While the world watched the Great Gatsby-esque party at Mar-a-Lago this past weekend, tens of millions of barely-surviving Americans awaited the fate of their November SNAP benefits, which lapsed on November 1 due to the government shutdown. But there is a $5 billion emergency fund for SNAP benefits. President Donald Trump, however, said last week…
This article continues our Friday’s Five series highlighting the major new California employment laws taking effect in 2026. In recent weeks, we’ve covered several significant bills impacting employers — from expanded employee rights and new recordkeeping requirements to pay transparency updates and workplace enforcement changes.
This week, we turn to Assembly Bill 692 (Kalra) — California’s latest move to strengthen worker mobility and curb restrictive employment practices. Effective January 1, 2026, AB 692 targets so-called “stay-or-pay” or training repayment agreement provisions (TRAPs) — a growing trend among employers seeking to discourage workers from leaving early by requiring repayment of training or relocation costs.California’s legislature continues its trend of expanding employee mobility protections. With AB 692, effective January 1, 2026, employers can no longer rely on “stay-or-pay” or training repayment agreement provisions (TRAPs) to discourage employees from leaving their jobs early.
Here are five key takeaways for employers:
1. AB 692 Closes the Loophole Around Non-Compete Alternatives
While California has long banned non-compete agreements under Business & Professions Code section 16600, some employers turned to “stay-or-pay” agreements — clauses requiring employees to repay training or relocation costs if they leave before a certain time. These TRAPs operated in a legal gray area, sometimes enforced, sometimes struck down as unconscionable. AB 692 eliminates that uncertainty by expressly prohibiting them altogether
2. New Code Sections Make Repayment Clauses Unlawful
The bill adds Business & Professions Code section 16608 and Labor Code section 926, making it illegal for an employer to require repayment of training expenses, relocation costs, or other hiring-related fees if an employee quits or is terminated. This prohibition applies broadly — even if the agreement was signed voluntarily
3. Limited Exceptions Exist
AB 692 allows only narrow exceptions:
For example, the transferable-credential tuition programs exemption is likely one that most employers could utilize — but only if every one of the following five conditions is met:
4. Severe Penalties for Violations
Employers that violate AB 692 can face statutory damages of at least $5,000 per employee, plus attorney’s fees, costs, and injunctive relief. In short — a single improper agreement could become a costly class or PAGA-style lawsuit
5. Action Steps for Employers
Bottom line:
AB 692 is another reminder that California strongly protects employee freedom to change jobs. Employers should remove any “stay-or-pay” provisions from their onboarding materials and agreements before January 1, 2026.
The post What Employers Need to Know About California’s New Ban on “Stay-or-Pay” Agreements — AB 692 appeared first on California Employment Law Report.
Over 15 million workers rely on SNAP. That sentence should be chilling enough on its own. But more distressing is that the average recipient only receives $6 per day from SNAP. The maximum is a little over $9 a day, or $282 month. The more people in a household, the lower the benefit amount per…
What is going on with the Department of Labor’s social media? The images in the DOL’s social media posts, shown below, present an extremely idealized white version of America, ignoring the fact that 43% of the country is not white. Many have likened the images to 1930s-1940s German propaganda. The reality is that America’s workers…
The most obscene of obscene pay proposals has brought unions and Democratic officials together to launch a campaign urging investors to vote it down. Reuters reports: “Tesla critics hope to block the stratospheric compensation proposed for CEO Elon Musk but face an uphill fight. Investors in the electric vehicle maker will decide on November 6 whether…
The World Series is a great time to sit back, grab a few snacks and drinks, and cheer on your favorite union MLB team. Use our exclusive list below of union-made products and support good union jobs with your wallet! Happy watching from all of us at Labor 411
The following was reprinted from AFSCME’s blog. Following a wave of successful organizing drives among cultural institutions in Los Angeles County, workers at the Los Angeles County Museum of Art (LACMA) announced that they are forming a union, LACMA United, through AFSCME District Council 36. The new union would represent over 300 workers and include curators,…
When I was recently asked to answer a reporter’s questions about pay equity, I jumped at the chance because I remembered an issue from my first full-time job that still irks me today. Thankfully the law in the US and especially in California has evolved on this issue quite a bit. Today an employee can go to Human Resources and ask about pay issues and has legally protected rights associated with those inquiries.
Also Human Resources should be trained on how to answer such questions honestly so the employee knows why they are being paid less. In my experience there almost always is a legitimate business reason, such as experience, education, seniority, location, or particularized skill set. The employee is entitled to know.
Read the full Newsweek article with my quotes here.
The pressure was turned up today on lawmakers as the largest federal workers union demanded an end to the government shutdown. NBC News reports: “The country’s largest union representing federal workers is calling for lawmakers to pass a short-term spending measure to immediately end the government shutdown, urging Democrats to abandon their current position and…
It’s time to update those handbooks for 2026 and while there are numerous new laws California employers must comply with, not all of them are, what I call, “handbook worthy.” Here are three changes I’m making to this year’s handbooks to stay compliant and ensure policies are clear for all employees.
First, under the new Civil Rights Department regulations that took effect October 1, 2025, it’s prohibited for employers to use automated-decision systems (ADS) such as AI tools in hiring, promotion or other employment-related decisions if those systems discriminate against applicants or employees based on protected characteristics under the Fair Employment and Housing Act (FEHA). Employers must retain ADS-related data (including screening data, outcomes, vendor reports) for at least four years and vendors of such tools may be treated as “agents” of the employer, making the employer liable. Because of this, our handbooks’ non-discrimination/EEO policy will be expanded to say that any use of software, algorithm or automated tool in recruitment, promotions, performance or termination decisions must be carefully vetted to ensure no disparate impact; that employees may ask about use of such tools; and that the company will maintain appropriate documentation and oversight.
Second, AB 406 expands upon last year’s AB 2499 legislation reorganizing California’s crime victim time off and accommodations law. This law prohibits employers from retaliating against or terminating an employee who is a victim or a family member of a victim taking time off in order to attend judicial proceedings related to that crime. AB 406 creates a different definition of “victim” which includes being subjected to one of 14 different crimes. It also revises notice requirements under California’s jury duty law, requiring reasonable advance notice, unless the “advance notice is not feasible.”
Third, given the passage of SB 648, amending Labor Code section 351, which empowers the state labor commissioner to investigate and issue citations and fines for tip theft, we recommend ensuring all tip policies and pools are clear and in writing. Handbook policies should clarify that tips left by patrons (including credit-card tips) are the sole property of the employee, that the employer or its managers may not deduct credit-card processing fees or take any portion of the tips, and that tips paid via credit card must be paid to the employee no later than the next regular payday following the date the patron authorized the payment.
These updates are meant to keep handbook language aligned with California’s evolving employment-law landscape and reduce legal risk for the upcoming year.