This is the second of two parts, highlighting the top 10 laws and regulations affecting California businesses in 2026.
6. Wage judgment penalties
On Jan. 1, 2026, SB 261 expanded the potential liabilities for employers that fail to pay a final wage judgment. Under the new law, if an employer fails to pay a final judgment within 180 days after the appeal period ends, a court may impose civil penalties up to three times the amount of the unpaid judgment, including interest.
Courts are also required to award reasonable attorneys’ fees and costs to the plaintiffs who prevail in cases that are either brought by them, the labor commissioner or a local district attorney.
7. Minimum wage change
The state’s minimum wage increased to $16.90 an hour on Jan. 1, 2026. Additionally, the minimum salary requirement for a full-time exempt employee (meaning they are exempt from overtime rules) increased to $70,304.
Keep in mind that many local jurisdictions — counties and cities — may have higher minimum wages than the state. Also, fast food employees have their own minimum wage of $20 an hour. Additionally, for fast food workers to qualify as exempt, they must earn twice the fast-food minimum wage.
8. Personnel record retainment
Effective Jan. 1, 2026, SB 513 amended Labor Code section 1198.5 by expanding what documents qualify as a “personnel record” to which current and former employees have the right to inspect and copy.
The new law adds education and training records to the definition of personnel records if the employer maintains them.
For HR, the new category may include:
- Training certificates
- Internal or external course completion records
- Vendor-provided training documentation
- Skill or competency tracking records
- Certifications related to job duties
If your organization maintains training or education records, your HR team will need to ensure those records are complete, accurate and ready for inspection.
9. Paid Family Leave program expands
California’s Paid Family Leave program provides up to eight weeks of partial wage replacement for employees who are caring for ill family members, bonding with a new child or handling a military-related exigency.
Starting in July 2028, the new law, SB 590, expands these benefits to cover employees who care for a “designated person,” who may be related by blood or with whom the employee has a relationship that is equivalent to a family relationship.
To qualify, the employee, when requesting benefits, must:
- Identify the designated person; and
- Attest under penalty of perjury either how they are related by blood to the designated person or how their relationship is equivalent to a family relationship.
10. Pay transparency and equal pay
SB 642 expanded the statute of limitations to bring a civil action for violations of California’s Equal Pay Act to three years after the last date the cause of action occurs from the prior two years. It also requires that an employee is entitled to seek and obtain relief for the entire time during which the violation took place, up to six years.
The legislation also amended the law, which had prohibited employers from paying employees of the “opposite sex” differently for the same job and with the same experience. To account for non-binary genders, the law changed “opposite sex” to “another sex.”
