locked into your calendar before February 2026.
California employment law news in November 2025 was defined by Governor Gavin Newsom signing 13-plus new workplace laws taking effect January 1, 2026 including a pay equity overhaul (SB 642), a ban on stay-or-pay contracts (AB 692), and a new worker rights notice requirement (SB 294) alongside $868,128 in BOFE misclassification citations.
What Changed in California Employment Law in November 2025: The Full Picture
Governor Gavin Newsom signed more than a dozen employment bills into law during California’s 2025 legislative session, with the majority taking effect January 1, 2026, including SB 642 (the Pay Equity Enforcement Act), AB 692 (prohibiting stay-or-pay contracts), SB 294 (the Workplace Know Your Rights Act), and SB 261 (which established triple penalties for employers who fail to pay wage judgments within 180 days).
Three story tracks ran simultaneously through November. First, 13-plus employment laws moved from signed bills into active compliance obligations. Second, the California Bureau of Field Enforcement (BOFE) issued $1,306,332 in combined citations across two separate enforcement actions targeting worker misclassification and wage theft. Third, a federal-state constitutional clash erupted when the National Labor Relations Board filed a motion for preliminary injunction against a new California law that had granted the state broad authority over private-sector labor disputes.
Your compliance calendar for these changes doesn’t end on January 1. Several deadlines extend into Q1 and Q2 of 2026.
| Deadline | Law | What Employers Must Do |
|---|---|---|
| January 1, 2026 | SB 642, AB 692, SB 261, SB 617, SB 513, SB 648 | Multiple new obligations take effect see sections below |
| February 1, 2026 | SB 294 | Distribute stand-alone Workplace Know Your Rights notice to all current employees |
| March 30, 2026 | SB 294 | Collect emergency contact designations from all current employees |
| May 13, 2026 | SB 464 | Submit annual pay data report to the California Civil Rights Department |
| July 1, 2028 | SB 590 | Paid family leave benefits become available for “designated person” care |
The Major Bills Newsom Signed: What Each Law Actually Requires
SB 642 California’s Pay Equity Enforcement Act Changes the Pay Transparency Rules
SB 642 rewrites the definition of “pay scale” under California Labor Code section 432.3 to mean a “good faith estimate” of what a role pays, rather than the fixed range an employer posts in a job listing. That’s a meaningful distinction: employers can no longer post a wide range ($50,000–$200,000) and argue it’s technically accurate. The California Civil Rights Department (CRD) enforces this, and the consequences of non-compliance grew substantially.
The law also expands the definition of “wages” to include stock options, bonuses, and vacation pay meaning those elements must now appear in pay scale disclosures. The statute of limitations for pay equity claims extended to three years, and the recovery period to six years. One often-overlooked change: SB 642 replaces the phrase “opposite sex” with “another sex” in equal pay protections, extending explicit coverage to nonbinary employees. Effective January 1, 2026.
AB 692 California’s Ban on Stay-or-Pay Contracts Eliminates Training Repayment Clauses
AB 692 added Business and Professions Code §16608 and Labor Code §926, making California the strictest state in the country on training repayment agreements. The law prohibits any contract requiring an employee to repay training costs, relocation costs, or education expenses as a condition of employment or departure. Penalties run $5,000 per affected worker or the worker’s actual damages, whichever is greater.
The exceptions are narrow. A signing bonus where money is paid to the employee directly, not to a third party can still carry a repayment clause, but only if five specific conditions are met: the payment is voluntary, the repayment amount reduces proportionally over time, it’s documented, it doesn’t exceed the original amount paid, and the repayment period doesn’t exceed three years. That’s a high bar. If your current employment contracts have any kind of repayment clause tied to training, relocation, or education, you need a legal review before January 1, 2026. Contracts signed before that date aren’t grandfathered under all circumstances consult counsel on any rolling agreements.
SB 294 The Workplace Know Your Rights Act Adds a Stand-Alone Notice Requirement
SB 294 requires California employers to give every employee a separate, stand-alone written notice covering their rights to workers’ compensation, immigration protections, rights under the state and federal constitutions, and the right to organize. This isn’t a poster. It’s a document distributed directly to each employee, individually.
The February 1, 2026 deadline covers all current employees. New hires get the notice at the time of hire going forward. There’s a second deadline buried in SB 294 that most law firm summaries underplay: by March 30, 2026, every employer must also collect a designated emergency contact from each employee. Employers who don’t comply face penalties up to $500 per employee per violation. The California Labor Commissioner’s Office published a template notice in December 2025, and using that template is the lowest-risk path to compliance.
SB 617 Cal-WARN Notice Requirements Now Include More Information
California’s WARN Act notice requirements expanded under SB 617, effective January 1, 2026. Any Cal-WARN notice issued for mass layoffs, plant closings, or relocations must now include information about CalFresh eligibility, the contact details for the local workforce development board, and the employer’s current email address and phone number. These aren’t dramatic changes operationally, but if your legal or HR team has a template WARN notice, it needs to be updated before the first layoff event of 2026.
SB 261 Employers Who Ignore Wage Judgments Now Face Triple Penalties
SB 261 added a significant enforcement tool: if an employer fails to pay a final wage judgment within 180 days, they owe three times the judgment amount in penalties. Half goes to the employee, and the other half goes to the Division of Labor Standards Enforcement. A “good cause” exception exists for employers who can demonstrate genuine inability to pay, but the burden is on the employer to prove it. This law makes delay tactics in wage disputes significantly more expensive.
SB 513 Employees Can Now Access Training and Education Records
SB 513 expands the definition of personnel records that employees are entitled to access and copy. Training records, education records, and documentation of employer-sponsored learning programs are now included. This matters primarily for misclassification cases and disputes about job reclassification, where training history becomes evidence. Effective January 1, 2026.
SB 648 California’s Labor Commissioner Can Now Enforce Tip Theft Directly
Under SB 648, the California Labor Commissioner can investigate and issue citations for violations of Labor Code §351 the state’s tip protection statute without waiting for a civil lawsuit to be filed. Employees now also have a direct complaint pathway to the Labor Commissioner for tip theft, rather than only the courts. For any business in food service, hospitality, or retail that handles tips, this is a meaningful enforcement shift.
Additional Laws Taking Effect in 2026 and Beyond
Several other bills round out the 2025 session’s employment law output. AB 250 extended the statute of limitations for civil sexual assault claims through December 2027. AB 858 extended COVID-19 hospitality worker recall rights through January 2027 relevant for hotels and food service employers still managing pandemic-era workforce structures. SB 464 expanded California’s annual pay data report requirements to 23 Standard Occupational Classification (SOC) categories, up from 10, with the first expanded report due to the California Civil Rights Department on May 13, 2026. SB 590 created paid family leave rights for a “designated person” not just a family member but that provision doesn’t take effect until July 1, 2028, giving employers roughly two years to update their leave policies. AB 288 which dramatically expanded the Public Employment Relations Board’s (PERB) jurisdiction over private-sector labor disputes is discussed separately below because it’s currently the subject of a federal lawsuit.
California Minimum Wage and Exempt Salary Threshold for 2026
Effective January 1, 2026, California’s minimum wage rose to $16.90 per hour and the state’s annual exempt salary threshold increased to $70,304 nearly double the federal Fair Labor Standards Act threshold as part of the consumer price index-linked wage adjustments enacted during the 2025 legislative session.
Those numbers have practical implications for two distinct groups. Workers currently earning between $16.50 and $16.90 the 2025 and 2026 state minimums get an automatic bump. Managers and professionals classified as exempt under California law who earn between $66,560 and $70,304 are no longer legally exempt as of January 1 and must either receive raises or be reclassified. That reclassification decision carries overtime, meal break, and rest period obligations. It’s one of the most frequently missed compliance triggers during minimum wage adjustment cycles.
Sector-specific minimums stay in place. Fast food workers maintain the $20 per hour floor established by AB 1228 in 2023, and the California Fast Food Council retains authority to adjust that figure. Healthcare worker minimums under SB 525 follow a different phased schedule and aren’t affected by the CPI-linked adjustment.
BOFE Enforcement: California Issued $1.3 Million in Citations in November 2025 Alone
In November 2025, California’s Labor Commissioner’s Office Bureau of Field Enforcement (BOFE) issued $868,128 in citations against Costco Wholesale, Ryder Last Mile, and Mega Nice Trucking for misclassifying 58 delivery drivers as independent contractors, with employers appealing the citations the largest misclassification enforcement action of Q4 2025.
That was only the first action. On November 21, 2025, BOFE issued a separate $438,204 citation against a group of janitorial services companies and OptumCare for wage theft violations. Combined, those two November actions total $1,306,332 a figure that hasn’t appeared in any of the major law firm roundups covering Q4 2025 California employment law news, because most were written before the second action was published or simply didn’t aggregate both.
The Costco/Ryder action is the more instructive of the two. BOFE concluded that 58 delivery drivers who had been dispatched through Mega Nice Trucking a third-party logistics subcontractor for Ryder, which in turn held the last-mile delivery contract with Costco were employees under California’s ABC test. The case is significant because it applied joint employer liability up the full contractor chain. Costco, Ryder, and Mega Nice all received citations. Costco and Ryder are both appealing.
What this means for your business: if you use subcontracted delivery, janitorial, or logistics services in California, fbi law enforcement dayton neighborhood patterns of misclassification enforcement have been accelerating at the state level the BOFE has increasingly pursued citations up the full contractor chain rather than only against the direct employer. A joint employer analysis is worth running on any arrangement where a California worker performs services for your business through a third party.
The ABC test remains the controlling standard under Dynamex Operations West v. Superior Court (2018) and AB 5. Under Prong B of that test, a worker can only be classified as an independent contractor if the work they perform falls outside the hiring entity’s usual course of business. Delivery drivers performing last-mile delivery for a retailer clearly fail that prong, which is precisely why BOFE prevailed against Costco at the citation stage.
I’ve reviewed compliance calendars for California-based employers throughout this legislative cycle, and the misclassification issue is the one that generates the most genuine confusion not because employers don’t know the ABC test exists, but because they underestimate how far up the contractor chain BOFE is willing to trace liability. The November 2025 Costco citations are the clearest signal yet that the agency is treating multi-tier subcontracting arrangements as a priority.
The NLRB vs. California: A Federal Lawsuit Over AB 288’s Jurisdiction Grab
On November 19, 2025, the National Labor Relations Board filed a motion for preliminary injunction against California’s AB 288, which had expanded the Public Employment Relations Board’s (PERB) jurisdiction to hear private-sector labor disputes a direct challenge to the law’s constitutionality under the Supremacy Clause, with the injunction still pending as of January 2026.
AB 288 authorized PERB traditionally a California state agency handling public-sector labor disputes to also adjudicate unfair labor practice claims by private-sector employees. The NLRB’s position is straightforward: the National Labor Relations Act preempts state authority over private-sector collective bargaining and unfair labor practices under the Supremacy Clause of the U.S. Constitution. The NLRB had filed the initial lawsuit on October 15, 2025, and escalated to the injunction motion in November as AB 288’s January 1 effective date approached.
Why does this matter? AB 288 technically took effect January 1, 2026, but the injunction motion remains pending. Employers covered by the NLRA which is most private-sector employers face a genuine legal ambiguity about whether PERB has enforceable jurisdiction over their workforces right now. The safest posture is to proceed as if NLRA compliance remains your primary federal obligation while monitoring the injunction ruling. If the court grants the preliminary injunction, AB 288 will be stayed pending full adjudication, and PERB’s expanded jurisdiction won’t be operative.
What Newsom Vetoed: Three Bills That Won’t Become California Law
The vetoes from the 2025 session are nearly as important as the signings. Governor Newsom rejected SB 7, known as the “No Robo Bosses Act,” which would have prohibited employers from using automated or AI-driven systems to make decisions about worker scheduling, discipline, or termination without human review. His veto message described the bill as premature and potentially disruptive to legitimate operational technology.
So California didn’t pass AI workplace legislation through the legislature in 2025. But the CRD achieved similar regulatory effect through administrative rule. California’s Civil Rights Department finalized amendments to Fair Employment and Housing Act (FEHA) regulations on October 1, 2025, establishing that employers’ use of AI and automated decision-making systems in hiring, promotion, and termination decisions can constitute discrimination under existing state law, making California the first state to apply legacy anti-discrimination frameworks explicitly to algorithmic employment tools. The No Robo Bosses Act veto didn’t clear the field for AI it just means AI governance in California employment comes from CRD enforcement rather than a new statute.
Newsom also vetoed AB 1136, which would have created immigration-related leave protections, and AB 1326, which would have given employees a right to wear face masks at work. His veto messages on both cited adequacy of existing law or regulatory overlap concerns.
What Employers Must Actually Do Right Now: A Compliance Action Plan
The January 1 effective date for most 2025 laws has passed. But the compliance work isn’t over, and the rolling deadlines through Q2 2026 carry real penalties.
Between now and February 1, 2026, your single highest-priority task is distributing the SB 294 Workplace Know Your Rights notice to every current employee. The California Labor Commissioner published a template in December 2025 use it, and document the distribution with a signed acknowledgment from each employee. This is a per-employee penalty ($500 per violation), which means a 200-person workforce represents $100,000 in exposure if the notice doesn’t go out.
By March 30, 2026, collect emergency contact designations from all current employees as required by SB 294’s secondary provision.
For the January 1 changes already in effect: audit any employment contract that contains a repayment clause before issuing it to a new hire. AB 692 prohibits most of them. Update your pay postings and offer letters to reflect the “good faith estimate” language SB 642 now requires. Update Cal-WARN notice templates to include CalFresh information and workforce board contacts per SB 617.
The pay data reporting obligation under SB 464 doesn’t hit until May 13, 2026, but the expanded 23-category reporting structure requires HR systems to be reconfigured that’s not a two-week project. If your team hasn’t started mapping current job classifications to the new SOC categories, that work belongs on the Q1 2026 roadmap.
The exempt salary threshold change to $70,304 should be resolved already if it isn’t: any employee you’re classifying as exempt who earns less than that amount needs either a salary adjustment or immediate reclassification with all the attendant obligations.
Frequently Asked Questions
What California employment laws took effect January 1, 2026?
Thirteen-plus new laws took effect January 1, 2026, including SB 642 (pay equity and pay scale redefinition), AB 692 (ban on stay-or-pay and training repayment contracts), SB 261 (triple penalties for unpaid wage judgments), SB 617 (expanded Cal-WARN notice content), SB 513 (broader employee personnel file access), and SB 648 (Labor Commissioner enforcement authority over tip theft). AB 288 (PERB private-sector jurisdiction) also took effect but is subject to an active NLRB federal lawsuit.
Does AB 692 apply to employment contracts signed before January 1, 2026?
AB 692 applies to contracts entered into on or after January 1, 2026. Existing contracts aren’t automatically voided, but any repayment clause that would be enforced after that date in a way that violates the new law carries legal risk. Consult California employment counsel before attempting to enforce any pre-2026 training or relocation repayment agreement against a departing employee.
What does the SB 294 notice look like and where do I get the template?
The California Labor Commissioner’s Office published a compliant template for the SB 294 Workplace Know Your Rights notice in December 2025. It’s available through the California Department of Industrial Relations website. The notice covers workers’ compensation rights, immigration rights, the right to organize, and constitutional protections. It must be distributed as a stand-alone document not included in a handbook or posted only on a wall.
Is AB 288 actually enforceable right now, or is the NLRB lawsuit blocking it?
AB 288 technically took effect January 1, 2026, but the NLRB filed a motion for preliminary injunction on November 19, 2025, arguing the law violates the Supremacy Clause by giving PERB authority over matters the National Labor Relations Act exclusively governs. The injunction motion was still pending as of January 2026. Employers covered by the NLRA should continue operating under federal labor law obligations and monitor the court’s ruling.
What is the California minimum wage in 2026?
California’s statewide minimum wage is $16.90 per hour effective January 1, 2026, up from $16.50 in 2025. Fast food workers maintain a separate $20 per hour floor. The exempt salary threshold for overtime and meal break exemptions increased to $70,304 annually.
Were the Costco delivery drivers classified as employees by BOFE?
Yes. BOFE determined that 58 delivery drivers dispatched through Mega Nice Trucking a subcontractor to Ryder Last Mile, which held the delivery contract with Costco were misclassified as independent contractors under California’s ABC test. BOFE issued $868,128 in combined citations against all three companies in November 2025. Costco and Ryder are appealing the citations.
What happened to the No Robo Bosses Act?
Governor Newsom vetoed SB 7, the No Robo Bosses Act, in the 2025 session. His veto message described it as premature. However, the California Civil Rights Department separately finalized FEHA regulation amendments on October 1, 2025 without any new legislation establishing that AI-driven hiring, promotion, and termination decisions can constitute discrimination under existing California anti-discrimination law.
What is the California exempt salary threshold for 2026?
The California exempt salary threshold for 2026 is $70,304 annually, which equals twice the state minimum wage on a full-time basis. This threshold applies to the executive, administrative, and professional exemptions under California wage orders and is nearly double the federal FLSA exempt threshold of $43,888 per year.