New California employment laws you need to know in 2026

December 4, 2025

By KAREN VELIE

Laws impacting tips, paid family leave and non-binary genders are some of the more than one dozen laws set to impact Californians employers and employees in 2026. These are also laws to increase employer reporting requirements and exemptions for contractors to operate independently, instead of as employees.

Improved protections for employees receiving tips

Employees can now ask the California Labor Commissioner to investigate complaints about tips. Employers need to abide by rules, such as laws against taking employee tips, or running unfair tip pools or face possible investigations.

California equal pay laws to include non-binary genders

While California’s Equal Pay Law prohibits employers from paying employees lower wages based on their sex, the new law changes the wording to another sex to include non-binary genders.

Expanded relationships that qualify for paid family leave

Current paid family leave laws provide up to eight weeks of partial wage replacement to eligible workers for reasons such as bonding with a new child or caring for a seriously ill family member.

Under the new 2026 law, which begins on July 1, 2028, a “designated person” will be defined as “anyone related by blood or whose association with the individual is the equivalent of a family relationship.”

More exemptions regarding California’s independent contractor law 

California controversial labor laws prohibit many contractors from operating independently, instead classifying them as employees.

AB 1514 extends the exemptions for manicurists and commercial fisherman from the employee versus independent contractor worker rules until Jan. 1, 2029 and Jan. 1, 2031, respectively.

Employers need to expand their reports on pay data

Employers with 100 or more employees are currently required to submit payroll data reports to the Civil Rights Department on an yearly basis.

In 2026, the state will require employers to store their demographic pay data separately from employee personnel records. In addition, employers need to provide reports on employee demographics, such as race, ethnicity, and sex.