California 2025 Bill Signing Wrap Up: New Employment Laws

Seyfarth Synopsis: With Governor Newsom's October 13 deadline to sign bills behind us, we review California's new employment laws. The most notable among them are new pay equity requirements, amendments to Cal-WARN and leave laws, and extensions of meal and rest period exemptions for certain industries.

According to Chris Micheli, Governor Newsom approved 794 and vetoed 123 of the 917 bills presented to him at the conclusion of this first year of the 2025-26 Legislative Session. Below is our summary of the key labor and employment laws that will soon impact California employers. All new laws are effective January 1, 2026, unless otherwise stated.

Soon-to-be-New Laws

Anti-Discrimination and Harassment Laws

SB 642 – Definition of Pay Scale

Current law requires that employers make available the "pay scale" of a position to a candidate applying for that position. As we explained in detail here, SB 642 revises the definition of "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 bill also expands the statute of limitations to assert pay equity claims from two years to up to three years after the cause of action occurs, and allow recovery of lost wages for the entire time during which the violation occurred, up to six years. "Wages" and "wage rates" are defined in the bill as including, for purposes of Labor Code Section 1197.5 only, "all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits."

This bill amends Sections 432.3 and 1197.5 of the Labor Code.

SB 464 – Employer Pay Data

SB 464 requires an employer to collect and store any demographic information gathered by an employer or labor contractor for the purpose of submitting the required pay data report to the Civil Rights Department ("CRD") separately from employees' personnel records, and requires a court to impose a civil penalty against an employer that fails to file the pay data report if requested to do so by the CRD. The bill also, beginning January 1, 2027, increases the number of job categories on which the employer must report from 10 to 23.

This bill amends, repeals, and adds Section 12999 of the Government Code.

AB 250 – Extended SOL for Sexual Assault / Harassment Claims

AB 250 extends the eligibility period for revival of claims seeking to recover damages suffered as a result of an alleged sexual assault that would otherwise be barred prior to January 1, 2026 because the applicable statute of limitations has or had expired. To revive sexual assault claims, including derivative claims for wrongful termination and sexual harassment, among others, the plaintiff must demonstrate that one or more entities legally responsible for damages engaged in a cover up.

The bill defines a "cover up" as a "concerted effort to hide evidence relating to a sexual assault that incentivizes individuals to remain silent." The bill permits a cause of action for any such claim to proceed if already pending in court on the effective date of the bill or, if not filed by that date, to be commenced between January 1, 2026, and December 31, 2027.

This bill amends Section 340.16 of the Code of Civil Procedure.

SB 303 – Bias Mitigation Training

SB 303 provides that an employee's assessment, testing, admission, or acknowledgment of their own personal bias that was made in good faith and solicited or required as part of a bias mitigation training does not constitute unlawful discrimination under FEHA.

This bill adds Section 12940.2 to the Government Code.

SB 617 – WARN

SB 617 amends the California Worker Adjustment and Retraining Act (Cal-WARN) to require employers to include in the WARN notice whether the employer plans to coordinate services through the local workforce development board or another entity, and information regarding the statewide food assistance program known as CalFresh.

This bill amend Labor Code sections 1401 and 2810.8.

Leave Laws

SB 590 – Paid Family Leave – Designated Person

Continuing the "designated person" trend from prior years' leave legislation, beginning July 1, 2028, SB 590 expands eligibility for benefits under the paid family leave program to include individuals who take time off work to care for a seriously ill "designated person." The "designated person" definition aligns with the California Family Rights Act "designated person" definition, which includes any individual related by blood or whose association with the employee is the equivalent of a family relationship.

An employee identifies the designated person the first time they file a claim for family temporary disability insurance benefits to care for a designated person, and is required to state under penalty of perjury, how they are associated with that person by blood or the equivalent of a family relationship.

This bill amends, repeals, and adds Sections 3301, 3302, and 3303 of the Unemployment Insurance Code.

AB 406 – Judicial Proceeding and Jury Duty Leaves
** Effective in part October 1, 2025**

AB 406 expands the reasons for use of California Paid Sick Leave under the Healthy Workplaces Healthy Families Act of 2014 ("HWHFA") effective October 1, 2025, and amends the state's unpaid job-protected leave to include these additional reasons effective January 1, 2026. These amendments continue the state's recent trend of annual updates to paid sick leave, which was significantly revised in 2024 and 2025.

The most recent changes allow employees to use paid sick leave and protected unpaid leave if they or a family member are a victim of certain crimes and are attending judicial proceedings related to that crime. Such judicial proceedings include, but are not limited to, any delinquency proceeding, a post-arrest release decision, plea, sentencing, postconviction release decision, or any proceeding where a right of that person is an issue. The term victim in this specific covered reason is defined as a person against whom a violent felony, serious felony, and/or felony theft or embezzlement is committed, as well as a person who suffers direct or threatened physical, psychological, or financial harm due to the commission or attempted commission or specific crimes or delinquent acts.

The bill also amends the existing jury duty leave law, to remove the requirement that employees must provide reasonable notice prior to taking time off to serve on a jury. However, if an employee uses paid sick leave or unpaid job-protected leave for jury duty, the same notice standard applies for this covered reason as for other covered reasons of use under these provisions, i.e. reasonable advance notice unless advance notice is not feasible.

This bill amends Section 12945.8 of the Government Code, and amends Section 246.5 of, amends and repeals Sections 230.2 and 230.5 of, and adds and repeals Sections 230 and 230.1 of, the Labor Code.

Records Requirement Law

SB 513 – Personnel Records

SB 513 requires that personnel records relating to the employee's performance include education and training records and require the employer ensure those records contain the following information: employee name, training provider name, the duration and date of the training, core competencies of a training – including skills in equipment or software – and the resulting certification or qualification.

This bill amends Section 1198.5 of the Labor Code.

Wage and Hour Laws

AB 692 – Employment Contract Repayment Prohibition

AB 692 makes it unlawful for contracts entered into on or after January 1, 2026, to require the worker pay an employer a debt if the worker's employment or work relationship terminates. The bill authorizes a private right of action and specifies civil penalties. This law does not apply to certain agreements, including those involving discretionary bonuses or relocation payments, provided they meet set criteria, including: (1) repayment terms must be in a separate agreement from the primary employment contract; (2) the worker must be advised of the right to consult an attorney and given at least 5 business days to do so before signing; (3) any repayment obligation for early separation must be prorated based on the remaining retention period (up to 2 years) and cannot accrue interest; (4) the worker must have the option to defer receipt of the payment until the end of the retention period without repayment obligation; and (5) repayment may only apply if the employee leaves voluntarily or is terminated for misconduct. Any person in violation of the prohibitions set forth in this bill shall be liable for the greater of a worker's actual damages or up to $5,000 in penalties per worker, injunctive relief, and attorneys' fees and costs.

This bill adds Section 16608 to the Business and Professions Code, and Section 926 to the Labor Code.

AB 751 – Rest Periods – Petroleum Facility Safety Sensitive Positions

AB 751, signed into law on July 14, 2025, indefinitely extends the exemption from rest period requirements for safety-sensitive positions at a petroleum facility and specifies that the exemption also applies to employees who hold a safety-sensitive position at a refinery that produces fuel through the processing of alternative feedstock. The exemption was previously slated to sunset on January 1, 2026.

This bill amends Section 226.75 of the Labor Code.

SB 648 – Enforcing Tip Theft

SB 648, signed into law on July 30, 2025, authorizes the Labor Commissioner to investigate and issue a citation or file a civil action for any gratuities taken or withheld by an employer.

This bill amends Section 351 of the Labor Code.

SB 693 – Exemption from Meal Period Requirements

SB 693, signed into law on July 30, 2025, expands the categories of employees exempt from the state's meal period requirements to include employees of a "water corporation." "Water corporation" is defined as "every corporation or person owning, controlling, operating, or managing any water system for compensation within this State."

This bill amends Section 512 of the Labor Code.

SB 261 – DLSE Enforcement of Wage Judgments

SB 261 will subject an employer to a civil penalty of not more than three times the amount of an outstanding judgment if a final judgment arising from the employer's nonpayment of work performed in this state remains unsatisfied after 180 days. The bill permits the employer to demonstrate by clear and convincing evidence that good cause exists to reduce the amount of the penalty. Any Court-assessed civil penalty would be distributed 50% to the employee and 50% to the Division of Labor Standards Enforcement ("DLSE") for enforcement of labor laws. A prevailing employee will also recoup all reasonable attorney's fees and costs incurred in enforcing the judgment.

This bill amends Section 98.2 of, and adds Sections 238.05 and 238.10 to, the Labor Code.

SB 809 – Independent Contractors and Employee Vehicle Business Expenses

SB 809 provides, and states as declarative of existing law, that mere ownership of a vehicle, including a personal vehicle or a commercial vehicle used by a person in providing labor or services for remuneration does not make that person an independent contractor. The bill also provides, and states as declaratory of existing law, that the duty of an employer to indemnify its employees for reasonable business expenses, applies to the use of a vehicle owned by an employee and used by that employee in the discharge of their duties. The bill also establishes the "Construction Trucking Employer Amnesty Program" which relieves eligible construction contractors from liability for statutory or civil penalties from misclassification of drivers as independent contractors if the contractor executes a settlement agreement with the Labor Commissioner by January 1, 2029 that contains certain driver classification provisions.

This bill adds Sections 2750.9, 2775.5, and 2802.2 to the Labor Code.

AB 858 – Rehiring and Retention of Displaced Workers

As we discussed here and here, current law provides certain hospitality employees a right to rehire after being laid off for COVID-related reasons until December 31, 2025. AB 858 extends operation of these provisions to January 1, 2027, and allows DLSE enforcement of violations occurring before December 31, 2026 to be enforced after the revised sunset date.

This bill amends Section 2810.8 of the Labor Code.

AB 774 – Wage Garnishment

AB 774 requires employers to provide a levying officer with additional information in the employer's return under the Wage Garnishment Law.

This bill amends, in relevant part, Code of Civil Procedure sections 706.021-022, 706.105, 706.126.

SB 294 – The Workplace Know Your Rights Act

SB 294 establishes the "Workplace Know Your Rights Act" under which an employer will be required to provide a stand alone written notice to each current employee as well as employees upon hire with certain workers' rights, including workers' compensation, immigration agency inspections, and law enforcement actions at the workplace. This obligation commences on or before February 1, 2026, and continues annually thereafter. The bill requires the Labor Commissioner to develop a template notice that must be available on or before January 1, 2026, and updated annually. The bill also requires, subject to an employee's request, that the employer notify the employee's designated emergency contact if the employee is arrested or detained at work. The bill carries an anti-retaliation provision and will be enforced by the Labor Commissioner with a penalty of $500 per employee per violation, except that the penalty for a violation of the emergency contact provision will be an amount up to $500 per employee for each day the violation occurs, up to a maximum of $10,00 per employee.

This bill adds Part 5.6 (commencing with Section 1550) to Division 2 of the Labor Code.

AB 1340 – Gig Workers

AB 1340 will allow transportation network company drivers to form, join, and participate in a union, collectively bargain as an industry-wide unit, and engage in concerted activities without impacting a drivers status as an independent contractor.

This bill adds Chapter 10.7 (commencing with Section 7470) to Division 3 of the Business and Professions Code, and adds Section 7927.710 to the Government Code.

SB 66 – Civil Discovery – Initial Disclosures

SB 66 removes the sunset date on the requirement in civil actions that initial disclosures be made within 60 days of a demand by any party.

This bill amends and repeals Section 2016.090 of the Code of Civil Procedure.

VETOED BILLS

SB 7 – Automated Decision Systems

The Governor vetoed SB 7 on October 13, citing various reasons including wanting to assess the efficacy of the forthcoming California Privacy Protection Agency regulations to address the concerns sought to be addressed by this bill. Read our summary of the AI employment discrimination regulations here. However, the Senate is reconsidering the Governor's veto.

SB 7 would have required employers utilizing artificial intelligence ("AI") "automated decision systems" ("ADS") to make "employment-related decisions" to provide pre-use and post-use written notice of that use to all workers directly or indirectly affected by the ADS.

The pre-use notice for employment-related decisions, not including hiring, would have needed to be made (1) at least 30 days before an employer first deploys an ADS; (2) if an ADS is already in effect, by no later than April 1, 2026; and (3) within 30 days of hiring a new worker. A post-use notice issued after an employer has primarily relied on an ADS to make discipline, termination, or deactivation decisions would have needed to be made at the time the employer informs the employee of the decision, and allow employees to request a copy of the worker's own data relied on in making such a decision. Employers would also have been required to notify a job applicant of the use of ADS in hiring decisions.

In addition to other prohibitions, employers would have been prohibited from relying solely on an ADS when making a discipline, termination or deactivation decision and are required to use a human reviewer to review the ADS output and other information relevant to the decision. The bill carries an anti-retaliation provision that would prohibit an employer from discharging or in any manner discriminating against any worker who asserts their rights under the bill. Under the bill, the Labor Commissioner would have had enforcement authority to issue citations and file civil actions against employers.

This bill would have added Part 5.5.5 (commencing with Section 1520) to Division 2 of the Labor Code.

SB 7 was the first significant employment-related bill to seek the Governor's approval, with 2024 AI legislation also failing to make the cut, and a similar ADS bill, AB 1018, failing this legislative season. AB 1018 would have required employers to provide employees with disclosures regarding AI-driven decisions and to give employees a chance to appeal the decision. AB 2930 of 2024 also proposed regulating the use of ADS in employment practices, including pay, promotion, hiring, termination, and task allocation. At that time, we previewed an expectation of more action on this topic in years to come, as the Governor's veto message on non-employment AI bill AB 1047 previewed. We similarly expect AI legislation in the employment space and beyond to continue.

AB 1326 – Right to Wear A Mask

AB 1326 would have provided individuals with the right to wear a medical grade mask in a public place to protect themselves or the public with regard to communicable disease, air quality, or other health factors. Employers would have been able to require workers in an employment setting to remove a health mask to perform their essential functions. Governor Newsom vetoed the bill as unnecessary and likely to cause confusion.

This bill would have added Chapter 26 (commencing with Section 28050) to Division 20 of the Health and Safety Code.

SB 1136 – Immigration and Work Authorization

SB 1136 would have required employers with greater than 25 employees to release an employee upon request for up to five unpaid working days in a 12-month period to attend appointments, interviews, or any other proceeding or meeting concerning the employee's immigration status or a related matter. The bill would have required any employee whose employment is terminated due to an inability to provide documentation of proper work authorization to immediately be reinstated to their former classification without loss in seniority, subject to proper work authorization. An employer who is notified that an employee has been detained or incarcerated as a result of a pending immigration or deportation proceeding would have been required under the bill to place the employee on an unpaid leave of absence for a period not to exceed 12 months. The bill would have prohibited an employer from taking adverse action against an employee because of immigration status or national origin, or solely because the employee is subject to immigration or deportation proceedings.

This bill would have added and repealed Chapter 3.3 (commencing with Section 1019.6) of Part 3 of Division 2 of the Labor Code.

SB 703 – Ports: Truck Driver Independent Contractors

SB 703 would have required trucking companies and truck drivers not classified as employees by the company, to provide to the Port of Long Beach or Port of Los Angeles, certain information including the trucking company's sworn affidavit that the company is withholding all required taxes from the wages of any driver who is considered an employee. The bill would have required the trucking company to update a port within 30 days of a change to its operation resulting in more than 50% of its employees being replaced by independent contractors and impose a $5,000 penalty for failure to do so. It would have imposed a $50,000 penalty for providing misleading information for purpose of representing compliance with the above requirements. Governor Newsom vetoed the bill because it "would significantly disrupt port operations by requiring these ports to collect and retain information on thousands of trucks each day." The Senate is reconsidering the Governor's veto.

This bill would have added Part 3 (commencing with Section 2000) to Division 6 of the Harbors and Navigation Code, and added Article 1.6 (commencing with Section 2790) to Chapter 2 of Division 3 of the Labor Code.

SB 355 – Notice Requirement for Judgment Debtor Employers

SB 355would have required that, within 60 days after a judgment is entered against an employer requiring payment to an employee or to the state, the employer inform the Labor Commissioner that: (1) the judgment is fully satisfied; (2) the bond required by subdivision Section 238(a) has been posted (if applicable); or (3) the judgment debtor has entered into an agreement for the judgment to be paid in installments. Failure to comply with these notice requirements would have resulted in a civil penalty of $2,500. The Governor vetoed this bill as "costly, duplicative, and unlikely to significantly improve collections of unpaid wages."

This bill would have added Section 96.9 to the Labor Code.

Workplace Solutions

Tune in to our October 15, 2025 webinar in which we'll explore the final slate of new laws. Please check back in with us here at Cal Peculiarities for regular check-ins on California policy and legislative updates.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.