Updated Sept. 9, 2026, to include information about amendments affecting bonuses.

On Governor Newsom’s desk is a bill (AB 1697) that would amend California’s “anti-TRAP” law (AB 692), which restricts employers’ ability to enforce training and retention repayment provisions and other stay-or-pay provisions in employment agreements. The governor is expected to sign these amendments into law. The following summarizes the major changes these amendments would make.

The Delayed (*But Not Really) Effective Date

The most significant amendment is the postponement of the law's effective date by one year. However, the prior law, AB 692, already went into effect on January 1, 2026. Under the amended legislation, the restrictions on stay-or-pay provisions would apply only to covered agreements entered into on or after January 1, 2027. The legislature explained that the delay is intended to provide employers with a transition period to review and modify existing arrangements, account for collective bargaining obligations, and avoid disruption from immediate implementation.

Employers Already Invested in Compliance Efforts

Unlike many statutory delays, the amendment does not provide additional preparation time for employers that had not yet begun compliance efforts. By the time the legislature postponed the law's implementation to January 1, 2027, many employers had already devoted substantial resources to reviewing and revising stay-or-pay provisions in anticipation of the original...

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