As a California employer, you are likely already aware of the sometimes significant expansions of employer obligations and employee protections that can occur each year in October. 2025 was no different than past years, with various bills being proposed and many becoming new laws which will impact employers immediately and into the future.  The following summarizes the new employment laws about which California employers should be aware.  Unless otherwise noted, the law will take effect on January 1, 2026.

AB 406 (Workplace Protections for Victims of Violence): AB 406 expands upon last year’s legislation reorganizing California’s crime victim time off and accommodations law.  This bill adds a new reason for which protected time off can be taken, prohibiting employers from discharging or taking other action against an employee who is a victim or a family member of a victim for taking time off in order to attend judicial proceedings related to that crime. For purposes of this new provision only, AB 406 creates a different definition of “victim” which includes being subjected to one of 14 different crimes enumerated by Government Code section 12945.8(j)(8)(c). These changes will prompt employers to review their handbook crime victim policies and the new notice that was just published by the Civil Rights Department on July 1, 2025, will likely need to be updated.  The law also revises notice requirements under California’s jury duty law, requiring reasonable “advance” notice to the employer, unless the “advance notice is not feasible.” Passed as an urgency measure, AB 406’s jury duty notice changes take effect immediately, with the entitlement to time off for the additional reason going into effect on January 1, 2026.  

AB 692 (Contracts in Restraint of Trade): AB 692 targets so-called “stay or pay” agreements, and would make it unlawful to include in any employment contract, or to require a worker to execute as a condition of employment or a work relationship, a contract that includes a term that requires the worker to pay the employer, a training provider, or a debt collector for a debt if the worker’s employment or work relationship with the employer terminates. Such agreements often arise in the context of employer subsidies of training expenses or tuition.  Exceptions will be made for certain agreements, including loan repayment assistance programs provided by federal, state, or local governmental agencies, contracts for the cost of tuition for transferable credentials, and signing bonuses, among others.  Existing agreements are not impacted—only agreements entered into on or after January 1, 2026 are covered by this new legislation.  

AB 751 (Rest Periods for Safety-Sensitive Employees at Petroleum Facilities): AB 751 amends Labor Code section 226.75 to make permanent the exemption from standard rest period requirements for safety-sensitive employees at petroleum facilities and refineries. Previously scheduled to sunset on January 1, 2026, this exemption will now remain in effect indefinitely. The statute applies to employees who are required to carry or monitor a communication device and respond to emergencies, or who must remain on the premises to monitor and respond to emergencies. AB 751 also broadens coverage to include comparable roles at other refineries that produce fuel through alternative feedstocks. Under the law, when a rest period is interrupted, the employer must provide a substitute rest period as soon as practicable after the emergency ends. If circumstances prevent providing that substitute rest period, the employer must compensate the employee with one additional hour of pay at the regular rate of pay. Any such payments must appear on the employee’s itemized wage statement as required under Labor Code section 226. AB 751 provides ongoing flexibility for petroleum employers managing emergency-response operations while maintaining employee rest period protections through substitute breaks or premium pay obligations. 

AB 858 (Rehiring and Retention of Displaced Workers): AB 858 extends California’s recall and retention provisions under Labor Code section 2810.8—initially enacted in response to the COVID-19 pandemic—through January 1, 2027. These provisions continue to apply to hotels with 50 or more rooms, event centers, airport hospitality and service providers, building service contractors, and private clubs.

Under the statute, covered employers must continue to offer reemployment opportunities to qualifying laid-off employees before hiring new workers. Within five business days of establishing a position, employers must notify all qualified laid-off employees in writing (by hand delivery or mail) and electronically (by email and text message, if available). If multiple laid-off employees qualify, the position must be offered in order of seniority, giving preference to the employee with the greatest length of service. Each recalled employee must be given at least five business days to accept or decline the offer, and employers may make conditional simultaneous offers so long as the final selection follows the seniority preference. 

AB 1514 (Exemptions from ABC Independent Contractor Test for Manicurists and Commercial Fishers): AB 5 (2019) codified the ABC independent contractor test in California after the California Supreme Court’s decision in Dynamex.  Over the years, the Legislature created numerous exemptions to the ABC test. This bill extends the exemption for services provided by a licensed manicurist who satisfies certain requirements until January 1, 2029. AB 1514 also extends the exemption for a commercial fisher working on an American vessel who meets certain requirements until January 1, 2031. Workers who qualify for the exemption will be evaluated under the Borello standard for independent contractors, which was the law for decades before the ABC test became law. 

SB 294 (The Workplace Know Your Rights Act): SB 294 adds provisions to the Labor Code which require California employers to provide a new written notice to employees regarding specified workers’ rights (such as rights regarding workers’ compensation, notice of inspection by immigration agencies, and to engage in concerted activity) and the constitutional rights of employees when interacting with law enforcement in the workplace. The Labor Commissioner is charged with creating the new notice and making it available on its website by January 1, 2026 and to update the notice annually. The notice must be provided to current employees on or before February 1, 2026, and annually thereafter, to new employees upon hire, and to employees’ collective bargaining representative, if applicable. The bill also requires employers, if an employee has designated an emergency contact for this purpose, to notify that emergency contact if the employee is arrested or detained at their worksite, or if the employer has knowledge of the employee’s arrest or detention off-site, but during work hours or the performance of the employee’s job duties. Employers must provide current employees with the opportunity to name an emergency contact by March 30, 2026, and upon hire for employees hired after March 30, 2026. 

SB 303 (Bias Mitigation Training): SB 303 amends the Fair Employment and Housing Act, stating that bias mitigation training, focused on an employee’s assessment, testing, admission, or acknowledgement of their personal bias, does not, by itself, constitute unlawful discrimination. Section 12940.2 defines “bias mitigation training” as bias mitigation or bias elimination training, education, and activities provided by an employer for the purpose of educating employees on understanding, recognizing, or acknowledging the influence of conscious and unconscious thought processes and their associated impacts, including implementation of specific strategies—testing and assessing personal bias, analyzing said tests and assessments, conducting training and workshops, using toolkits, and tracking bias mitigation and elimination—to mitigate the impact of employees’ personal biases. Section 12940.2 aims to encourage employers to conduct bias mitigation trainings (or continue to do so) and to affirm that conducting such trainings does not, by itself, constitute discrimination. 

SB 464 (Employer Pay Data): SB 464 amends California’s pay data reporting law to require employers to collect and store separately from employees’ personnel files, the demographic information gathered by an employer or labor contractor for purposes of submitting annual pay data reports. SB 464 further amends the law to require a court to impose a mandatory civil penalty, which was previously permissive, against an employer who fails to file a pay data report requested by the Civil Rights Department. As of January 1, 2027, SB 464 will also require employers to identify the number of employees by race, ethnicity, and sex in twenty-three categories in the pay data report, increased from the ten categories currently required. 

SB 513 (Personnel Records Inspection Rights): SB 513 expands employees’ rights to inspect and receive copies of their personnel records relating to the employee’s performance or any grievance concerning the employee, to specifically include records relating to the employee’s education and training. The bill further requires that an employer who maintains education and training records of its employees must ensure the records include: the employee’s name, the name of the training provider, the duration and date of the training, the core competencies of the training (including skills in equipment or software), and the resulting certification or qualification. 

SB 590 (Paid Family Leave Expansion for Designated Persons): Effective July 1, 2028, SB 590 expands employees’ eligibility to receive state Paid Family Leave (PFL) benefits to those who are taking time off work to care for a seriously ill “designated person.” The law defines a “designated person” as “any care recipient related by blood or whose association with the individual is the equivalent of a family relationship.” An employee who wishes to receive PFL benefits from the Employment Development Department to care for a designated person will be required to identify the designated person, and under penalty of perjury attest to how they are either related by blood to the designated person or how their association with the designated person is the equivalent of a family relationship. This law follows in the footsteps of AB 1041 (2022), which added “designated person” to the list of individuals for whom an employee could take paid sick leave and California Family Rights Act leave.  

SB 617 (California WARN Act Amendments): SB 617 expands obligations under the California Worker Adjustment and Retraining Notification (“WARN”) Act and adds new information employers must provide for covered plant closings and mass layoffs. The law requires that employers add the following language to all Cal-WARN notices:


Whether the employer plans to coordinate services, such as a rapid response orientation, through the local workforce development (“LWD”) board, a different entity, or no entity;
A description of the statewide food assistance program known as CalFresh, the CalFresh benefits helpline, and a link to the CalFresh internet website;
A functioning email and telephone number for the LWD board and a description of the rapid response activities offered by the LWD board; and
A functioning email and telephone number of the employer which the impacted employees may contact. 

SB 642 (Equal Pay Law Amendments): SB 642 amends California’s law requiring employers with 15 or more employees to post the pay scale for a position within job advertisements, redefining “pay scale” to mean “an estimate of the expected wage range an employer reasonably expects to pay for the position upon hire and that is made in good faith.” SB 642 increases the statute of limitations to recover wages for payment at a rate less than the rates paid to employees of another “gender” ( previously the opposite sex) from two to three years from the last date the cause of action accrues in all cases, and to allow recovery for the entire period during which a violation exists, not to exceed six years. SB 642 identifies that a cause of action occurs when: (1) an alleged unlawful compensation decision or practice is adopted; (2) an individual becomes subject to the decision or practice; or (3) an individual is affected by the application of the decision or practice.

SB 648 (Gratuities): Existing law prohibits an employer or agent from collecting, taking, or receiving any gratuity or a part thereof that is paid, given to, or left for an employee by a patron, or deducting any amount from wages due to an employee on account of a gratuity, or requiring an employee to credit the amount or any part of a gratuity against and as a part of the wages due the employee from the employer, and requires the Department of Industrial Relations to enforce these provisions. SB 648 provides an additional option for recovery for gratuity theft. Prior to passage of SB 648, the only recourse available to employees for tip theft by the employer was to file civil actions to recover withheld tips. To broaden the enforcement of gratuity protection laws, SB 648 authorizes the Labor Commissioner to investigate gratuity theft and issue citations or file civil actions. For any initial violation of gratuity theft, an employer will be subject to a civil penalty of one hundred dollars ($100) for each employee whose tips were taken in addition to restitution of the gratuity. For any subsequent violations, employers will be subject to a penalty of two hundred fifty dollars ($250) for each employee whose tips were taken in addition to restitution of the gratuity. 

Vetoed Bills

The Governor vetoed the following closely followed bills: 

AB 1136 – this bill would have created leave of absence and time off rights for employees facing issues with the work authorization status or who were detained by the government in immigration enforcement proceedings.  

AB 1326 – this bill would have codified the rights of individuals, including employees, to wear a health mask in public. 

SB 7 – this bill would have regulated the use of artificial intelligence high-risk automated decision systems (“ADS”) in employment.

Employers with questions regarding any of the above new laws and obligations may contact one of this article’s authors, or their usual employment law counsel at AALRR. 

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.
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