California residents will see a wave of new laws take effect in 2026 that impact everything from grocery shopping to schools, housing and wages.
These laws reflect California’s broader policy priorities, including environmental protection, student wellbeing, housing standards and worker protections.
As each takes effect in 2026, residents and businesses are urged to review the specifics to ensure compliance and understand how their daily lives might be affected.
Here’s a look at some major changes you should know about before the new year.
AB 692 – Employment Contract Repayment Prohibition
AB 692 will apply to employment contracts entered into on or after January 1, 2026, and will apply to all employers in California. Under the new law, it will be unlawful to include terms in employment contracts that require workers to pay employers penalties or fees, or repay costs incurred by the employer on the employee’s behalf, if the employment relationship ends. Some contracts for repayment are still permitted under the law such as tuition repayment, bonuses, apprenticeship programs, or contracts related to the lease, financing, or purchase of residential property. Many of the exceptions are narrow and must be read carefully. Not complying with AB 692 can expose employers to liability, including minimum damages of $5,000 per affected worker, injunctive relief, and attorneys’ fees and costs associated with the worker having to bring a lawsuit. Employers should audit all existing employment, incentive, and training agreement templates to identify and remove any provisions that may violate AB 692.
SB 294 – Workplace “Know Your Rights” Act
Beginning February 1, 2026, employers must provide a written notice outlining employee rights related to:
- Workers’ compensation benefits
- Immigration agency inspections
- Protection from unfair immigration practices
- Constitutional rights when interacting with law enforcement
The Labor Commissioner will provide on its website a template notice by January 1, 2026. Employers must distribute it annually by February 1, 2026 and to a new employee upon hire. The notice must be provided in a manner the employer normally uses to communicate employment-related information. The bill also requires (if the employee requests) that the employer notify the employee’s designated emergency contact if the employee is arrested or detained on their worksite.
Records Requirement Law
Personnel Files to Include Training or Education Records. Effective January 1, 2026, under Senate Bill (SB) 513, personnel files now include training and education records (not just records employer maintains relating to the employee’s performance or to any grievance concerning the employee).
Each training record must contain:
- Employee name
- Training provider name
- Duration/date of the training
- Core competencies of the training, including skills in equipment or software
- Resulting certificates or qualifications.
Plastic Grocery Bag Ban
In 2026, plastic grocery bags will be phased out in California grocery stores as part of a renewed push to curb environmental waste.
California first banned plastic grocery bags in 2014, but the law carved out an exception for thicker bags meant to be reused up to 125 times — a provision pushed for by plastic and grocery lobbyists.
In September Gov. Gavin Newsom signed SB 1053, which lawmakers hope will finally close that loophole. The law replaces the original plastic bag ban, SB 270, and will only allow stores to distribute recycled carryout paper bags to
customers for a minimum charge of 10 cents per bag.
Starting Jan. 1, most businesses will no longer be allowed to provide single-use plastic bags, and customers may see changes in how recyclable and reusable bags are offered at checkout. The law aims to reduce plastic waste and boost recycling efforts.
Schools Must Limit Cellphone Use
Under a new education law, California schools will be required to limit or ban the use of cellphones during instructional time.
The goal is to reduce classroom distractions and improve student focus and academic performance. Districts will have flexibility in how they enforce the policy, but statewide standards push schools toward stricter limits than many currently have in place.
California schools have had nearly two years to develop a policy to restrict or prohibit the use of smartphones in classrooms.
The Phone-Free School Act required every school district, county office of education and charter school in the nation’s most populous state to develop a policy by July 1, 2026. Institutions will be required to update these policies every five years.
ICE Restricted At Schools
A new state law, Assembly Bill 49, prohibits school officials from allowing officers or agents of immigration enforcement agencies to enter nonpublic areas of a school without a valid judicial warrant, subpoena or court order.
School staff must, to the extent possible, ask for identification before granting access and may not disclose education records or information about students or their families without written consent or legal mandate.
The law also requires updated district policies to align with these protections by March 1, 2026.
“Our places of learning and healing must never be turned into the hunting grounds this federal administration has tried to make them out to be,” First Partner Jennifer Siebel Newsom wrote in a statement. “I have sat with mothers who are afraid to send their children to school, and with farmworker families who live every day with the fear of being torn apart. No family should ever have to carry that weight.”
Landlords Must Provide Appliances
Beginning Jan. 1, California landlords must include a working stove and refrigerator as part of the minimum habitability standards for most rental units. The new requirement, part of Assembly Bill 628, adds these kitchen appliances to the list of features that make a home legally “tenantable.”
Landlords must also repair or replace appliances subject to recall within 30 days of notification.
Tenants and landlords may agree in writing that the tenant will provide a refrigerator, but landlords cannot make tenancy contingent on that arrangement. Certain housing types, including permanent supportive housing, are exempt.
The bill was authored by Assemblymember Tina McKinnor (D-Inglewood). “A working stove and a working refrigerator are not luxuries — they are a necessary part of modern life,” said McKinnor previously. “By making these necessary appliances standard in rental homes, California can provide all of its residents with a safer, more affordable and more dignified place to call home”.
Minimum Wage Increases
California’s statewide minimum wage will increase to $16.90 per hour on Jan. 1, up from $16.50 in 2025.
The increase applies to most workers, and employers must ensure that exempt salaried employees earn at least twice the state minimum wage — at least $70,304 annually for full-time workers — to maintain exemption status.
Employers are also reminded to post updated wage orders where employees can see them.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
