On Halloween, it's not ghosts or witches that are concerning employers operating in California, but rather California's AB 692, which goes into effect January 1, 2026.
Seyfarth Synopsis: As swashbuckling trick or treaters are donning their swords, and fearing getting trapped in a Halloween haunted house or corn maze, employers operating in California are navigating the mental maze of deciphering a path to compliance with AB 692. Read on for our summary of the tricks and treats (exceptions) to this new "stay-or-pay" prohibition law, which goes into effect January 1, 2026.
On Halloween, it's not ghosts or witches that are concerning employers operating in California, but rather California's AB 692, which goes into effect January 1, 2026. This is one of many legislative efforts nationwide purporting to protect employees from employers "trapping" (TRAP an acronym for Training Repayment Assistance Programs) them into continued employment by paying for training programs in exchange for the employee remaining employed for a certain period of time. Like the trick or treaters who can convince their parents to visit a few more houses on a Halloween night graced with our California weather, the Golden State's new law goes far beyond other states' efforts. Subject to narrow carveouts for certain "stay-or-pay" agreements, it will void contracts that require employees, upon separation of employment, to pay the employer for benefits the employee received during employment, such as...
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