Image by LuckyLife11 from Pixabay 

January 1, 2026 - Sacramento – The Labor & Workforce Development Agency (LWDA) highlights some key laws that will take effect on January 1, 2026, and encourages workers, employers, and community organizations to prepare for the new changes. The new laws reinforce California’s continued commitment to building a resilient and thriving economy for all.

“With these new laws, California is raising its standards and creating a more fair and equitable environment for its workforce,” said California Labor Secretary Stewart Knox. “By enhancing workers’ rights, strengthening accountability, and expanding pay standards, we’re building a better future for hardworking Californians.”

Key laws taking effect January 1, 2026

More money in the pockets of Californians

Raising wages and expanding the state’s pay protections.

• The state’s minimum wageopens in a new window will increase to $16.90 per hour, ensuring that wages better reflect the rising cost of living and help lift workers toward greater financial stability.
• Service workers’ right to keep 100% of their tipsopens in a new window is further protected by providing the Labor Commissioner the authority, through their existing citation process, to investigate and impose citations and fines against employers who unlawfully withhold gratuities (SB 648).

Empowering workers with new protections

More rights for workers to take leave, unionize, and move between jobs.

• For the first time, rideshare drivers will have the right to sectoral collective bargainingopens in a new window, allowing drivers to unionize and collectively bargain for improved working conditions, including benefits and pay (AB 1340).
• New restrictions on employment contract terms prohibit many forms of “stay-or-pay” agreementsopens in a new window that indebt working Californians to their employers by requiring employees to repay expenses, such as relocation costs and training, if the employee leaves their employment before a specified time (AB 692).
• LWDA’s California Workplace Outreach Programopens in a new window expands to build on existing education and outreach services to workers in industries that are vulnerable to labor violations to help workers understand and assert their workplace rights (SB 578).

Enhancing fair and responsible workplace practices

New rules close loopholes for workers compensation fraud and provide stronger tools for workers to recover earned wages and deter wage theft.

• Enhanced enforcement authority helps workers recover lost wages by increasing employer accountability for unpaid wage judgmentsopens in a new window with new penalties, up to three times the amount of wages owed, if not paid within 180 days (SB 261).
• A 1976 statute is modernized to give the Labor Commissioner a more efficient enforcement mechanism to help farmworkers recover unpaid wagesopens in a new window (SB 846).
• Measures to prevent employer fraud make it easier for the state to collect from unscrupulous employers who fail to protect injured workersopens in a new window by not providing workers compensation coverage – ensuring all workers receive the benefits to which they are entitled (SB 847).

About LWDA

The mission of the LWDA is to ensure safe and fair workplaces, deliver critical worker benefits, and promote good jobs for all. LWDA oversees seven major departments, boards and panels that serve California workers and employers, including the Agricultural Labor Relations Board, Department of Industrial Relations, Employment Development Department, Employment Training Panel, Public Employment Relations Board, Unemployment Insurance Appeals Board, and Workforce Development Board. Visit the LWDA website to learn more about the agency and its purpose.

Source: LWDA