California’s Assembly Bill (AB) 692 took effect on January 1, 2026, impacting repayment and “stay-or-pay” agreements. For a summary of the limitations and requirements stemming from this law, please see our earlier blog post. California employers should already be evaluating offer letters, bonus agreements, training repayment provisions, tuition arrangements, and other documents that impose repayment obligations or financial consequences tied to separation from employment.
As enacted, the new California law makes it unlawful to include in an employment contract, or require a worker to sign as a condition of employment or a work relationship, a term that does any of three things upon the end of employment with a specific employer: requires payment of a debt, authorizes collection of a debt or the end of forbearance on a debt, or imposes a penalty, fee, or cost, unless the contract satisfies certain allowances of repayment under the law.
The statute defines “debt” broadly to include money, personal property, or their equivalent allegedly due for employment-related costs, education-related costs, or consumer financial products or services, whether certain or contingent and whether voluntarily incurred.
It likewise defines “penalty, fee, or cost” broadly, expressly identifying items such as replacement-hire fees, retraining fees, quit fees, immigration- or visa-related reimbursement, liquidated damages, lost goodwill, and lost profits.
At the same time, AB 692 is not a...
By Olivia GomesMay 18, 20260 comments WASHINGTON — A new analysis published by The Atlantic argues that election denial movements once viewed as politically fringe are becoming increasingly embedd...