2026 California Employment Law Updates

ByContent Manager
2026 California employment law updates for employers

B. SB 648 — Tips & Gratuities Enforcement

Strengthens enforcement under Labor Code §351.

Key provisions:

  • Tips are sole property of employees
  • No deductions for credit card fees
  • Credit card tips must be paid by next payday
  • Penalties:
    • $100 initial violation
    • $250 subsequent violations
  • Labor Commissioner may issue citations or file civil actions.

Suggested Action Plan:

  • Audit existing tip policies especially if you are in the hospitality, restaurant, and hair and nail business

C. Other Wage & Hour Laws

SB 261 – Enforcement of Labor Commissioner Awards

If a final judgment arising from nonpayment of wages for work performed in California remains unsatisfied after 180 days, a court may enforce the judgment and impose a civil penalty on the judgment debtor that is up to three times the outstanding judgment amount, plus interest, reasonable costs and attorney’s fees.

Suggested Action Plan:

  • Confirm you are paying employees for all time worked
  • Ensure you are paying out all unused accrued vacation at time of separation
  • Remember to pay out bonuses that were earned during the employee’s tenure

AB 751 — Rest Break Exemption for Petroleum/Refinery Workers

  • Extends “safety-sensitive” rest break exemption indefinitely
  • Missed rest break: 1 hour of pay at regular rate

AB 1514 — Extension of ABC Test Exemptions

  • Licensed manicurists → exemption extended to Jan 1, 2029
  • Commercial fishers → exempt until Jan 1, 2031
  • If exempt, apply the Borello test.
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