What's New In Employment Law?

California is doubling down on pay equity and transparency in 2026. Building on Senate Bill 1162—which created California’s modern pay data reporting program and job‑posting pay scale rules—the Civil Rights Department (CRD) will continue to require detailed annual pay data submissions, and new legislation sharpens enforcement and refines transparency standards. For HR professionals and in‑house counsel, that means earlier coordination with payroll and talent acquisition, tighter vendor management, and stronger documentation.

The Core Requirements Are Not Changing

California law requires private sector employers with 100 or more employees to submit an annual “Payroll Employee Report” to the CRD. Employers with 100 or more workers hired through labor contractors must also submit a separate “Labor Contractor Employee Report.” The reports are filed through the CRD’s online portal. The deadline is the second Wednesday in May each year; for Reporting Year 2025, that date is May 13, 2026. The CRD’s “Pay Data Reporting” website page and FAQs confirm the cadence, templates, and mechanics, and emphasize that filings must be made through the portal. Failure to file can trigger enforcement action.

What Information is Included in Report?

Employers report workforce counts by establishment, job category, pay band, race/ethnicity, and sex, and must include the median and mean hourly rate for each grouping. The “snapshot period” is a single pay period between October 1 and December 31 of the reporting year.

What’s New for 2026?

For 2026, there are a few new requirements:

• Senate Bill 464, which Governor Newsom signed October 2025, toughens California’s pay data reporting regime by making penalties effectively mandatory when the CRD seeks them and requiring employers to store demographic data separately from personnel records. We also expect adjustments to job categories in 2027. HR should plan now for stricter enforcement and cleaner data governance.

• The California Legislature also enacted SB 642, which is effective on January 1, 2026 and refines the definition of “pay scale” in job postings. The new law also extends the statute of limitations for certain pay transparency and equal pay claims to three years, with a six‑year look‑ Employers should expect greater scrutiny of posted ranges, the documentation supporting those ranges, and retention practices.

Deadlines and Penalties

Under Government Code section 12999(f), the CRD may seek civil penalties of $100 per employee for a first failure to file and $200 per employee for subsequent failures, and recover its enforcement costs.

Practical Trouble Spots

There are a few areas of complication:

• Multi‑entity organizations may need to determine whether related entities comprise an “integrated enterprise,” which affects whether a combined report is permissible.

• Vendor and labor‑contractor arrangements can create timing problems if the contractor’s data are late or incomplete; the statute allows a court to apportion penalties to a labor contractor that failed to provide data, but the client employer is still responsible for filing on time.

• Mergers, acquisitions, and spin‑offs complicate year‑over‑year comparability and snapshot decisions; The CRD’s FAQs address several scenarios and encourage clear remarks when data are missing or changed by corporate events.

The Next Steps

California employers covered by the reporting requirements have a few tasks:

• Build a 2026 reporting calendar. Work backward from May 13, 2026. Set internal cut‑offs for payroll validation, demographic QA, job category mapping, and executive sign‑

• Lock your snapshot period. Choose—and document—a late‑year pay period that produces stable data.

• Coordinate early with labor contractors. Contractually require required data on a firm timeline; specify fields and who will certify the accuracy.

• Tighten data governance. Store demographic data separately from personnel records and review access controls to align with SB 464 commentary.

• Tune job postings. Update the definition and documentation of “pay scale,” expand retention practices, and train recruiters on SB 642 refinements.

• Validate analytics. Recheck pay band mapping, mean/median calculations, and any custom groupings; keep an audit trail of changes.

• Prepare for questions. Brief leaders on how to discuss pay ranges and pay equity initiatives without over‑

Bottom Line

California’s 2026 cycle will not be business as usual. Expect heightened scrutiny of the accuracy and governance of your pay data reporting and sharper expectations around what you publish in job postings. Treat the May deadline as the end of a year‑round process—not a one‑time upload.

Shaw Law Group is tracking the CRD guidance and the rollout of SB 642 and SB 464; if you need a readiness review or updates to job posting and reporting workflows, we can help.

About Shaw Law Group 

At Shaw Law Group, we do more than practice employment law—we partner with employers to build compliant, respectful, and productive workplaces. From day-to-day advice and counsel to impartial workplace investigations, proactive HR audits, dynamic training programs, and sensitive pre-litigation matters, our experienced team helps clients stay ahead of the curve—and out of court.

The post Pay Data Reporting Just Got Tougher for 2026 first appeared on Shaw Law Group.

      

As we approach 2026, California continues to push forward in labor and employment law. Some changes take effect immediately, others phase in, and some are still being finalized. Below is a summary of the most important developments that employers, HR teams, and employees should monitor (or act on) for 2026

Minimum Wage & Exempt Salary Thresholds Increases

One of the most consequential changes on the horizon is the increase in California’s statewide minimum wage, and the corresponding impact on salary thresholds for exempt employees.

Beginning on January 1, 2026, the state minimum wage for all employers will increase to $16.90 per hour (up from $16.50 in 2025). This increase is driven by the state’s inflation adjustment formula.

Because California links the minimum salary for many exempt classifications to the state’s minimum wage, beginning on January 1, 2026, the annual salary threshold for exempt executive, administrative, and professional employees must be at least $70,304 (or $5,858.67/month).

Employers will need to review pay structures for exempt employees to ensure compliance under the higher threshold.

Your action items in this category: 

• Identify workers currently treated as exempt and confirm whether their salaries will meet the new threshold in 2026. Some roles may need reclassification to non-exempt, or salary increases to maintain exemption status.
• Adjust payroll systems and budget for increased wage costs.
• Watch for local minimum wage ordinances (cities and counties may have higher rates) that may further impact wage obligations.

Ban on “Stay-or-Pay” Provisions/Training Repayment Agreements

A key development from the California Legislature in 2025 (with effective timing to watch) is a law targeting “stay-or-pay” agreements, which commonly appear in training repayment or employee mobility clauses.

The Legislature passed a new law, AB 692, that seeks to ban many “stay-or-pay” contracts (i.e., agreements that require an employee to remain employed for a certain period or repay training costs). The law carves out some exceptions, including tuition reimbursement agreements and retention bonus repayment clauses.

Employers must review their existing agreements to determine whether they fall within the ban, and if not, whether they comply with the permitted frameworks. Some older or overbroad repayment or claw back provisions may become unenforceable or need redesign.

Your action items in this category: 

• Inventory all training repayment, educational assistance, and retention bonus repayment agreements.
• Revise or eliminate prohibited stay-or-pay terms, or rework them into permissible forms (e.g., conditional repayment schedules, pro rata repayment, caps, and safe harbor language as may be prescribed).
• Ensure future agreements are compliant under the new law.

Changes to PAGA/“Private Attorney General” Enforcement

Although not exclusively slated for 2026, recent amendments to the Private Attorney General Act (PAGA) in California are affecting how labor law violations are litigated.

California lawmakers cleared significant amendments to PAGA in 2024 aimed at reducing frivolous claims and giving employers more opportunities to cure violations before facing lawsuits. Key changes include increasing the share of civil penalties employees can retain (from 25% to 35%), requiring plaintiffs to show actual violations they personally experienced, and providing greater room for employers to remedy issues before a claim proceeds.

The reforms apply to cases filed on or after the effective date (i.e., after the law is signed) — so, in effect, for many PAGA claims in 2026, the new framework will govern.

Your action items in this category: 

• Reassess your potential exposure under PAGA. With a more constrained regime, some claims may become less viable, but diligence is still critical.
• Ensure compliance programs are in place (e.g., audits, correction protocols, documentation) to reduce the risk of violation in the first place.
• Monitor case law and regulatory guidance on how aggressively courts interpret the new PAGA rules.

Implementation Tips and Risk Mitigation

To stay ahead of compliance challenges in 2026, here are some recommended steps:

• Update your employee handbooks, training programs, and written policies (e.g., repayment agreements, wage practices) now to reflect upcoming changes.
• Bring together HR, legal, finance/payroll, and operations teams to assess the impact of wage increases and classify adjustments.
• Anticipate increased labor costs (especially wages) and build them into your 2026 budgets. In some sectors (healthcare, fast food, covered facilities) escalations may be steeper.
• Strengthen internal audits (wage-hour, exempt/nonexempt, overtime compliance) and ensure prompt remediation practices to reduce exposure, especially in light of the reformed PAGA rules.
• Many California cities/counties have minimum wage or labor ordinance floors above the state rate. Employers must comply with whichever is higher.
• As courts and agencies interpret new laws (especially PAGA changes, stay-or-pay limits, automated decision systems), their rulings will inform best practices.

As always, Shaw Law Group is here to help. Be sure and register for our upcoming webinars, California Employee Handbook Update (2026) and Annual Employment Law Update (2026) to ensure you are on top of these developments.

About Shaw Law Group 

At Shaw Law Group, we do more than practice employment law—we partner with employers to build compliant, respectful, and productive workplaces. From day-to-day advice and counsel to impartial workplace investigations, proactive HR audits, dynamic training programs, and sensitive pre-litigation matters, our experienced team helps clients stay ahead of the curve—and out of court.

The post Key Employment Law Changes for 2026 first appeared on Shaw Law Group.

      

Since the COVID-19 pandemic began in March 2020, telework has become a normal part of many workplaces. For HR professionals, though, remote work raises new compliance questions—especially when employees request telework as an accommodation. The Equal Employment Opportunity Commission (EEOC) has made it clear: telework may be a reasonable accommodation under both the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act.

Here’s what you need to know to keep your organization compliant and prepared.

Telework and Disability Accommodation

Under the ADA and California’s Fair Employment and Housing Act (FEHA), employers must provide reasonable accommodations to qualified individuals with disabilities, unless doing so creates an undue hardship. Telework is one of the accommodations the EEOC specifically highlights.

For HR, this means:

• Look at essential functions: Start by identifying what’s essential and what’s not. If the key duties of a role can be performed remotely, you should give telework serious consideration.
• Interactive process matters: Sit down with the employee, ask about their limitations, and discuss options. Sometimes hybrid arrangements (two or three days a week from home) strike the right balance.
• Policy exceptions may be required: For example, if you have a rule requiring six months’ tenure before employees can telework, you may need to waive that rule for someone with a disability.
• Limits still apply: Employers don’t have to eliminate essential duties, create entirely new jobs, or allow telework that disrupts operations in a significant way.
  The EEOC has long said that employers cannot simply point to a “return-to-office” policy as a reason to deny telework if it would otherwise enable the employee to perform their job.

Telework and Religious Accommodation

Title VII and the FEHA require employers to accommodate sincerely held religious beliefs and practices unless doing so causes undue hardship.

The landscape changed in 2023, when the Supreme Court decided Groff v. DeJoy. Before Groff, employers could deny religious accommodations for almost any burden, even minimal. Now, they must show a “substantial increased cost” or similar hardship to justify a denial.

That’s a big shift for HR. It means you’ll likely see more requests for telework based on religion—for example:

• Allowing an employee to telework on their Sabbath.
• Granting remote work on certain holidays or fasting days.
• Providing flexibility for prayer schedules.

The EEOC recently reinforced that telework may be an appropriate religious accommodation in these situations. For HR, the message is clear: treat religious telework requests as seriously as disability requests.

What Counts as “Undue Hardship”?

This is where HR must be thorough. Post-Groff, you’ll need more than “this is inconvenient” or “we prefer everyone in the office.” You’ll need to document why telework would be disruptive in a meaningful way—for example:

• Costs associated with supervision, technology, or coordination.
• Impacts on client service or collaboration that can’t be solved remotely.
• Security, safety, or confidentiality concerns that can’t be addressed with remote tools.

If you can’t point to a substantial hardship, denying the request could expose the organization to liability.

Practical Steps for HR

So, what’s an HR professional to do? Here are some key things to consider:

• Train managers to spot accommodation requests. Many employees don’t use the word “accommodation.” A statement like “my health condition makes commuting difficult” or “my religious practice requires me to be home Fridays” should trigger HR involvement.
• Run the interactive process every time. Document conversations, explore alternatives, and show you considered the request seriously.
• Get granular about job duties. Break down which tasks require physical presence and which can be done remotely. Don’t overstate the need for in-office work if remote tools suffice.
• Consider hybrid solutions. A mix of in-office and telework may address both the employee needs and operational concerns.
• Keep your documentation tight. If you deny a request, HR must be able to show a concrete, substantial hardship—not just a preference.
• Revisit decisions periodically. Telework capabilities and job duties evolve. What wasn’t feasible two years ago might be possible now.

The Bottom Line for HR

Telework is no longer just a perk—it’s a compliance issue. The EEOC expects employers to evaluate telework requests for both disability and religious accommodation, and courts are holding employers to a higher standard when denying them.

For HR professionals, the safest approach is to:

• Take every request seriously.
• Engage in the interactive process.
• Document, document, document.

Handled correctly, telework accommodations can help employees thrive while keeping your organization legally compliant and operationally strong.

Need help evaluating telework accommodation requests in your workplace? Shaw Law Group can guide you through the process and help ensure compliance.

—

Shaw Law Group, PC

Trusted Employment Law Advisors

Phone: (916) 640-2240 | www.shawlawgroup.com

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About Shaw Law Group 

At Shaw Law Group, we do more than practice employment law—we partner with employers to build compliant, respectful, and productive workplaces. From day-to-day advice and counsel to impartial workplace investigations, proactive HR audits, dynamic training programs, and sensitive pre-litigation matters, our experienced team helps clients stay ahead of the curve—and out of court.

The post Telework as an Accommodation: Guidance for HR on Disability and Religious Requests first appeared on Shaw Law Group.

      

California has always been at the forefront of cannabis regulation. Medical marijuana was legalized nearly three decades ago, and Proposition 64 made recreational use lawful in 2016. But legalization for personal use has never meant unlimited rights in the workplace. Until recently, employers had broad discretion to take action against applicants or employees who tested positive for cannabis—even if the use was off-duty and had no impact on job performance. That changed on January 1, 2024, when two new laws, AB 2188 and SB 700, took effect and significantly changed the rules in this area.

The New Legal Landscape

Under AB 2188, California employers may no longer discriminate against individuals simply because they use cannabis on their own time and away from the workplace. The law prohibits employers from relying on tests that detect only “non-psychoactive cannabis metabolites”—that is, chemical traces that can remain in a person’s body for days or weeks after use, long after any impairment has subsided. This development is a significant shift from past practice, when a positive cannabis test often meant automatic rejection of an applicant or discipline of an employee, regardless of whether the individual was impaired.

SB 700 complements AB 2188 by prohibiting employers from asking applicants about their past cannabis use. Taken together, the two laws make clear that California workers are entitled to some privacy when it comes to legal, off-duty activities. However, neither law allows cannabis possession or use in the workplace or prevents employers from taking corrective action when an employee is impaired at work. Employers still have every right—and, in many cases, a legal obligation—to ensure a safe, drug-free environment.

Important Exceptions

The new protections are not absolute. Certain industries and roles remain outside the reach of AB 2188. For example, positions that require federal security clearances or background checks remain subject to federal drug-free workplace rules. The construction trades also enjoy a special exemption that allows employers to continue testing for cannabis metabolites. And nothing in the new laws limits an employer’s ability to prohibit use or possession of cannabis on the job. The state has drawn a clear line: off-duty use is protected in most cases, but impairment during work is not.

What Employers Should Do Now

For California employers, these developments mean workplace policies and practices must be updated. Drug-testing programs that rely on outdated methods risk violating the new law. Handbooks should be revised to reflect the distinction between off-duty use and on-the-job impairment. Supervisors need training to recognize potential signs of impairment and to respond in a way that is consistent, defensible, and respectful. Employers also should communicate these changes to employees, so everyone is clear about the workplace expectations.

At the same time, employers must remain alert to situations where federal law or safety concerns demand stricter standards. For example, multistate employers face the added challenge of balancing California’s rules with different requirements in other jurisdictions.

What Employees Need to Understand

Employees should recognize that although the law now protects lawful cannabis use away from work, it does not grant unlimited freedom. Showing up impaired, using cannabis during work hours, or bringing cannabis to the workplace remain legitimate grounds for discipline. Employees in federal or safety-sensitive roles may not enjoy the same protections as others. The bottom line: off-duty use is shielded, but workplace performance and safety still control the employer’s response.

Looking Ahead

The new cannabis protections reflect a broader trend in California toward respecting employees’ rights to engage in lawful off-duty conduct. At the same time, the laws leave many questions unanswered, particularly around what counts as “impairment” and how employers can prove it. Litigation likely will shape these boundaries in the years to come. For now, the safest path is for employers to update policies, train supervisors, and ensure consistent enforcement. Employees, for their part, should stay informed about their rights while recognizing their ongoing responsibility to remain fit for duty.

Still confused? Join us for our webinar, “High Stakes: Navigating California ‘s New Cannabis Workplace Rules,” on September 23, 2025, at 9:00 a.m.  As always, we will discuss best practice and answer all of your questions.  Register here!

About Shaw Law Group 

At Shaw Law Group, we do more than practice employment law—we partner with employers to build compliant, respectful, and productive workplaces. From day-to-day advice and counsel to impartial workplace investigations, proactive HR audits, dynamic training programs, and sensitive pre-litigation matters, our experienced team helps clients stay ahead of the curve—and out of court.

The post Pot at Work: Understanding California Law first appeared on Shaw Law Group.

      

President Trump’s so-called “Big, Beautiful Bill” has been making headlines, and for good reason — it’s packed with changes that directly impact employers and employees alike. Although much of the media coverage has focused on the political angle, HR professionals, payroll managers, and business owners need to be thinking about the very practical question: What does this new law mean for my workplace?

One of the most immediate effects of the bill is how it reshapes wage withholding, overtime rules, and ultimately, employee take-home pay. Employers will need to revisit their payroll calculations to ensure compliance and avoid costly errors. The bill also brings significant changes to Medicaid, SNAP, and healthcare coverage in California — programs on which many employees rely — which could spark questions, concerns, and even confusion in the workplace.

From a compliance standpoint, businesses will need to adjust payroll systems, update policies, and refresh employee communications. This isn’t just a technical exercise; clear communication will be essential to maintain trust and minimize disruption. When benefits or take-home pay change, employees notice — and leadership teams should be ready to address those concerns with transparency and empathy.

Finally, the bill includes new enforcement mechanisms that employers must take seriously. Being proactive now will help you avoid penalties later. That means reviewing your systems, preparing for questions, and aligning HR and finance teams on the changes.

Want a deeper dive? Join us on September 16 for our webinar, “Big Changes Ahead: The Big Beautiful Bill’s Impact on California Workplaces” where we’ll walk through:

• How the bill affects wage withholding, overtime, and employee take-home pay
• The implications for Medicaid, SNAP, and healthcare coverage in California
• What payroll and policy adjustments are required — and how to make them smoothly
• Strategies for anticipating and addressing employee concerns

This is a can’t-miss session for anyone responsible for compliance or employee communications. Reserve your spot today and make sure your organization is ready. 

Happy Monday!

About Shaw Law Group 

At Shaw Law Group, we do more than practice employment law—we partner with employers to build compliant, respectful, and productive workplaces. From day-to-day advice and counsel to impartial workplace investigations, proactive HR audits, dynamic training programs, and sensitive pre-litigation matters, our experienced team helps clients stay ahead of the curve—and out of court.

The post Trump’s “Big, Beautiful Bill” – What Employers Need to Know first appeared on Shaw Law Group.