Every January, new California employment laws take effect and 2026 is no different, bringing changes to employment contracts, pay data reporting, paid family leave, and other employment-related topics. The following list highlights five new California employment laws for employers to be aware of in the year ahead.

Changes to Annual Pay Data Reporting (SB 464)

Senate Bill (SB) 464 brings changes to annual pay data reporting for 2026 and 2027. Previous pay data reporting laws required covered employers, to submit annual pay data reports to the California Civil Rights Department (CRD) for a “snapshot” period. The reports covered employee counts by race, ethnicity, and sex across 10 job categories; employee earnings by pay bands (including hours worked); and the mean and median hourly pay rates by race, ethnicity, and sex. Noncompliance carried discretionary penalties of $100 per employee, with an increase to $200 per employee for repeat violations.

Starting in 2026, penalties for noncompliance will become mandatory upon CRD request. Therefore, a covered employer that fails to file could face $50,000 to $100,000 in fines. If a violation is due to a labor contractor failing to provide the required data, courts may shift part of the penalty to the contractor. Additionally, employers will be required to store demographic data separately from personnel records, which may create challenges for employers who keep records electronically. For 2026, reports to the CRD are due by May...

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