Pay Equity Enforcement Act 

Effective Date: January 2026

What’s Changing: On Oct. 8, Gov. Gavin Newsom signed SB 642, the “Pay Equity Enforcement Act,” which strengthens the California Equal Pay Act: a law that prohibits employers from paying employees “at wage rates less than the rates paid to employees of the opposite sex or another race or ethnicity for substantially similar work.”

What This Means for HR:

• Update all job postings to include pay scale, which is a good faith estimate of the hourly or salary range reasonably expected to be paid upon hire, for employers with 15+ employees.
• Maintain records of each employee’s job title and wage rate history for duration of employment and three years after separation.
• Train recruiters and hiring managers: do not ask applicants about prior compensation or benefits or rely on salary history to determine whether or what to offer. You may ask about salary expectations.
• Create written pay scale documentation for all positions.
• Ensure third-party recruiters/posters are compliant.

Employer Pay Data Regulation

(Payne & Fears)

Effective Date: In phases beginning January 1, 2026 and January 1, 2027

What’s Changing: California’s existing pay data reporting requirements (for private employers with 100+ employees) are becoming significantly stricter through two phases of updates under the amended law:

1. Effective January 1, 2026 — Enforcement & Data Storage

   • Mandatory penalties: Courts must impose fines if the California Civil Rights Department (CRD) seeks enforcement.

• • • Penalties: up to $100 per employee for first violations and $200 per employee for repeat violations.
    • Example: An employer with 500 employees could face $50,000–$100,000 in fines for failing to file.

1. • Data storage rule: Employers must keep demographic data (race, ethnicity, sex) separate from personnel records.

2. Effective January 1, 2027 — Expanded Job Categories

• • Job categories will increase from 10 EEO-1 categories to 23 SOC-based categories.
  • This means new reporting granularity — for example, breaking out “Computer & Mathematical Occupations,” “Health Care Practitioners,” or “Chief Executives” instead of one broad “Professional” group.

What This Means for HR:

• Review and update your pay data reporting process.
• Strengthen your data infrastructure. Work with HRIS, payroll, or compensation vendors to map existing roles to the new 23 SOC job categories.
• Build a secure data storage protocol that keeps demographic data separate from personnel files (to comply with privacy and nondiscrimination rules).
• Audit pay equity and job classifications now.
  • Conduct an internal pay equity analysis to identify disparities before expanded reporting takes effect.
  • Review job titles and ensure they align with the correct SOC category definitions.
• Train HR and DEI staff. Train team members on SOC category definitions and how to classify employees correctly.

Personnel Record Requirements

(CDF Labor Law, LLC) 

Effective Date: January 1, 2026

What’s Changing: SB 513 clarifies that “personnel records relating to the employee’s performance” now also include education and training records. Employers that maintain such records must ensure they contain the following information:

• Employee’s name
• Name of trainer
• Date and duration of training
• Core competencies addressed (e.g., skills in equipment or software)
• Resulting certification or qualification

What This Means for HR:

• Employers should ensure that employees’ education and training records include the above-mentioned details and, upon an authorized request, produce those records within the 30-day statutory window.

Construction Trucking: Employees and Independent Contractors

(Bill CA SB809)

Effective Date: January 1, 2026

What’s Changing: California launched the Construction Trucking Employer Amnesty Program, effective through January 1, 2029, allowing eligible construction contractors to:

• Voluntarily reclassify truck drivers who were previously treated as independent contractors;
• Settle past misclassification issues by paying back wages, payroll taxes, and related costs;
• Avoid full civil and statutory penalties that would normally apply under California’s strict worker classification laws (such as AB 5 and Labor Code §226.8).

This program is intended to encourage employers in the construction and trucking sectors to come into compliance proactively, rather than wait for an audit or enforcement action.

What This Means for HR:

• Conduct an internal worker classification audit by reviewing all individuals providing trucking or hauling services under independent contractor agreements. Evaluate whether those relationships meet the ABC Test under California law. Identify drivers who may qualify for reclassification under the amnesty program.
• Coordinate with legal, payroll, and accounting to assess eligibility for the amnesty program and prepare necessary documentation.
• Calculate potential back wages, taxes, and benefits owed for reclassified drivers.
• Apply for the Amnesty Program before the deadline by submitting the settlement agreement request to the California Labor Commissioner’s Office before January 1, 2029.
• Update contracts and policies to align with employee status for reclassified drivers.
• Train managers and project leads. Communicate changes to affected workers and clearly explain to reclassified drivers what the change means for their pay, taxes, benefits, and protections.

City of San Diego’s Hospitality Minimum Wage Increase 

(JDSUPRA)

Effective Date:Increase July 1, 2026 with a steady increase until July 1, 2030

What’s Changing: The City Council has passed an ordinance establishing a new minimum wage schedule for employees at hotels, amusement parks, and event centers starting with an increase July 1, 2026 and a steady increase until July 1, 2030.

What This Means for HR:

• Adjust payroll systems for hotel employees, amusement parks, and event centers according to the table below: