On June 30th, California’s Governor signed Assembly Bill (AB) 2155, which concerns the enforceability of written arbitration agreements in California. The bill amends Code of Civil Procedure Section 1281 and provides that any agreement unenforceable under the Federal Arbitration Act (FAA) is also unenforceable under the California Arbitration Act (CAA).

AB 2155 takes effect January 1, 2027.

The legislation underscores the importance of regularly reviewing arbitration agreements to ensure they reflect current federal and state requirements.

If you have questions about AB 2155 or related issues, contact a Jackson Lewis attorney to discuss.

In the latest chapter in a decade-long saga to determine if interstate drivers are subject to California’s meal and rest break rules, the Ninth Circuit affirmed that drivers of passenger-carrying commercial motor vehicles are not subject to the state’s break regulations. In People of the State of California ex rel. Xavier Becerra v. Federal Motor Carrier Safety Administration, the court affirmed a decision of the Federal Motor Carrier Safety Administration’s (FMCSA) holding that California meal and rest break rules are preempted.

In practical terms, the court confirmed that California’s meal and rest period requirements, as found in Wage Order 9-2001, do not apply where FMCSA has found them displaced by federal safety regulations.  The opinion relies heavily on the Ninth Circuit’s ruling in International Brotherhood of Teamsters, Local 2785 v. Federal Motor Carrier Safety Administration, which upheld similar preemption for property-carrying commercial motor vehicles.

California argued that FMCSA lacked authority in the passenger-carrier context because the applicable federal regulations do not impose the same mid-shift break rule found elsewhere in the federal scheme. The court rejected that argument, reasoning that the federal rules still regulate duty limits and off-duty periods in the same safety area. The court also held that FMCSA reasonably found California’s rules imposed an “unreasonable burden on interstate commerce,” citing the administrative record regarding scheduling disruptions, reduced operational flexibility, increased driver costs, and the difficulty of complying with varying state break requirements.

For California employers in the transportation industry, the decision is an important confirmation that California’s unique wage and hour laws may not apply to all drivers.  As the Ninth Circuit’s opinion was limited to the facts before it, employers should scrutinize whether their drivers and vehicles are subject to the federal Motor Carrier Safety Act and the Hours of Service regulations before assuming state law does not apply. 

Jackson Lewis monitors judicial and administrative decisions affecting employers in California. If you have any questions about this decision or related issues, please contact a Jackson Lewis attorney for assistance.

At the start of the year, the state minimum wage increased, along with several local jurisdictions. Many other California cities and counties will also increase their minimum wage on July 1.

The following localities will raise their minimum wage on July 1, 2026:

LocalityCurrent Minimum WageNew
Minimum Wage
Alameda$17.46$17.76
Berkeley$19.18$19.61
Emeryville$19.90$20.34
Fremont$17.75$18.05
City of Los Angeles$17.87$18.42
County of Los Angeles (unincorporated areas only)$17.81$18.47
Malibu$17.27$17.91
Milpitas$18.20$18.50
Pasadena$18.04$18.57
San Francisco$19.18$19.61
Santa Monica$17.81$18.47

While the current minimum wage in California is currently $16.90, certain industries in the state of California, such as fast food and healthcare, are subject to higher minimum wage thresholds than the state’s minimum wage. Fast food workers currently earn a minimum of $20 per hour, and covered healthcare facility workers have state-mandated minimum wages ranging between $18.00 and $24.00 per hour, depending on the facility type. Several cities also have a higher minimum wage for hotel workers. For example, in the City of Los Angeles, the minimum wage for hotel workers beginning on July 1, 2026, is $25.00 per hour, or $29.25 per hour if health benefits are not provided.

The healthcare worker’s minimum wage is based on a tiered system, which is higher than the state’s minimum wage, and which is set to increase on July 1, 2026.

Employers must continue to monitor the minimum wages at the industry, local, and state levels.   

If you have questions about minimum wage compliance or related issues, please reach out to a Jackson Lewis attorney to discuss.

California employers in the health care industry should prepare for increased scrutiny of executive compensation as a new statewide initiative heads toward the November 3, 2026, General Election ballot.

The California Secretary of State announced that Initiative 1985, formally titled “Limits Compensation for Health Care Executives, Managers, and Administrators. Initiative Statute,” became eligible for the ballot on May 12, 2026.

The measure, known as the Health Care Executive Compensation Act of 2026, would prohibit certain hospitals and medical entities from paying executives, managers, and administrators more than $450,000 in total annual compensation or severance payments. The cap would increase annually by the lesser of 3.5 percent or the applicable Consumer Price Index adjustment. The initiative text defines “total annual compensation” broadly to include salary, wages, paid time off, bonuses, incentive payments, lump-sum cash payments, stock options or awards, housing, transportation, travel, meals, entertainment, social club memberships, severance, insurance payments, and other benefits, subject to limited exclusions.

For health care employers, the measure’s scope is significant. It would apply to covered hospitals and medical entities, including general acute care hospitals, acute psychiatric hospitals, parts of integrated health care delivery systems, and physician groups. It would also reach both nonprofit and for-profit entities, including foreign corporations operating covered facilities in California. The initiative excludes certain facilities, including those operated or licensed by the U.S. Department of Veterans Affairs and public hospitals as defined in the measure, although health care district hospitals are treated separately and may be covered.

The proposal is not limited to employees. It would apply regardless of whether the individual exercising executive, managerial, or administrative authority is or was employed by the covered entity, including where the person provides services under a contract or subcontract. This provision may affect management services agreements, consulting arrangements, interim executive placements, and affiliated-entity staffing structures.

The measure also provides that the cap would not apply to medical or health care professionals whose primary duties involve medical services, research, direct patient care, or other nonmanagerial, nonexecutive, and nonadministrative services.

If approved, the compensation limits would become operative January 1 of the calendar year following the election. The measure also states that it would apply notwithstanding contracts entered before the effective date and that any scheme or artifice designed to avoid the limits would constitute a violation. Employers may wish to review existing executive agreements, deferred compensation arrangements, severance provisions, incentive compensation plans, retention bonuses, and benefit programs well before the election.

The initiative would also impose annual reporting obligations. Covered entities would have to report to the Attorney General information about individuals receiving compensation or severance exceeding the limit, including detailed breakdowns of wage and non-wage compensation. For nonprofit entities, board approval of the annual report would be required before submission, and the report would need to be attested to under penalty of perjury.

Jackson Lewis will continue to monitor this ballot measure. If you have questions about the ballot measure or related issues, contact a Jackson Lewis attorney to discuss.

California Governor Gavin Newsom has issued Executive Order N-6-26, a “first-in-the-nation” order aimed at preparing workers, businesses, and communities for potential workforce disruption associated with artificial intelligence. While the order does not create immediate new compliance obligations for employers, it is an important development for California businesses because it previews where state policy, regulation, and enforcement attention may be headed.

The order directs state agencies to study AI’s impact on California’s labor market, identify early warning signs of workforce disruption, and develop policy recommendations addressing worker displacement, training, and economic transition. The Governor’s announcement emphasizes that California intends to prepare for AI-driven disruption while also helping workers and small businesses benefit from AI-related productivity gains.

One of the most significant provisions for employers is the directive that, within 180 days,  the Labor and Workforce Development Agency (LWDA) review and recommend updates to the California Worker Adjustment and Retraining Notification Act (Cal-WARN). The stated goal is to ensure Cal-WARN can provide early warning data and remain responsive to emerging industry trends. Although the order does not amend Cal-WARN, employers contemplating reductions in force, closures, restructurings, or job redesign related to AI or automation should monitor this process closely. Notably, a bill is already pending in the California legislature that would require notice similar to Cal-WARN for employees displaced from their jobs by AI.

The order also reflects the state’s interest in how employers use AI in hiring and workforce decisions. The Employment Development Department (EDD) is directed to incorporate business feedback about the role of technology adoption in hiring and workforce decisions into state labor market reporting. EDD must also launch a dashboard that shows AI’s impact on employment across sectors, using Unemployment Insurance data. These efforts may increase public and regulatory visibility into industries where AI adoption coincides with layoffs, reduced hiring, or occupational displacement.

At a practical level, California employers should consider taking inventory of workplace AI tools, documenting the business reasons for their use, assessing potential disparate impact, and maintaining appropriate human oversight. Employers planning workforce changes tied to automation should also evaluate WARN obligations, employee communications, retraining options, and potential impacts on protected groups.

Executive Order N-6-26 is best understood as a policy roadmap rather than an immediate mandate. Employers that proactively assess their AI practices now will be better positioned as California’s regulatory framework continues to develop.

If you have questions about this executive order or related issues, contact a Jackson Lewis attorney to discuss.

The Los Angeles City Council has approved amendments that would slow the implementation schedule for the City’s Hotel Worker Minimum Wage Ordinance and related airport worker wage provisions. The move revises the framework adopted in 2025, which had been set to increase covered hotel and airport worker wages to $30 per hour by 2028. The Council approved the delay on May 26, 2026, as proponents of a business-tax repeal ballot measure withdrew that initiative. The amendments to the ordinance take effect June 29, 2026.

The amendment revises the phased minimum wage as follows:

Implementation DateRate
July 1, 2026$25.00
July 1, 2027$25.50
July 1, 2028$28.50
July 1, 2029$29.00
January 1, 2030$30.00
July 1, 2030, and annually afterAdjusted per CPI-W

The amendments also revise health benefit obligations. For hotel employers, the ordinance provides for a health benefit payment of $4.25 per hour beginning July 1, 2026, increasing to $6.00 per hour beginning July 1, 2027. Beginning July 1, 2028, the hotel worker health benefit obligation would be tied to the health benefit payment applicable to airport workers.

Employers that do not provide the required health benefits must pay the equivalent amount as additional hourly wages.

For hotel employers, the practical effect is significant but more gradual than the prior schedule. Industry reporting describes the Council’s action as delaying the $30-per-hour threshold from 2028 to 2030, while still requiring a $25-per-hour minimum wage in July 2026 and incremental increases thereafter.

If you have questions about these amendments or related issues, contact a Jackson Lewis attorney to discuss.

As California heats up, employers should revisit Cal/OSHA’s heat illness prevention requirements, which continue to apply to both outdoor and indoor workplaces in 2026. Federal OSHA, by comparison, still has not finalized a nationwide heat-specific standard. Read more here: Beat the Heat: Reminders About California Heat Injury and Illness Mandates

California employers should take note that the Cal/OSHA workplace posting titled “Safety and Health Protection on the Job” was updated in April 2026. The poster summarizes key workplace safety and health obligations under California law and must be displayed in a conspicuous location where employee notices are customarily posted. Failure to display the notice may result in penalties.

The posting reminds employers of their obligation to provide safe and healthful workplaces, comply with applicable Cal/OSHA standards, and maintain a written and effective Injury and Illness Prevention Program (IIPP). It also emphasizes that employees and their authorized representatives must have access to the IIPP. Employers should confirm their IIPP is current, implemented, and supported by documentation, including records demonstrating that employees have been trained on hazards specific to their job assignments.

The poster also highlights several critical employer obligations. Employers must correct known hazardous conditions, must not allow employees to perform work that violates Cal/OSHA standards, and must not permit untrained employees to perform hazardous work. In addition, employers must report any work-related serious injury, serious illness, or fatality to the nearest Cal/OSHA district office immediately, but no later than eight hours.

Employers using hazardous substances should also review their hazard communication practices. The posting explains that covered employers must provide employees with information about hazardous chemicals, maintain access to safety data sheets, and ensure proper training on the safe use of those substances. Employees also have the right to access certain exposure and medical records.

As a practical next step, California employers should confirm that the updated poster is displayed in all required locations, including worksites where notices are typically posted. Employers may also want to use this update as a prompt to review their IIPP, safety training records, hazard communication program, reporting procedures, and internal processes for responding to Cal/OSHA inspections, citations, and employee safety complaints.

If you have questions about this posting requirement or related issues contact a Jackson Lewis attorney to discuss.

As summer approaches, California employers should remember that it’s time to review their workplace violence prevention plans and conduct their annual workplace violence prevention training.

As a reminder, Labor Code section 6401.9 requires employers to review the effectiveness of their workplace violence prevention plans at least annually, after a workplace violence incident, and whenever a deficiency becomes apparent. The law went into effect on July 1, 2024, so for many employers, the annual compliance deadline is right around the corner.

Employers must, at a minimum, review the violent incident log, the procedures for obtaining the active involvement of employees, and the effectiveness of the plan. To evaluate effectiveness, employers should confirm that the plan is still correct: the person responsible for the plan is correctly identified, reporting channels remain clear, emergency and incident response procedures still work in practice, and that investigation and communication procedures and requirements are clear and being followed. Employers should also review incident investigations from the prior year to see what, if anything, could be learned.

The law requires not only an annual review, but also annual training. Employers must conduct training on all the required topics in the law, including workplace violence hazards specific to the employees’ jobs, strategies to avoid physical harm, and how to report workplace violence to the employer or law enforcement.

On April 23, 2026, Cal/OSHA posted a revised draft for a workplace violence prevention regulation that would broaden the scope of the law to include additional employers and add definitions, plan requirements, post-incident procedures, recordkeeping, and training. Because the proposal is still in draft form, employers’ current compliance obligations remain grounded in Labor Code section 6401.9.

Employers that have not yet calendared annual workplace violence prevention plan review and retraining dates may want to do so now, especially if their original rollout occurred in spring or early summer 2024. A short refresher now may help avoid larger compliance issues later.

California’s Assembly Bill (AB) 692 took effect on January 1, 2026, impacting repayment and “stay-or-pay” agreements.  For a summary of the limitations and requirements stemming from this law, please see our earlier blog post.  California employers should already be evaluating offer letters, bonus agreements, training repayment provisions, tuition arrangements, and other documents that impose repayment obligations or financial consequences tied to separation from employment.

As enacted, the new California law makes it unlawful to include in an employment contract, or require a worker to sign as a condition of employment or a work relationship, a term that does any of three things upon the end of employment with a specific employer: requires payment of a debt, authorizes collection of a debt or the end of forbearance on a debt, or imposes a penalty, fee, or cost, unless the contract satisfies certain allowances of repayment under the law.

The statute defines “debt” broadly to include money, personal property, or their equivalent allegedly due for employment-related costs, education-related costs, or consumer financial products or services, whether certain or contingent and whether voluntarily incurred.

It likewise defines “penalty, fee, or cost” broadly, expressly identifying items such as replacement-hire fees, retraining fees, quit fees, immigration- or visa-related reimbursement, liquidated damages, lost goodwill, and lost profits.

At the same time, AB 692 is not a blanket prohibition on every repayment-related arrangement. The statute contains several express exceptions, including for agreements under government loan repayment or loan forgiveness programs; certain tuition repayment arrangements for a transferable credential if statutory conditions are met; agreements related to approved apprenticeship programs; certain separate agreements covering discretionary or unearned monetary payments at the outset of employment if the statutory requirements are satisfied; and contracts related to residential property financing or purchase. Whether an existing form fits within one of these exceptions will require a careful, provision-by-provision review.

California’s Law Is Part of a National Trend

California’s AB 692 is part of a multi-jurisdictional broader trend. New York enacted the “Trapped at Work Act” in late 2025 to prohibit certain “employment promissory notes” and similar provisions, and Washington recently amended its noncompetition statute in a way that also bears on repayment arrangements by carving out only a narrow category of written agreements to repay out-of-pocket educational expenses. Although these laws are not identical, together they underscore growing legislative attention to contract provisions that may discourage employees from leaving employment.

Takeaway

Employers should review their employment agreements, offer letters, sign-on bonus documentation, retention arrangements, training repayment agreements, tuition and credential programs, relocation repayment terms, and immigration-cost provisions.