California continues to lead the nation in employee protections, and 2026 ushers in one of the most significant changes in recent years. From minimum wage increases to expanded pay-equity enforcement and limits on restrictive employment agreements, workers now have stronger legal protections and clearer avenues to challenge unfair treatment. Employers, meanwhile, are required to update long-standing practices around compensation, job postings, training policies, and personnel access.
Below is an overview of the most important 2026 employment-law developments that California workers and employers need to know.
Minimum Wage and Exempt Salary Threshold Increase
Effective January 1, 2026, the statewide minimum wage increases to $16.90 per hour. Although many municipalities already exceed that amount, this increase matters because it affects the minimum salary required for exempt-classification employees. To qualify for most white-collar exemptions (executive, administrative, and professional), employees must earn at least two times the state minimum wage, meaning the minimum exempt salary threshold rises to approximately $70,304 annually.
This change alone will force many employers to reclassify workers or adjust pay. If an employee is currently treated as salaried exempt but earns below this threshold, the employer must either increase salary or convert the employee to hourly and pay overtime.
Expansive Pay Transparency Requirements
In 2026, California strengthens its pay-transparency laws for employers with 15 or more employees. Job postings must include a good-faith wage range that reflects what the employer actually expects to pay upon hire. Gone are the days of posting artificially broad salary ranges simply to attract applicants or mask actual compensation practices.
Moreover, employers must maintain documentation of these ranges and provide them upon request to applicants and employees. This allows workers to compare their wages against posted ranges and determine whether pay discrepancies may exist.
Broader Equal-Pay Coverage and Longer Filing Periods
California’s Equal Pay Act expands significantly in 2026. First, the protected category no longer refers to “opposite sex,” but instead applies broadly to discrimination based on “another sex,” explicitly including non-binary employees. This modification resolves ambiguity and aligns California law with modern workplace demographics.
Second, pay equity now applies to all forms of compensation, including:
– Salary and hourly wages
– Bonuses
– Profit-sharing distributions
– Equity grants and stock plans
– Vehicle or housing allowances
– Tuition reimbursement
– Health or professional-development benefits
This matters because employers sometimes justify disparities by equalizing base salary while offering different incentive structures. Beginning in 2026, the entire compensation package is part of the legal comparison.
Additionally, employees now have more time to bring claims. The statute of limitations effectively expands to three years, with the ability to recover for up to six years of pay inequity if the violations are ongoing.
Limits on Repayment-Type and “Stay-or-Pay” Agreements
As of 2026, newly-signed agreements requiring employees to repay costs if they resign within a certain period—sometimes disguised as training cost reimbursements—become largely unenforceable. Employers historically used these agreements to deter employees from resigning, especially in medical, corporate, and professional-services fields.
With limited exceptions (true certification costs or licensure fees paid directly to a third-party), agreements that penalize employees for leaving will violate California law. This change dramatically improves job mobility and prevents economic coercion disguised as reimbursement programs.
Increased Record-Access Rights for Employees
California expands employee access to personnel-file information, including formal training records, certification data, and employer-maintained documentation relating to professional development. These records can be critical in compensation disputes, promotion-denial claims, and wrongful-termination matters.
Employees now have the right to:
Inspect these records
Request copies
Receive documentation within legally-established timeframes
Employers must retain these records longer and provide them upon request.
What This Means Going Forward
For workers, 2026 provides more transparency, higher baseline wages, easier access to information, and firmer legal footing when challenging unfair pay. For employers, compliance will require adjusting policies, updating offer letters, cleaning up job postings, auditing compensation structures, and revising employment agreements.
California’s updated laws help close wage gaps, eliminate misleading hiring practices, and reduce contractual restrictions that inhibit fairness and mobility. Anyone working in—or employing workers in—California should review compensation practices now to avoid violations later.
