MINIMUM WAGE INCREASE:
The California state minimum wage has increased by .40 cents to $16.90 per hour for CA employers effective January 1, 2026. The City of San Diego’s minimum wage has increased to $17.75 per hour, an increase of .50 per hour. Local city’s should check their minimum wage.
EXEMPT STATUS MINIMUM WAGE THRESHOLDS:
The California state minimum wage salary threshold for exempt employees under the executive, managerial and administrative exemptions has increased to $70,304 per year, regardless of the city.
The California state minimum wage salary threshold for exempt employees under the computer professional exemption has increased to $122,573.13.
NEW ANNUAL NOTICE REGARDING EMPLOYEE RIGHTS
California will be issuing a new template for all employers to notify employees of their workplace rights. The template will be part of the workplace poster that needs to be posted by February 1, and also needs to be provided at time of hire. The expanded rights in Senate Bill 294 state that employers must notify an employee’s emergency contact if the employee is arrested. The Labor Commissioner does not appear to have released the template yet. We will send an update when the template is available.
NEW PROTECTIONS FOR EMPLOYERS WHO PROVIDE BIAS TRAINING
For employers who provide bias training, anything learned about implicit bias as a result of the training cannot be used against an employer in court. The goal of Senate Bill 464 is to encourage more employers to provide bias training in the workplace.
If you have not conducted Preventing Sexual Harassment training in the last two years, you will want to put that on the to-do list for 2026 since the training needs to be repeated every two years and within six months for newly hired or promoted supervisors. Our Preventing Sexual Harassment training includes information about implicit bias and implicit bias training.
EMPLOYEE PERSONNEL FILES
California Senate Bill 513 significantly expands what California employers must include in an employee’s personnel file, specifically adding education and training records to the documents employees can inspect, requiring details like training provider, dates, competencies, and certifications. Best practices are to keep a spreadsheet of all employee training with a the column headers being: Employee Name, Trainer Name, Duration of Training, Core Competency, Resulting Certification. Filter by employee name if the employee wishes to inspect the records.
STAY-OR-PAY BAN
Assembly Bill 692 prohibits employers from putting clauses in new employee contracts that make workers pay you back for things like training costs, sign-on bonuses, relocation expenses, or other perks if they quit early—these “stay-or-pay” rules are basically banned.
This only applies to contracts signed on or after that date; old ones are fine unless you renew or change them.
There are a couple narrow exceptions, like for certain college tuition help or upfront bonuses, but only if you follow strict rules (separate agreement, prorated payback over no more than 2 years, no interest, and give them time to talk to a lawyer). You can’t make signing one of these a condition of getting the job.
PAY TRANSPARENCY AND PAY SCALES
Equal pay law for all employees is not extended to non-binary individuals for all types of wages. And for employers with 15 or more employees, job postings must include a pay scale with a reasonable and realistic range. In other words, $50,000 – $300,000 per year is not reasonable or realistic. For more information, refer to Senate Bill 642.
ENFORCEMENT OF “TIP THEFT”
For employees whose wages are partially based on tips (i.e. restaurants), employees who believe the employer is not paying out tips properly can now complain to the labor commissioner for resolution thanks to Senate Bill 648. Formerly, it had to be settled through the court system. Two important things to do know in regard to tips is that managers and supervisors cannot participate in tip pools, and employers cannot deduct credit card fees from tips.
The highlights above represent the changes we believe will have the greatest impact on small businesses. For your reference, we’ve included the corresponding Senate and Assembly bill numbers. If you have any questions about these updates or need further clarification, please don’t hesitate to contact us at OpsTeam@MyOpsManager.com.