New Minimum Wage and Exempt Salary For 2026
The new statewide California minimum wage will be $16.90 as of January 1, 2026. Remember that if you are in a jurisdiction such as Los Angeles, San Diego, San Francisco, or MANY other locals, your minimum wage will be HIGHER. I will do a complete location by location breakdown of all the minimum wages in California in a separate article.
But with the new statewide minimum wage comes a new statewide salary test for most exempt employees. As of January 1, 2026, the threshold for executive, administrative, or professional employees will be $70,304, annually. This does NOT include computer professionals or those in industries such as health care or fast food where the state minimum wage is higher. Your exempt salary thresholds will be higher accordingly.
New “Workplace Know Your Rights Act” Regarding Immigration Issues (SB 294)
There have been a few bills and new laws recently with this similar title, but this new law is in direct response to the recent uptick in ICE raids. As you all should know, I published several articles a few months back providing information that employers can disseminate to their workforce. But now, the state is mandating action.
Effective 2026, employers must provide an annual written notice to each current employee that explains certain workers’ protections against unfair immigration-related practices and their constitutional rights when interacting with law enforcement in the workplace. The first notice must be provided on or before February 1, 2026. The state has said it will publish a sample notice by January 1, but they are often delinquent. Our office will provide a sample one as part of our annual employee handbook update program, to be safe.
In addition, upon request, employers must notify a designated emergency contact in the event an employee is arrested or detained at work. Employers must give employees an opportunity to designate this emergency contact no later than March 30, 2026 (or at the time of hire for employees hired after that date).
As I said, I have addressed issues related to ICE raids and audits in prior MMB articles, and I highly recommend you review them if you missed them. You can find these and other past briefings at www.mondaymorningbriefings.com.
Ban on “Stay-or-Pay” Provisions (AB 692)
California has always been at the forefront of all states in its attempt to encourage employee mobility. It was the first state to expressly ban post-employment non-compete clauses, nearly 100 years ago, and it has double downed on this commitment over the years. Court decisions and nuanced legislation have reinforced this prominent feature of the California employment law landscape.
In line with this commitment, the state will now ban what it calls “stay-or-pay” contracts, that is, those employment agreements that require employees to repay bonus or incentive compensation if they leave before a date certain. The newest ban will focus on training repayment agreements. However, AB 692 carves out exceptions for some of the most common arrangements, like tuition reimbursement and retention bonus repayment. If you currently include a similar provision for ANY level of employee, please reach out so we can examine the effect of this new law.
New 30-Day Timeframe to Provide Data Breach Notifications (SB 446)
California is not the first state to require data breach notification timeframes, but it has now joined the list. The state’s new strict and intricate 30-day window requires impacted organizations to act quickly. Because there are related moving parts in the case of a data breach, including insurance implications, we encourage you to always reach out immediately in the case of a suspected breach of employee data.
Paid Family Leave Benefits to Care for “Designated Persons” (SB 590)
California will allow eligible employees to receive paid family leave benefits to care for a seriously ill “designated person.” This includes any blood relative or individual who is the equivalent of family, even if the individual is not biologically or legally related to the employee. This change mirrors the change made to other leave provisions under California law. However, this provision does not go into effect until July 1, 2028 and only impacts state paid benefits.
Updates to Job Posting Requirements and Equal Pay Act (SB 642)
This new law updates California’s requirement to provide pay scales in job postings by redefining “pay scale” to mean “a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.” The law also makes significant changes to California’s Equal Pay Act, including extending the statute of limitations for pay discrimination claims to three years and allowing potential recovery of lost wages up to six years.
Large AI Transparency Law for Frontier Models (SB 53)
California’s new Transparency in Frontier Artificial Intelligence Act is the nation’s first comprehensive attempt to require transparency for the most powerful artificial intelligence systems. The new law includes core requirements for frontier developers and other provisions that impact tech companies, such as whistleblower protections. I will be doing a deeper dive into AI issues for employers in general, and we will be expanding this topic in our employee handbook update for 2026.
Cal-WARN Notice Changes (SB 617)
Many folks do not realize that California has its own version of the WARN Act, the law that requires advance notification in the event of mass layoffs, facility closures, and related employee events. For those who may be conducting mass layoffs or plant closures for 2026, this new law expands what must be included in the notices. Federal and state WARN laws are complicated – always connect with us in the case of such a large-scale employee event.
