Our 3rd and final post of our 2026 Regulation Review includes the last 5 of California’s new regulations. These regulations are SB 464 Expand Pay Data & Demographic Transparency, AB 858 Hiring & Retention of Displaced Workers, AB 406 Victim/Crime Protections, Jury Duty, and Witness Leave Allowance, AB 692 “Stay or Pay” Agreement, and Use of Automated-Decision Systems and Artificial Intelligence in Employment.
SB 464: Expand Pay Data & Demographic Transparency
For those with 100 or more employees, this is an update to the existing CA pay data reporting. This bill requires qualifying employers to collect and store demographic information (e.g., race, ethnicity, sex, sexual orientation) used for pay data reporting separately from personnel records; expands reporting categories and dimensions—adding sexual orientation (if voluntarily disclosed); and increases the job categories from 10 to 23.
Voluntary self identification forms must be retained separately from personnel records.
AB 858: Hiring & Retention of Displaced Workers (Covid-19 Pandemic)
Applicable to employers of the following enterprises:
- Hotel
- Private Club
- Event Center
- Airport Hospitality Operation
- Airport Service Provider
- Janitorial
- Building Maintenance
- Or Security Services
These employers must offer laid-off employees specified information about job positions that become available for which they are qualified, and must offer positions to those laid-off employees based on a preference system.
Existing law defines the term “laid-off employee” to mean any employee who was employed by an employer for six months or more and whose most recent separation from active employment occurred on or after March 4, 2020, and was due to a reason related to the COVID-19 pandemic.
This bill extends the December 31, 2025, repeal deadline until January 1, 2027.
AB 406: Victim/Crime Protections, Jury Duty, and Witness Leave Allowance
This bill took effect immediately upon signing, October 1, 2025.
This broadens the list of permissible reasons employees can use Paid Sick and Safe Time (also known as Paid Sick Leave). Most notably, the law now incorporates expanded “safe time” protections to extend leave rights to victims of certain crimes — and their family members — for a range of legal and administrative proceedings; allowing the application of Paid Sick Leave for Jury Duty and Witness Leave.
AB 692: “ Stay Or Pay” Agreement
In summary, this bill is pointed at banning any contract or agreement that would require an employee to remain employed for a certain period or repay training costs or other discretionary or unearned monetary payment (i.e. signing bonus, equity programs, long term incentive plans).
A worker may bring a civil action in court against the employer for violations, including on behalf of similarly situated workers. Employer may be subject to pay actual damages or a minimum of $5,000 per worker (whichever is greater).
This applies to new contracts entered on or after January 1, 2026.
The law carves out specific exceptions (below) as long as the list of applicable requirements are satisfied.
- Tuition Repayment for a transferable credential
- Contracts related to government approved apprenticeship programs
- Sign on bonuses
Requirements for Exceptions (vary depending on the type of agreement):
- Must be a separate agreement
- Cannot be a condition of employment
- Must specify repayment amount (must prorate)
- Repayment will vary depending on whether resigned or terminated
- May require employer to advise that employee can consult legal and provide 5 days to do so before signing.
- Retention period cannot exceed two years
Use of Automated-Decision Systems and Artificial Intelligence in Employment
The California Civil Rights Council (CRC) has adopted new regulations governing how automated-decision systems (ADS) and artificial intelligence (AI) may be used in employment, effective October 1, 2025.
These rules clarify how the Fair Employment and Housing Act (FEHA) applies to ADS and AI, which must not result in discrimination against applicants or employees based on protected characteristics. It is unlawful to use automated technologies in areas like applicant screening, employee evaluation, and other decision-making processes if it results in a person or group of people being negatively impacted in employment decisions based upon a protected characteristic.
Although it isn’t required, anti-bias testing is urged as it is the only relevant evidence (or notable lack thereof) to defend an employer in the event of a discrimination claim.
Here at People Rock HR we know that the new year transition can be difficult! That is why we are here to help! Give us a call today to start 2026 off right.
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