California & Federal Employment Law Changes Coming in 2026

Staying ahead of the legal curve is critical for every California business owner and employee. As we approach 2026, the legislative landscape is shifting once again, bringing significant updates to wage structures, workplace safety protocols, and employee rights. Failure to adapt to these California law changes can result in costly penalties for employers and missed benefits for workers.

While federal law changes often grab national headlines, California continues to lead the way with robust state-level protections that frequently surpass federal requirements. From a substantial minimum wage hike to new transparency rules regarding pay equity, 2026 is shaping up to be a pivotal year for labor regulations.

Glaser Labor Law breaks down the essential employment law changes you need to know to remain compliant and protected in the coming year.

Minimum Wage Increase to $16.90

One of the most immediate financial impacts for businesses will be the increase in the statewide minimum wage. Starting January 1, 2026, California’s minimum wage will rise to $16.90 per hour.

This adjustment reflects the state’s ongoing effort to keep earnings aligned with the cost of living. For employers, this means immediate payroll adjustments are necessary. It is not just about entry-level staff; a rise in the wage floor often triggers a ripple effect, requiring wage adjustments for employees currently making just above the minimum to maintain internal pay equity.

For low-wage workers, this increase provides essential financial relief, though businesses must prepare for the associated rise in operating costs.

Workplace Know Your Rights Act (SB 294)

Transparency in the workplace is a major focus of the 2026 legislative session. Under Senate Bill 294, also known as the Workplace Know Your Rights Act, employers face a new administrative requirement.

By February 1, 2026, employers must provide a standalone notice to all employees. This document is not a suggestion — it is a mandatory disclosure detailing specific employee rights. The notice must cover critical areas such as protections during immigration inspections and various constitutional rights within the workplace.

The goal of SB 294 is to ensure that workers are not just protected by the law but are actively aware of those protections. Employers should begin drafting these notices well in advance of the February deadline to ensure compliance.

Wage Transparency & Calculation (SB 642)

California has been a pioneer in pay transparency, and SB 642 takes this a step further. This bill redefines how “wage rates” are calculated for pay equity analysis.

Previously, comparisons might have been limited to base hourly rates or salaries. Under the new rules, the definition of wages expands to include:

• Bonuses
• Stock options
• Benefits

This comprehensive view aims to close loopholes where pay disparities might hide in non-salary compensation. Employers will need to conduct more rigorous internal audits to ensure that total compensation packages — not just base pay — are equitable across gender and racial lines.

Paid Family & Medical Leave Enhancements

2026 brings stronger protections for employees who need to take time off to care for themselves or their loved ones. The upcoming changes to Paid Family & Medical Leave focus on employment restoration protections.

In the past, some employees hesitated to utilize their leave benefits due to fear of losing their specific position or status upon return. The new regulations strengthen the guarantee that workers can return to their jobs after taking the necessary leave. This change supports a healthier work-life balance and ensures that employees do not have to choose between their health (or their family’s health) and their career security.

Harassment Training Requirements

Prevention through education remains a top priority. The 2026 updates mandate annual training regarding sexual assault and harassment.

This requirement applies specifically to managers, supervisors, and isolated employees — those who work alone or in small groups where oversight might be limited. By increasing the frequency and targeting the audience of this training, the state aims to reduce incidents of harassment and ensure that leadership is fully equipped to handle and prevent misconduct.

Expanded Leave Access

While the law technically was active after October 2025, 2026 will be the first full year these expansions will be legal. California is broadening the safety net for victims of crime and abuse. The new laws expand access to paid sick and safe time for victims of:

• Domestic violence
• Sexual violence
• Hate crimes

These changes acknowledge that recovery and safety planning take time. By ensuring these leaves are paid and protected, the law provides victims with the financial stability needed to seek legal help, relocate, or receive medical and psychological care without the added stress of lost income.

Meal Period Waivers in Healthcare

While many 2026 changes add restrictions, some offer flexibility. New regulations regarding meal periods will affect healthcare workers.

Under specific conditions, health care employees may now waive certain meal periods, provided there is a written agreement between the employer and the employee. 

This flexibility is often requested in fast-paced medical environments where rigid break schedules can interrupt patient care or shift flow. However, strict documentation will be required to prove that these waivers are voluntary and compliant with the law.

Federal Law Changes and Trends

While the specific California statutes are clear, employers must also keep an eye on federal law changes. For 2026, the federal landscape is heavily focused on the intersection of technology and civil rights.

Key federal trends include:

• AI in Hiring: Scrutiny is increasing on how Artificial Intelligence is used in recruitment to ensure algorithms do not inadvertently discriminate against protected groups.
• Title VII Compliance: There is a renewed national focus on harassment and discrimination standards.
• Remote Work: As remote and hybrid work becomes permanent, federal guidance continues to evolve regarding cross-state employment and hour tracking.

Navigating the Legal Landscape

The changes arriving in 2026 represent a mix of increased administrative duties for employers and enhanced protections for employees. From the minimum wage hike to the nuances of SB 642’s wage calculations, compliance requires diligence.

For employers, the time to review employee handbooks and payroll practices is now. For employees, understanding these new rights is the first step toward advocating for fair treatment in the workplace.

If you are unsure how these employment law changes impact your business or your rights as a worker, do not wait until a dispute arises.

Contact Glaser Labor Law today. Our experienced team is ready to help you navigate the complexities of California and federal labor regulations to ensure you are fully protected.

Glaser Labor Law

With deep roots in Southern California, Glaser Labor Law combines a focus on workplace rights with proven success in broader legal matters. Joel Glaser and his team bring decades of litigation experience to ensure every client receives strong, results-driven representation.