California employers are once again navigating a shifting landscape of wage and employment regulations going into 2026. Between statewide minimum wage increases, city‑specific wage mandates, strengthened pay transparency obligations, and new personnel‑file requirements, businesses must stay proactive to remain compliant.
Statewide Minimum Wage and Exempt Salary Thresholds
California’s statewide minimum wage increased to $16.90 per hour on January 1, 2026, resulting in a corresponding increase to the exempt salary threshold. Most exempt employees must now earn at least $70,304 annually, since exempt status requires a monthly salary of no less than twice the state minimum wage.
For employers with a mix of exempt and non‑exempt staff, this change has direct impacts on budgeting, scheduling, and classification audits. If you are unsure if one of your employees qualifies to be exempt (salary) or non-exempt (hourly), our HR Consulting team can help by reaching out to our contact information below.
Local Minimum Wage Variations Across California
More than 30 California cities and counties have their own minimum wage ordinances, many of which exceed the statewide rate. Employers must pay the highest applicable rate based on where the work is performed. This is an especially important consideration for companies with employees working across multiple jurisdictions, such as construction, home services, delivery, and hospitality. In order to see a list of localities and their individual minimum wage ordinances, click here.
Pay Transparency Obligations Under SB 642
California continues its expansion of pay transparency legislation, and SB 642, signed into law in 2025, further strengthens employer accountability around compensation practices. Core expectations include:
- Publishing pay ranges in job postings
- Maintaining clear documentation that supports compensation decisions
- Preparing for increased employee access to pay‑related information
For small and mid‑sized employers, many with informal pay‑setting processes, SB 642 underscores the need for standardized job descriptions, consistent pay practices, and detailed recordkeeping. For assistance reviewing your job postings and compensation practices, reach out to our HR Consulting team.
Expanded Personnel File Requirements Under SB 513
SB 513 represents one of the most significant updates to California’s personnel‑record requirements in recent years. Effective, January 1, 2026, the law amends Labor Code § 1198.5 to broaden what must be included in personnel files and what employers must produce when an employee requests access.
1. Expanded Definition of Personnel Records
Before SB 513, personnel records mainly included documents tied to performance, discipline, and grievances. SB 513 expands this definition to explicitly include education and training records, but only if the employer maintains them.
This shift means that even informal records, such as internal training notes, emailed certificates, or LMS data must now be considered part of the personnel file.
2. New Required Elements of Training Records
If an employer maintains training or education records, the law requires that those records must include:
- Employee’s name
- Training provider’s name
- Date and duration of training
- Core competencies covered (including equipment/software skills)
- Any certification or qualification earned
In other words, employers aren’t required to create training records, but if they exist, they must contain all mandated information.
3. Reinforced Procedures for Access Requests
SB 513 retains existing timelines and rules but highlights the compliance risks:
- Records must be made available within 30 days of the request
- Deadline may be extended to 35 days only through a written agreement
- Records must be retained for at least three years after separation
- Former employees are limited to one request per year
Employers may verify the requester’s identity and may require use of an employer form.
4. Increased Liability for Non‑Compliance
Failure to comply can result in:
- Penalties of up to $750 per violation
- Injunctive relief
- Recovery of attorney’s fees and costs
Because training documentation is now included, employers maintaining inconsistent records face heightened risk of producing an incomplete or non‑compliant file.
5. Practical Impact on Employers
SB 513 is prompting many organizations to audit training recordkeeping systems. Training records that previously lived in departmental files, email chains, spreadsheets, or LMS systems must now be consistent, complete, and accessible.
For small and mid‑sized businesses especially, this may require updated filing systems and more structured HR processes.
New Restrictions on Employment Repayment Agreements Under SB 692
Another notable development for 2026 is SB 692, which bans most forms of “stay‑or‑pay” arrangements — agreements requiring employees to repay costs such as training, relocation expenses, or bonuses if they leave employment before a set period. For any contracts entered into on or after January 1, 2026, employers may not include terms that:
- Require workers to repay a debt if their employment ends
- Allow debt collection to resume upon separation
- Impose penalties, fees, or costs tied to resignation or termination
These provisions are now considered void and contrary to public policy.
The law includes narrow exceptions, such as certain government‑sponsored loan‑forgiveness programs, state‑approved apprenticeships, or repayment agreements for transferable credentials — but only when strict statutory conditions are met.
Employers should review sign‑on bonuses, retention incentives, relocation agreements, or training repayment provisions to ensure they comply with SB 692. For assistance reviewing your current policies, reach out to our HR Consulting team.
New “Know Your Rights” Notice Requirements Under SB 294
California’s Workplace Know Your Rights Act (SB 294) requires employers to provide a stand‑alone written notice informing employees of critical workplace rights — including workers’ compensation benefits, protections against unfair immigration practices, the right to notice of federal immigration inspections, union‑organizing rights, and constitutional rights during workplace interactions with law enforcement. Employers must distribute this notice by February 1, 2026, annually thereafter, and at new‑hire onboarding.
The Labor Commissioner has released a model notice in English and Spanish, with more languages coming soon. SB 294 also requires employers to give employees the opportunity to designate whether their emergency contact should be notified if they are arrested or detained at work by March 30, 2026.
Taking Action: Compliance Steps for 2026
Given these expanding regulatory requirements, employers should take the opportunity to:
- Update employee handbooks to incorporate new wage laws, personnel‑file requirements, and employee‑notice mandates
- Post revised minimum wage notices, including all applicable city‑specific postings
- Review exempt vs. non‑exempt classifications under FLSA and California law
- Document pay practices and ensure transparency requirements under SB 642 are met
- Audit personnel files, including all training or education records, for SB 513 compliance
- Review employment and repayment agreements (sign‑on bonuses, training reimbursement terms, retention incentives) for SB 692 compliance
- Prepare and distribute the “Know Your Rights” notice under SB 294 by February 1 and annually thereafter, and implement a process for the new emergency‑contact designation requirement
Need Support? Duffy Kruspodin’s HR Consulting Team Is Here to Help
California’s employment laws are constantly evolving, and compliance can feel overwhelming for small and mid‑sized businesses. Duffy Kruspodin’s HR consultants can assist with handbook updates, wage‑and‑hour compliance, pay transparency requirements, personnel‑file audits, and more. Our team helps employers navigate these changes smoothly and confidently.
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