2026 California Employment Law Updates
8. Transportation Network Company Drivers Labor Relations Act (AB 1340)
Creates collective-bargaining-style rights for gig drivers who are not classified as employees.
TNCs must submit quarterly driver data to PERB (starting Jan 6, 2026), including:
- Email, phone, driver’s license
- Residence address
- Join date
- Number of rides
PERB will then identify active drivers (those at or above the median number of rides).
Note: This unionization process is materially different from that under the NLRA. A TNC driver organization/union can begin the union organization process by making a showing to PERB that it has a mere 10% support among active drivers. (Usual process calls for obtaining signed authorization cards from at least 30% of employees to file for an election).
Why is this important? AB 288 and 1340 are landmark pieces of legislation aimed at significantly expanding and protecting unionization rights for workers in the state, particularly in the private sector and the gig economy. Meanwhile, unions are winning elections at a much higher rates (79.9% in 2024 vs 61% in 2022), particularly in higher education and healthcare.
Suggested Action Plan:
- Know your rights and responsibilities under the National Labor Relations Act (NLRA) to avoid illegal activities like threatening or firing union organizers.
- Ensure open communication with your employees so they feel heard, valued and seen
- Resolve employee concerns promptly and proactively
- Make sure your pay and benefits are competitive
- Assure employees are treated fairly and respectfully
- Train managers to be effective leaders and communicators, focusing on positive employee relations
- Ensure strong compliance with federal law
9. Arbitration Developments
A. Hohenshelt v. Superior Court (2025)
- Arbitration fees must be paid within 30 days; late payment does not automatically void arbitration.
- Relief from forfeiture permitted if the breach is excusable and there is no prejudice.
B. Velarde v. Monroe Operations (2025)
Arbitration agreement unenforceable due to:
- Procedural unconscionability (adhesion contract, insufficient review time, misrepresented terms)
- Substantive unconscionability (unfair procedural rules favoring employer)
A less severe level of procedural unconscionability could have saved the agreement.
10. One Big Beautiful Bill Act (OBBBA) (July 2025)
- H.R.1 aka the “One Big Beautiful Bill Act,” impacts a wide range of workplace matters, including immigration, benefits, and employment tax liabilities.
- The OBBBA includes new, non-waivable fees and stricter requirements that are expected to increase financial and administrative burdens for employers hiring non-citizen workers.
- Increases dependent care FSAs and employer-provided childcare credits, adds incentives for student loan and adoption assistance.
- OBBBA provides federal income tax deductions for a portion of an eligible worker’s tips and overtime earnings; deductions are temporary and expire after the 2028 tax year.