Many jurisdictions have recently enacted, or are considering enacting, legislation limiting “stay-or-pay” compensation structures, which require employees to repay their employers certain amounts either upon or as a result of a termination of their employment relationship. California has implemented one of the most comprehensive bills in this regard, which represents a significant expansion of California’s restrictions on contractual restraints affecting worker mobility. Assembly Bill (AB) 692 prohibits most employment‑related repayment and “exit‑fee” provisions in agreements that are entered into on or after January 1, 2026. Codified as Section 16608 of the California Business and Professions Code and Section 926 of the California Labor Code, the law declares such provisions unlawful restraints on trade, rendering them void and exposing employers to civil liability. This Legal Update provides a comprehensive analysis of the statute, its exemptions, and practical guidance for employers seeking to structure compensation and training arrangements in compliance with the new law.
AB 692 targets what are commonly referred to as “stay-or-pay” provisions—i.e., contractual terms that require workers to pay money to an employer, training provider, or debt collector as a result of or upon termination of employment. The statute is meant to further California’s longstanding public policy, expressed in Business and Professions Code Section 16600 et seq., that...
from the the-'fraud'-is-coming-from-inside-the-house dept Back in February the Trump FCC announced it was launching new “reforms” of a major bipartisan FCC program that helps poor people afford bro...