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Quick Look
- PERB will take action for employee rights when the NLRB does not.
- Leaves for crime victims and attending judicial proceedings are consolidated under the Civil Rights Division.
- Paid sick leave is formally amended to allow usage for jury duty, attend judicial proceedings, and address crime victim needs.
- Public works employers have 10 days to produce payroll records upon request, otherwise the DLSE may withhold penalties from the contract award.
- Stay-or-pay agreements are a prohibited restraint of trade, subject to limited exception.
- There will be statutorily mandated interagency cooperation for processing agricultural employee claims.
- The requirement to rehire displaced workers as a result of the COVID-19 pandemic has been extended another year through the end of 2026.
- There are changes to public works annualization of per diem wages to ensure proper calculation.
- The state Attorney General may bring a lawsuit against a contractor or deny a license application or renewal where the contractor has failed to properly pay its workers.
- The Division of Workers’ Compensation is required to develop templates for a medical evaluation request form and a qualified medical evaluator (QME) report form.
- Rideshare drivers will have the ability to organize while still being classified as independent contractors.
- Workers’ compensation parties must disclose a financial interest in an entity providing services.
- Manicurists and commercial fishers will continue to be exempt from using the “ABC” test to determine independent contractor status through 2029 and 2031, respectively.
- Large developers of artificial intelligence models must have whistleblower processes for their employees.
- Where an employer fails to pay a final judgment for unpaid wages within 180 days of the final judgment, they are subject to a civil penalty of up to three times the judgment amount plus attorneys’ fees and costs.
- By February 1, 2026, all employers must provide employees with a stand-alone written notice of rights. Employers must provide current employees the opportunity to name an emergency contact no later than March 30, 2026.
- Where an employee’s assessment, testing, admission, or acknowledgment of their own personal bias is made in good faith and solicited or required as part of a bias mitigation training does not constitute unlawful discrimination.
- Employers must retain collected demographic information separate from personnel files. Pay data reporting will change as of January 1, 2027 to include 13 more data points.
- There are clarifications on how the CRD manages received complaints under FEHA, including tolling deadlines.
- An employee’s right to review their personnel file related to their performance includes education and training records, which must identify specific information.
- Paid family leave benefits will be expanded to include caring for a designated person with a serious health condition.
- Contractor joint liability requirements and exceptions are clarified.
- A CalWARN notice of mass layoff, relocation, or termination must include new information.
- The pay transparency law amends the definition of “pay scale” to mean a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.
- The statute of limitations for violations of the equal pay law is extended to three years, regardless of whether a violation is considered willful. Other changes extend and clarify requirements.
- The Construction Trucking Employer Amnesty Program offers a settlement option to eliminate employer liability.
- Expense reimbursement requirements are identified for commercial drivers.
- The Division of Workers’ Compensation may obtain a lien on an uninsured employer’s real property transferred to hide the asset.
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Discussion
California’s legislative session has come to a close with the Governor signing a number of bills impacting employers and employees. As in previous years, the California Legislature has been active this season. Here is a summary of key updates employers should be aware of.
AB 288 | JAN 1, 2026 – PERB is California’s version of the NLRB. The Public Employment Relations Board (PERB), already existing to protect public employees, is expanded to protect all employees that otherwise would be protected by the terms of the National Labor Relations Act (NLRA), but are, by act or omission of the National Labor Relations Board (NLRB), not in fact protected. The bill seeks to ensure that all California workers maintain the freedom to engage in collective action, to organize, form, join, or assist labor organizations, and engage in collective bargaining. PERB will have similar authority to address collective bargaining and employee claims as exists for the NLRB.
There will be a phase in period for adjudicating unfair labor practice cases: the bill is effective January 1, 2026 for employers with 500 or more employees for refusal to bargain or acknowledge election certification or unilateral withdrawal of recognition of an employee representative by an employer of any size (Category 1 cases); July 1, 2026 for claims that an employer of any size refused to bargain, recognize, or give effect to an election certification (Category 1); January 1, 2027 for claims that an employer failed to bargain in good faith where engaged for bargaining for over six months without agreement (Category 2); January 1, 2027 for all other cases, which are organized within this category from priority 1 to 4 (Category 3). Priority of cases is designated in order of Category. Unfair practice violations may result in $1,000 civil penalties per worker per violation.
AB 406 | OCT 1, 2025 – Reinstates Protections Against Qualifying Acts of Violence for Violations Prior to December 31, 2024; Moves Leave to Attend Judicial Proceedings to the Government Code; Expands Paid Sick Leave. As of January 1, 2025, protections including leave for victims of qualifying acts of violence was moved from the Labor Code to the Government Code to provide the Civil Rights Division (CRD) authority over alleged violations. This bill reinstates the provisions existing under the Labor Code on or before December 31, 2024 to apply only to alleged actions or inactions occurring on or before that date. The previous protections are reinstated until 2035.
The bill also transfers enforcement authority for discrimination prohibitions relating to crime victims, including when the victims are employees’ family members, taking leave to attend judicial proceedings from the Division of Labor Standards Enforcement (DLSE) to the Civil Rights Department as of January 1, 2026, by transferring laws from the Labor Code to the Government Code. The current Labor Code sections will apply to violations occurring on or before December 31, 2025, and those laws will sunset as of 2035.
Finally, the paid sick leave law has been amended to specifically allow for leave to be taken (1) to attend judicial proceedings relating to crime victims as was stated in the Labor Code prior to 2025; (2) for purposes of jury duty, appearing as a witness in a judicial proceeding, and to obtain certain crime victim relief as of January 1, 2025; and (3) for crime victims to attend judicial proceedings as of January 1, 2026. These changes reflect reconciliation of provisions among the moving parts of these laws to be consistent across code sections and expand on what already existed.
AB 538 | JAN 1, 2026 – Public works access to payroll records. Contractors and subcontractors must currently maintain payroll records for employees on public works projects. When the request for records is made through the project-awarding public agency, and the agency does not have a certified copy of the records, this bill requires the agency to obtain the payroll records from the contractor. Once the contractor receives the request from the awarding agency, the contractor has 10 days to comply. If the contractor fails to comply, the DLSE is notified and may seek to withhold penalties from the contract award.
AB 692 | JAN 1, 2026 – “Stay-or-Pay” Agreements are a Restraint of Trade. This bill prohibits employers from entering into agreements that require payment of debts, debt collection or ending forbearance, or imposes any penalty, fee, or cost on a worker if their work relationship terminates. Provided that certain requirements are met, this restriction does not apply to tuition repayment costs for a transferable credential, enrollment in an approved apprenticeship program, or repayment of a hiring bonus that is not tied to specific job performance. These prohibitions apply to contracts entered into on or after January 1, 2026. Victims or worker representatives may bring civil lawsuits for violations of the law, which may result in a minimum of a $5,000 penalty per worker, plus injunctive relief and attorneys’ fees. The Governor encouraged further legislation in 2026 to preclude “stay-or-pay” agreements in collective bargaining.
AB 845 | [Upon Legislative Appropriation] – Agricultural Employee Claims. This bill requires any agency within the Labor and Workforce Development Agency to route complaints received from agricultural employees to the proper state agencies with jurisdiction over the complaints, and prohibits the transmitting entity from disclosing the identity and personal information of the complainant to the extent prohibited by law without their consent.
AB 858 | JAN 1, 2026 – Extension for Rehiring Displaced Workers. This bill extends Labor Code § 2810.8 through January 1, 2027. Previously expiring at the end of 2025, former employers in the hospitality and business service provider industries must offer re-employment to those who were laid off for qualifying reasons during the COVID-19 pandemic when positions are available for which they qualify, in addition to other notice and recordkeeping requirements.
AB 889 | JAN 1, 2026 – Changes to Public Works Annualization of Per Diem Wages. Employers use annualization to calculate fringe benefit credits that may be applied to prevailing rate wages on public work projects. This bill removes existing exceptions for employers to pay the general prevailing rate of per diem wages for public works projects and revokes annualization exemptions authorized before January 1, 2026. Employers are authorized to take full credit for the hourly amounts contributed to defined contribution pension plans that provide for both immediate participation and essentially immediate vesting even if the employer contributes at a lower rate or does not make contributions to private construction. The employer has the burden to prove that the credit for employer payments was calculated properly. Employers are required to produce records of employee hours and employer payments on private construction sufficient for the Labor Commissioner to verify that the credit for employer payments was properly calculated on an annualized basis; the Labor Commissioner may deny the employer credit for employment payments if the employer does not produce the requested records.
AB 1002 | JAN 1, 2026 – Contractor Penalties for Wage and Hour Violations. The state Attorney General may bring a lawsuit against a contractor or deny a license application or renewal where the contractor has failed to pay its workers the full amount of wages that the workers are entitled to under state law, has not fulfilled a wage judgment, or is in violation of an injunction or court order regarding the payment of wages to its workers. A good faith mistake regarding which wage rate applies to a particular category of work will not be considered a violation of the law.
AB 1293 | JAN 1, 2026 – Workers’ Compensation Qualified Medical Evaluators Report Form Template. This bill requires the Division of Workers’ Compensation to develop templates for a medical evaluation request form and a qualified medical evaluator (QME) report form. The Division is required to adopt regulations to implement this bill by January 1, 2027.
AB 1340 | JAN 1, 2026 – Transportation Network Company Drivers Labor Relations Act. This bill requires that transportation network company (TNC) drivers, providing prearranged passenger transportation services, have the right to form, join, and participate in the activities of TNC driver organizations, to bargain through representatives of their own choosing, to engage in concerted activities for the purpose of bargaining or other mutual aid or protection, and to refrain from such activities. This essentially gives rideshare drivers the ability to organize while still being classified as independent contractors. The PERB is required to enforce these rules.
AB 1398 | JAN 1, 2026 – Workers’ Compensation Disclosure Requirements. All interested parties in a workers’ compensation case must disclose to a third-party payer, or other entity to whom a claim for payment is presented for services furnished pursuant to a referral, a financial interest in an entity providing services. The disclosure must be made in writing, at the time the claim for payment is presented for services furnished pursuant to a referral.
AB 1514 | JAN 1, 2026 – Extended Independent Contractor “ABC” Exemption for Licensed Manicurists and Commercial Fishers. Under Labor Code § 2778, manicurists and commercial fishers are exempt from using the “ABC” test to determine independent contractor status. Those exemptions were set to sunset and now have been extended until 2029 and 2031, respectively.
SB 53 | JAN 1, 2026 – Transparency in Frontier Artificial Intelligence Act (TFAIA). Large developers of artificial intelligence models are required to follow specified standards when creating frontier models and to publish information about their models on their websites. For employers, it creates whistleblower protections for those working with foundation models and prohibits a frontier developer from preventing, or retaliating against, a covered employee from or for disclosing information to the Attorney General, a federal authority, the employee’s superior, or an employee who has authority to investigate, discover, or correct the reported issue, if the covered employee has reasonable cause to believe that the information discloses that the frontier developer’s activities pose a specific and substantial danger to the public health or safety resulting from a catastrophic risk or that the frontier developer has violated the TFAIA. It also requires frontier developers to have specified internal reporting procedures for this purpose. This bill preempts any similar local laws enacted on or after January 1, 2025.
SB 261 | JAN 1, 2026 – DLSE Enforcement of and Penalties for Wage Theft. Where an employer fails to pay a final judgment for unpaid wages within 180 days of the final judgment, they are subject to a civil penalty of up to three times the judgment amount. Penalties are distributed 50/50 between employees and the DLSE. The Labor Commissioner or public prosecutor must be awarded court costs and reasonable attorneys’ fees for successful judgment enforcement.
SB 294 | FEB 1, 2026 – Workplace Know Your Rights Act. By February 1, 2026, all employers must provide employees with a stand-alone written notice of rights to each current employee through personal service, email, or text message, or other method if it can reasonably be expected to be received by the employee within one business day of sending. The written notice must also be provided to each new employee upon hire and annually to existing employees. The Labor Commissioner is expected to provide a template notice by January 1, 2026. The notice must describe employee rights to workers’ compensation benefits, notice of inspection by immigration agencies, organize a union or engage in concerted activity, and when interacting with law enforcement at the workplace, as well as other information deemed necessary by the Labor Commissioner. Employers must keep records of compliance for three years, including the date that each written notice is provided or sent.
If an employee has notified their employer that they would like their designated emergency contact to be notified in the event they are arrested or detained, the employer must notify the designated emergency contact if the employee is arrested or detained on their worksite or if the employer is otherwise aware of arrest or detention away from the worksite during work hours. Employers must provide current employees the opportunity to name an emergency contact no later than March 30, 2026, and at the time of hire for new employees hired after March 30, 2026. The employer must also allow employees to provide updated emergency contact information through their duration of employment.
SB 303 | JAN 1, 2026 – Admissions During Bias Mitigation Training Do Not Trigger FEHA Protections. Where an employee’s assessment, testing, admission, or acknowledgment of their own personal bias is made in good faith and solicited or required as part of a bias mitigation training does not constitute unlawful discrimination under the Fair Employment and Housing Act (FEHA). This measure is enacted in part to encourage employers to conduct bias mitigation training.
SB 447 | JAN 1, 2026 – Workers’ Compensation Firefighter and Peace Officer Death Benefits Extended. When a local firefighter or peace officer dies as a result of an accident or injury caused by external violence or physical force while performing their duty, workers’ compensation rules require the employer to continue providing health benefits to the deceased employee’s minor dependents under the benefits extended to the surviving spouse, or if there is no surviving spouse, until the minor dependent reaches a certain age. This bill extends that age from 21 to 26 years old.
SB 464 | JAN 1, 2026 – Pay Data Reporting Update. Employers with 100 or more employees have been required to provide pay data reporting to the State. This bill amends those requirements. First, this bill requires employers to retain collected demographic information separate from personnel files. Second, it makes civil penalties mandatory, rather than optional, for failure to report, which are $100 per employee for a first violation and $200 per employee for subsequent violations. Finally, pay data reporting will change as of January 1, 2027 to include 13 more data points, for a total of 23 data points reported. Employers will need to start collecting the required data in 2026 to prepare for reporting in 2027.
SB 477 | JAN 1, 2026 – CRD Procedural Updates Under FEHA. There is a set process for how the CRD manages received complaints under FEHA. This bill makes some clarifications and expands the reasons for tolling certain timed procedures. The bill clarifies the definition of “group or class complaint” to mean any complaint alleging a pattern or practice. Where a group or class complaint would otherwise cover another complaint made, the department will issue a right-to-sue notice for that complaint on request or at the conclusion of the group or class complaint. Additionally, the time for a complainant to file a civil action under certain identified statutes is tolled until one year after the department issues either a written notice that it has closed its investigation without electing to file a civil action for the alleged violation, or written notice that the complaint has remained closed following an appeal to the department if a timely appeal is made to the original closure. The time for the CRD to bring certain claims against an employer or issue right-to-sue letters may be tolled during a dispute resolution proceeding (e.g., mediation), based on mutual written agreement by the parties, during the time the CRD’s investigation is extended due to a pending petition to compel, or during a timely appeal for closing the complaint.
SB 487 | JAN 1, 2026 – Workers’ Compensation Benefits and Obligations for Firefighters and Peace Officers. This bill says that an employer is entitled to receive no more than 1/3 of the third-party defendant’s liability insurance policy limit for an injured peace office or firefighter, if the employee establishes that their total damages exceed the net recovery after satisfaction of the employer’s claim and that the total liability insurance limits available are insufficient to fully compensate the employer and employee’s proven damages. The bill limits an employer’s right to reimbursement, subrogation, or lien to the maximum recovery threshold. Employers are prohibited from asserting any recovery by an injured employee as a credit or offset against future workers’ compensation benefits and must have a settlement or release to limit the employer’s claim for reimbursement to the portion of the settlement not allocated to the employee under this bill.
SB 513 | JAN 1, 2026 – Personnel Records Clarified. An employee’s right to review their personnel file related to their performance includes education and training records. Education and training records must include the name of the employee, the name of the training provider, the duration and date of the training, the core competencies of the training (including skills in equipment or software), and the resulting certification or qualification.
SB 590 | JUL 1, 2028 – Paid Family Leave to Care for Designated Persons. Paid family leave benefits will be expanded to include caring for a designated person with a serious health condition. “Designated person” means any care recipient related by blood or whose association with the individual is the equivalent of a family relationship. This is consistent with the definition of designated person under the California Family Rights Act (CFRA), which differs from the definition under the state paid sick leave law. Upon request to the EDD for wage replacement benefits for leave to care for a designated person, the employee must identify the designated person, and attest under penalty of perjury how that person is related by blood or is the equivalent of a family relationship.
SB 597 | JAN 1, 2026 – Contractor Joint Liability Clarified. Contractors are currently liable for wages of subcontractor employees. This bill limits the direct contractor’s liability to payments for labor required by the subcontractor’s agreement with the laborer or the subcontractor’s collective bargaining agreement. Additionally, liability of direct contractors will not be based on the employer’s misclassification of the craft of a worker. The statutory remedies are deemed to be cumulative of any other available remedies. Further, a direct contractor is not otherwise liable for fringe or other benefit contributions if it pays outstanding fringe and other benefit contributions owed to the worker through a joint check made payable to the subcontractor and the labor trust fund. The definition of “direct contractor” was revised to mean a contractor that has a direct contractual relationship with an owner or any other person or entity engaging contractors or subcontractors for the erection, construction, alteration, or repair of a building, structure, or other private work on behalf of the owner.
SB 617 | JAN 1, 2026 – CalWARN Notice Revision. A CalWARN notice of mass layoff, relocation, or termination must include (1) whether the employer plans to coordinate services, such as a rapid response orientation, through the local workforce development board, the employer plans to coordinate services through a different entity, or the employer does not plan to coordinate services with any entity; (2) the email and phone number of the local workforce development board and a scripted description of the board; (3) a description of the statewide food assistance program known as CalFresh, the CalFresh benefits helpline, and a link to the CalFresh internet website; and (4) a functioning email and telephone number of the employer for contact. When coordinating services with a local workforce development board, an employer must do so within 30 days from the date of the notice.
SB 642 | JAN 1, 2026 – Pay Transparency and Equal Pay Updates. Currently, employers must disclose the pay scale of a position in job postings and upon request. This bill revises “pay scale” to mean a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire. Additionally, the statute of limitations for violations of the equal pay law is extended to three years, regardless of whether a violation is considered willful. There is also a six-year lookback period for obtaining remedies. The bill states that a cause of action under the equal pay law arises when an alleged unlawful compensation decision or practice is adopted, an individual becomes subjected to an unlawful compensation decision or practice, or an individual is affected by application of an unlawful compensation decision or practice, including each time wages, benefits, or other compensation is paid. For purposes of equal pay, “sex” has the same definition as is used under FEHA and equal pay must be provided as compared to those of “another” sex rather than the current standard of the “opposite” sex; and “wages” and “wage rates” include all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.
SB 809 | JAN 1, 2026 – Misclassification of Construction Drivers; Vehicle Expenses. Currently, the Motor Carrier Employer Amnesty Program allows a motor carrier performing drayage services to be relieved of liability for statutory or civil penalties associated with the misclassification of commercial drivers as independent contractors if the motor carrier enters into a settlement agreement with the commissioner. This bill creates a similar program, known as the Construction Trucking Employer Amnesty Program, allowing an eligible construction contractor to be relieved of liability for certain statutory or civil penalties associated with the misclassification of construction drivers as independent contractors, if the eligible construction contractor executes a settlement agreement negotiated with, or approved by, the Labor Commissioner prior to January 1, 2029. Additionally, the Labor Code will state that mere ownership of a vehicle used by a person in providing labor or services for remuneration does not determine whether that person is an independent contractor; the statutory “ABC” test determines independent contractor status.
Currently, employees are required to be reimbursed for necessary expenditures incurred in the discharge of their duties. This bill expressly requires reimbursement for expenses related to use of a personal or commercial vehicle while performing their job duties. With respect to construction trucking, a commercial motor vehicle driver who owns the truck, tractor, trailer, or other commercial vehicle that they use in performing their job duties is entitled to reimbursement for the use, upkeep, and depreciation of that vehicle, regardless of whether the vehicle is owned by the driver as an individual or through a corporate entity. This addition to the Labor Code is “declarative of existing law.” The amount to be reimbursed for the use of the truck, tractor, or trailer must be negotiated either by the driver (or their representative) and the employer. The amount negotiated must be either a flat rate reimbursement or a per-mile reimbursement, but must at least be the actual amount expended by the driver for a flat rate reimbursement or the standard mileage reimbursement rate set by the IRS. This expense reimbursement may be paid directly to the driver in the driver’s name or to a corporate entity owned and controlled by the driver if the vehicle is owned by the corporate entity.
SB 847| JAN 1, 2026 – Workers’ Compensation Lien on Real Property. This bill allows the Division of Workers’ Compensation to obtain a lien on an uninsured employer’s real property transferred after an employee’s injury, where the transfer indicates that it was made as a gift with no transfer tax paid or was intended to hide the asset.
Action Items
- Have appropriate personnel trained on compliance with the National Labor Relations Act.
- Update leave policies for compliance.
- Have legal counsel review and update employee contracts in 2026.
- Maintain processes to rehire displaced workers as a result of the COVID-19 pandemic.
- Review public works annualization of per diem wages to ensure proper calculation.
- Conduct a wage and hour audit to confirm appropriate pay is provided to employees.
- Have legal counsel review independent contractor classifications for compliance.
- By February 1, 2026, provide employees with a stand-alone written notice of rights.
- By March 30, 20206, provide current employees the opportunity to name an emergency contact.
- Retain collected demographic information separate from personnel files.
- Prepare to expand pay data collection in 2026.
- Ensure education and training records identify required information.
- Update CalWARN notices with newly required information for 2026.
- Evaluate pay scale measurements for disclosure in compliance with pay transparency requirements.
- Have an equal pay audit conducted to evaluate compliance.
- Update expense reimbursement procedures for personal and commercial drivers.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
FTC Overhauls Enforcement and Oversight of Non-Compete Agreements
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Discussion
First Enforcement Action of the Joint Labor Task Force
In February 2025, the FTC’s Chairman directed the formation of a Joint Labor Task Force, with an aim of “rooting out and prosecuting deceptive, unfair, and anticompetitive labor-market practices that harm American workers.” Following formation of the Task Force, the FTC has taken its first enforcement action targeting a company that imposed non-competes on all new hires, regardless of role. As a result of the enforcement action, employers should note that blanket non-compete policies may trigger federal scrutiny. The resulting consent order requires the company to notify employees that non-competes are void and limits non-solicitation clauses to customers the employee directly served in the past 12 months.
New Legal Standard for Non-compete Evaluation
In a separate statement, issued on September 4, 2025, the FTC announced that they will use a fact-specific approach similar to the common-law “rule of reason,” when evaluating whether a non-compete is narrowly tailored to protect legitimate business interests (with limited exceptions). Among the factors relevant to the FTC’s finding of unlawfulness here included:
FTC Drops Biden-Era Non-compete Ban
Employers will recall that the Biden-era FTC proposes a near complete ban on non-compete agreements in April 2024. This proposed rule has been subject to significant ongoing litigation and the FTC was required to update the appellate court on their intentions to continue to defend the ban by September 8. Just before their deadline, the FTC announced that they will stop pursuing the action and filed paperwork to dismiss their legal actions. Rather than defending the rule, the FTC has indicated that they will address non-compete agreements “through enforcement actions against companies that misuse them in violation of the law.”
Information Requested from the Public on Use of Non-compete Agreements
On September 4, 2025, the FTC published a public request for information (RFI) asking the public to provide information on the use and enforcement of employee non-compete agreements. Employers are encouraged to participate in the FTC’s public inquiry, especially if they’ve experienced hiring challenges due to competitors’ non-compete practices. This is an opportunity to influence future enforcement and policy direction.
The public has 60 days to respond to the FTC’s RFI, which asks a number of questions, including which employers are using non-compete agreements, what are the terms of those agreements, and how are they being enforced. The FTC also offers a confidential submission option to protect the confidentiality of many of these types of agreements.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Department of Labor Issues Opinion Letters on Several Wage and Hour Issues
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September 30, 2025
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Discussion
On September 30, the Department of Labor’s Wage and Hour Division (WHD) issued several opinion letters clarifying several issues under the Fair Labor Standards Act (FLSA). The issuance of the opinion letters was the result of the Deputy Secretary of Labor’s announcement in June to provide meaningful compliance assistance in understanding how federal labor laws apply in specific situations. The opinion letters addressed tip pooling, emergency pay, the interplay between the FLSA and the Family and Medical Leave Act (FMLA), and joint and several liability for overtime for commonly controlled entities.
Emergency Pay
FLSA2025-04 addressed whether “emergency pay” provided to firefighters and other employees of a city must be included in the regular rate of pay used to calculate overtime premiums and how to calculate the regular rate when such pay is included. This opinion letter specifically addresses a firefighter/paramedic receiving a premium payment of one half the employee’s regular hourly rate of pay (the base or usual hourly rate) for every hour worked during an emergency period. This is defined as a period where, due to a disaster or emergency declaration, only some designated emergency employees must work. While the job duties remain the same, other factors, like extreme weather, make the duties more likely to cause physical hardship.
The WHD found, under these specific facts, the employer at issue should include “emergency pay” earned for hours worked within the regular rate for purposes of overtime premium calculations. The FLSA requires payment “at a rate not less than one and one-half times the regular rate at which [the employee] is employed” to all non-exempt employees for all hours worked over 40 hours in a workweek. The “regular rate” must include “all remuneration for employment paid to, or on behalf of, the employee,” and must reflect all payments earned during the workweek, exclusive of overtime payments.
The FLSA provides for eight exclusions from the regular rate of pay. The situation at hand did not fit either of the two exclusions which most likely may have applied: discretionary bonuses and regular premium pay. This particular payment was not paid pursuant to a policy that left no discretion as to whether they are owed to the employee. Also, it is not an excludable premium because: (1) it is not contingent upon the employee working in excess of any particular amount of hours; (2) it is not contingent upon the work being performed “on Saturdays, Sundays, holidays, or regular days of rest, or on the sixth or seventh day of the workweek”; and (3) it is not contingent upon the work being performed outside “the basic, normal, or regular workday … [or] workweek” of the employee. Therefore, the emergency pay should be included in the regular rate of pay to calculate overtime premiums for any non-exempt employees.
The calculation method to follow is as described below.
Total hours worked in a workweek
Using the WHD’s provided example of an employee earning a base wage of $20 per hour for a total of 50 hours in a workweek, during which 20 hours are emergency pay hours paid at a rate of one half the base hourly rate:
50 hours
Joint Liability for Overtime
FLSA2025-05 addresses whether two entities that are physically connected, and whose ownership, management, and operations appear common, are jointly and severally liable for all aspects of compliance under the FLSA. This opinion letter addresses an employee who works at a restaurant and a members-only club which operate on separate floors of a hotel but whose ownership, management, operations, and other factors appear to be common. The employee’s rate of pay is the same for both employers. The establishments share a kitchen, offer substantially the same food and beverages, and operate under similar trade names. The employee performs work in the same workweek for both establishments as do other employees. The employee is also “clocked in” at one establishment while assigned to another. Managers in one establishment participate in disciplinary matters for the other establishment. Picking up additional hours at one establishment while working primarily at another puts the employee beyond 40 hours worked in the workweek. However, the employee was told they would not be eligible for overtime since the establishments were two different companies.
Under the FLSA, separately incorporated entities may be considered a single employer with respect to an employee, or employees, for purposes of compliance with the FLSA. Alternatively, even if two or more entities are considered separate employers, they can nonetheless be “joint employers” for purposes of liability for wages and overtime. When one employer employs a worker for one set of hours in a workweek, and another employer employs the same worker for a separate set of hours in the same workweek, that scenario may be, under appropriate circumstances, “horizontal” joint employment. This can occur where employers interchange or share employees.
Here, the WHD found evidence that there was horizontal joint employment: (1) they shared a kitchen and had similar food and beverage menus; (2) managers periodically supervise and manage both facilities; (3) the facilities have the same owners; (4) the employees can clock in at one establishment and be directed to work at the other; and (5) there are identical rates of pay. Employers with similar structures should be aware that corporate formalities are not enough to overcome the operational realities.
Tip Pooling and Front-of-House Employees
FLSA2025-03 addresses whether a restaurant employer may include “front-of-house” oyster shuckers in a traditional tip pool with servers for whom the employer takes a tip credit. This opinion letter addresses a seafood restaurant employer that requires servers to contribute to a tip pool that includes other employees that do not receive tips directly from customers. This includes front-of-house oyster shuckers at the oyster bar in the dining room. These oyster shuckers are also included in the tip pool. The back-of-house oyster shuckers work in the restaurant’s kitchen and are not a part of the tip pool. The employer also takes a tip credit towards its federal minimum wage obligation for the servers.
Employers are generally required to pay employees no less than the federal minimum wage. However, the FLSA permits an employer to satisfy a portion of its minimum wage obligation for tipped employees by taking a tip credit equal to the difference between the required direct wage (which must be at least $2.13 per hour) and the federal minimum wage. Only employees who customarily and regularly receive tips are considered when taking a tip credit. An employer taking a tip credit can require employees to participate in a tip pool only if the tip pool is limited to employees who customarily and regularly receive tips. Examples of included employees are waiters, bellhops, waitresses, countermen, busboys, and service bartenders. Examples of excluded employees are janitors, dishwashers, chefs, and laundry room attendants. The WHD has found, however, that counter person(s) who interact with and serve customers may participate in tip pools, like itamae-sushi chefs, teppanyaki chefs, sommeliers, and hibachi waiter-chefs.
The common thread in WHD’s guidance is that to be an individual who customarily and regularly receives tips, an employee must engage in service-related functions and have sufficient interaction with the customers who leave tips, a portion of which are subsequently contributed to a tip pool. In the case of the front-of-house oyster shuckers, they may be considered employees that customarily and regularly receive tips and can be included in the tip pool. Similar to sommeliers, they directly service the customers by sharing and detailing oyster offerings, make suggestions to customers regarding the oyster offerings, and field questions about the different options. They also prepare the oysters in plain view of the customers like an itamae-sushi or teppanyaki chef. The back-of-house oyster chefs do not meet these requirements and are properly excluded from the tip pool. This interpretation is consistent with prior WHD guidance defining occupations that “customarily and regularly” receive tips.
FLSA and FMLA
FLSA2025-02-A addresses how to calculate the number of hours of Family and Medical Leave Act leave available to correctional law enforcement employees who work a fixed “Pitman Schedule” requiring 12-hour shifts over a two-week cycle that includes mandatory overtime. In this opinion letter the WHD addressed the appropriate method for calculating intermittent or reduced schedule FMLA leave hours when employees work fixed schedules that include mandatory overtime hours and may volunteer for additional hours that are not part of the published weekly schedule. The employer’s published schedule mandates 84 hours of work every two weeks. Therefore, the employer calculates the 12-workweek FMLA leave entitlement as equivalent to 504 hours. This calculation excludes voluntary hours that are not part of the published hours.
The FMLA regulations provide that an employer may calculate an employee’s FMLA leave entitlement by converting fractions of a workweek of leave to their hourly equivalent in a manner that equitably reflects the employee’s total normally scheduled hours. These are generally the hours the employee would have worked but for the use of leave. It is common for employers to convert the entitlement to 480 hours of FMLA leave per leave year for employees who work a 40-hour workweek. However, it is the specific employee’s actual schedule that determines the conversion calculation. Similarly for intermittent leave, the leave use should not result in a reduction in the total amount of leave to which the employee is entitled beyond the amount of leave actually taken.
In this specific case, the conversion of the 12-workweek FMLA leave entitlement to a 504-hour leave entitlement is in accordance with the FMLA’s requirements. It properly includes normally scheduled hours while excluding voluntary additional hours. When deducting from the FMLA entitlement, mandatory overtime hours are included properly.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Sixth Circuit: Avoid Aggressive Tactics to Determine Sincerely Held Religious Beliefs for Religious Accommodations
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September 29, 2025
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Discussion
On September 29, 2025, the Sixth Circuit Court of Appeals ruled a married couple that challenged their employer’s process for granting a religious accommodation could proceed with their case alleging that they were subjected to an adverse employment action. Here, the employer was a national laboratory in Tennessee that required all employees to receive a COVID-19 vaccination or face termination. The plaintiffs, a married Christian couple, believed that the vaccine mandate violated their religious beliefs opposing abortion because the COVID-19 vaccines were developed using cells extracted from aborted fetuses. However, those requesting a religious accommodation would have to go on unpaid leave or use vacation days until the end of the pandemic.
The plaintiffs sued for and received a temporary restraining order barring enforcement of the unpaid leave policy. During this period, the wife qualified for a medical accommodation. However, the husband was told he needed to sit for a panel interview during which the employer’s representatives would examine him about this religious beliefs. During this process, he was required to read and respond to a fact sheet that contained information about cell lines from aborted fetuses and quotes from faith leaders that differed from his beliefs. The plaintiffs sued for disparate treatment, failure to accommodate, and retaliation due to their objections to the vaccine mandate. The district court granted summary judgment in favor of the defendant employer, and the plaintiffs appealed.
While the court ultimately found the wife did not have standing and suffered no harm due to the fact she received a medical accommodation, the court did find the husband’s claims were held to too high of a standard by the district court. Under recent Supreme Court precedent in Muldrow v. City of St. Louis, an employee does not need to show that the discrimination caused a “materially adverse” impact beyond that they were forced to choose between faith and work. In order to prove his disparate treatment claim, the husband had to show only that he was treated worse than other employees and not that the harm incurred was significant. For the failure to accommodate claim, the husband only had to show that the harm is having to choose between violating his religious beliefs and violating workplace policies. Lastly, as to the retaliation claim, the court found that a reasonable juror could find that the interview process the husband had to endure “could well dissuade a reasonable worker from making” a request for accommodations. Ultimately, the court found that the district court erred in granting summary judgment to all of the husband’s claims and remanded it for a jury trial in accordance with its opinion regarding the burdens of proof for each separate claim.
This case reinforces that employers should not use aggressive tactics to determine whether an employee’s religious beliefs are sincerely held in order for a religious accommodation to be provided. Instead, employers should focus on whether the accommodation can be provided or whether it would constitute an undue hardship.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Alaska: Final Regulations Published for Paid Sick Leave Law
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September 25, 2025
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Discussion
The Alaska Department of Labor and Workforce Development has published final regulations and FAQs for the state’s new paid sick leave (PSL) law. Enacted by ballot measure in 2024, the PSL law went into effect on July 1, 2025, with the regulations taking effect as of September 25, 2025.
By way of background, all employers are covered under the PSL law, and most employees are eligible, with exceptions for government workers, youth and student workers, and employees exempt from minimum wage and overtime under Alaska state law. Under the PSL law, employers with fewer than 15 employees must allow them to accrue and use up to 40 hours of sick leave per year and employers with 15 or more employees must allow annual accrual and use of up to 56 hours of leave. Key aspects of the final regulations are summarized below.
Determining employer size. The regulations explain how employers should count employees to arrive at their size, which determines whether the employer must provide 40 or 56 hours of PSL per year. The regulations direct employers to use a full-time equivalent calculation for the previous calendar year by adding all hours worked by all employees during the calendar year and dividing this sum by the number of hours a full-time employee would work during the calendar year.
Front-loading leave. Notably absent from the PSL law was whether employers are permitted to front-load PSL for employees. The regulations confirm that employers may opt to front-load PSL at the beginning of the year, exempting employers from having to allow employees to carry over their accrued, unused leave at the end of the year.
Establishing an accrual year. The regulations stipulate that unless an employer front-loads PSL, they must establish a consecutive 52-week year during which PSL accrues. Employers that don’t establish an accrual year have a calendar year automatically established.
Cash-out policies. Employers may have a policy that allows (but does not require) employees to “cash out” unused, accrued paid time off and sick leave in place of carryover at the end of the year or at separation of employment. The regulations require the cash-out policy to be in writing and provided to employees. Employees must voluntarily sign off on the cash-out.
Rate of compensation. The regulations outline what methods should be used to determine compensation rates for piece work and workers with commissions, bonuses, noncash compensation and varied hourly rates.
Hours worked. The regulations define “hours worked” to exclude holidays, vacation and uncompensated, nonworking on-call hours, which are further defined.
Alternate employer policies. The PSL law allows employers to meet their PSL obligations with their own paid leave or paid time-off plans, as long as the plan meets the requirements of the law. The regulations further specify that employers must notify employees in writing that the alternate policy will be used to satisfy the PSL law. The regulations also state that leave provided beyond what the PSL statute mandates is not subject to the PSL law.
Employer notice obligations. The regulations require employers to include in employees’ pay statements the amount of PSL the employee has used in the accrual year as well as the employee’s PSL balance.
Employee notice obligations. Under the statute, employees must make a good-faith effort to provide advance notice of foreseeable PSL to their employer. They must also make a reasonable effort to schedule foreseeable paid sick leave in a manner that does not unduly disrupt the employer’s operations. The regulations add that employers may require up to 10 days’ notice of foreseeable leave if this requirement is in a policy provided to the employee. The policy may further require that employees not schedule medical appointments during peak business hours, when work is time-sensitive or when there is a mandatory meeting, if the employee’s absence would unduly disrupt business operations. Employees who were provided with the policy but who fail to follow it may be disciplined or have their PSL denied.
Verification of leave. The regulations provide that employers do not have to pay for sick leave if they have not received documentation they requested (as permitted by the law) to verify leave of more than three consecutive days. However, the regulations require employers to include the verification requirement in their written sick leave policy that is provided to employees.
Notification methods. Under the regulations, employers may satisfy their written notice obligations by providing the notices in person, by mail, by email, in a paycheck, in a printed or electronic handbook or manual, or in a workplace posting.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
California: Are Recent Legislative Updates Really that Shocking?
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Discussion
California’s legislative session has come to a close with the Governor signing a number of bills impacting employers and employees. As in previous years, the California Legislature has been active this season. Here is a summary of key updates employers should be aware of.
AB 288 | JAN 1, 2026 – PERB is California’s version of the NLRB. The Public Employment Relations Board (PERB), already existing to protect public employees, is expanded to protect all employees that otherwise would be protected by the terms of the National Labor Relations Act (NLRA), but are, by act or omission of the National Labor Relations Board (NLRB), not in fact protected. The bill seeks to ensure that all California workers maintain the freedom to engage in collective action, to organize, form, join, or assist labor organizations, and engage in collective bargaining. PERB will have similar authority to address collective bargaining and employee claims as exists for the NLRB.
There will be a phase in period for adjudicating unfair labor practice cases: the bill is effective January 1, 2026 for employers with 500 or more employees for refusal to bargain or acknowledge election certification or unilateral withdrawal of recognition of an employee representative by an employer of any size (Category 1 cases); July 1, 2026 for claims that an employer of any size refused to bargain, recognize, or give effect to an election certification (Category 1); January 1, 2027 for claims that an employer failed to bargain in good faith where engaged for bargaining for over six months without agreement (Category 2); January 1, 2027 for all other cases, which are organized within this category from priority 1 to 4 (Category 3). Priority of cases is designated in order of Category. Unfair practice violations may result in $1,000 civil penalties per worker per violation.
AB 406 | OCT 1, 2025 – Reinstates Protections Against Qualifying Acts of Violence for Violations Prior to December 31, 2024; Moves Leave to Attend Judicial Proceedings to the Government Code; Expands Paid Sick Leave. As of January 1, 2025, protections including leave for victims of qualifying acts of violence was moved from the Labor Code to the Government Code to provide the Civil Rights Division (CRD) authority over alleged violations. This bill reinstates the provisions existing under the Labor Code on or before December 31, 2024 to apply only to alleged actions or inactions occurring on or before that date. The previous protections are reinstated until 2035.
The bill also transfers enforcement authority for discrimination prohibitions relating to crime victims, including when the victims are employees’ family members, taking leave to attend judicial proceedings from the Division of Labor Standards Enforcement (DLSE) to the Civil Rights Department as of January 1, 2026, by transferring laws from the Labor Code to the Government Code. The current Labor Code sections will apply to violations occurring on or before December 31, 2025, and those laws will sunset as of 2035.
Finally, the paid sick leave law has been amended to specifically allow for leave to be taken (1) to attend judicial proceedings relating to crime victims as was stated in the Labor Code prior to 2025; (2) for purposes of jury duty, appearing as a witness in a judicial proceeding, and to obtain certain crime victim relief as of January 1, 2025; and (3) for crime victims to attend judicial proceedings as of January 1, 2026. These changes reflect reconciliation of provisions among the moving parts of these laws to be consistent across code sections and expand on what already existed.
AB 538 | JAN 1, 2026 – Public works access to payroll records. Contractors and subcontractors must currently maintain payroll records for employees on public works projects. When the request for records is made through the project-awarding public agency, and the agency does not have a certified copy of the records, this bill requires the agency to obtain the payroll records from the contractor. Once the contractor receives the request from the awarding agency, the contractor has 10 days to comply. If the contractor fails to comply, the DLSE is notified and may seek to withhold penalties from the contract award.
AB 692 | JAN 1, 2026 – “Stay-or-Pay” Agreements are a Restraint of Trade. This bill prohibits employers from entering into agreements that require payment of debts, debt collection or ending forbearance, or imposes any penalty, fee, or cost on a worker if their work relationship terminates. Provided that certain requirements are met, this restriction does not apply to tuition repayment costs for a transferable credential, enrollment in an approved apprenticeship program, or repayment of a hiring bonus that is not tied to specific job performance. These prohibitions apply to contracts entered into on or after January 1, 2026. Victims or worker representatives may bring civil lawsuits for violations of the law, which may result in a minimum of a $5,000 penalty per worker, plus injunctive relief and attorneys’ fees. The Governor encouraged further legislation in 2026 to preclude “stay-or-pay” agreements in collective bargaining.
AB 845 | [Upon Legislative Appropriation] – Agricultural Employee Claims. This bill requires any agency within the Labor and Workforce Development Agency to route complaints received from agricultural employees to the proper state agencies with jurisdiction over the complaints, and prohibits the transmitting entity from disclosing the identity and personal information of the complainant to the extent prohibited by law without their consent.
AB 858 | JAN 1, 2026 – Extension for Rehiring Displaced Workers. This bill extends Labor Code § 2810.8 through January 1, 2027. Previously expiring at the end of 2025, former employers in the hospitality and business service provider industries must offer re-employment to those who were laid off for qualifying reasons during the COVID-19 pandemic when positions are available for which they qualify, in addition to other notice and recordkeeping requirements.
AB 889 | JAN 1, 2026 – Changes to Public Works Annualization of Per Diem Wages. Employers use annualization to calculate fringe benefit credits that may be applied to prevailing rate wages on public work projects. This bill removes existing exceptions for employers to pay the general prevailing rate of per diem wages for public works projects and revokes annualization exemptions authorized before January 1, 2026. Employers are authorized to take full credit for the hourly amounts contributed to defined contribution pension plans that provide for both immediate participation and essentially immediate vesting even if the employer contributes at a lower rate or does not make contributions to private construction. The employer has the burden to prove that the credit for employer payments was calculated properly. Employers are required to produce records of employee hours and employer payments on private construction sufficient for the Labor Commissioner to verify that the credit for employer payments was properly calculated on an annualized basis; the Labor Commissioner may deny the employer credit for employment payments if the employer does not produce the requested records.
AB 1002 | JAN 1, 2026 – Contractor Penalties for Wage and Hour Violations. The state Attorney General may bring a lawsuit against a contractor or deny a license application or renewal where the contractor has failed to pay its workers the full amount of wages that the workers are entitled to under state law, has not fulfilled a wage judgment, or is in violation of an injunction or court order regarding the payment of wages to its workers. A good faith mistake regarding which wage rate applies to a particular category of work will not be considered a violation of the law.
AB 1293 | JAN 1, 2026 – Workers’ Compensation Qualified Medical Evaluators Report Form Template. This bill requires the Division of Workers’ Compensation to develop templates for a medical evaluation request form and a qualified medical evaluator (QME) report form. The Division is required to adopt regulations to implement this bill by January 1, 2027.
AB 1340 | JAN 1, 2026 – Transportation Network Company Drivers Labor Relations Act. This bill requires that transportation network company (TNC) drivers, providing prearranged passenger transportation services, have the right to form, join, and participate in the activities of TNC driver organizations, to bargain through representatives of their own choosing, to engage in concerted activities for the purpose of bargaining or other mutual aid or protection, and to refrain from such activities. This essentially gives rideshare drivers the ability to organize while still being classified as independent contractors. The PERB is required to enforce these rules.
AB 1398 | JAN 1, 2026 – Workers’ Compensation Disclosure Requirements. All interested parties in a workers’ compensation case must disclose to a third-party payer, or other entity to whom a claim for payment is presented for services furnished pursuant to a referral, a financial interest in an entity providing services. The disclosure must be made in writing, at the time the claim for payment is presented for services furnished pursuant to a referral.
AB 1514 | JAN 1, 2026 – Extended Independent Contractor “ABC” Exemption for Licensed Manicurists and Commercial Fishers. Under Labor Code § 2778, manicurists and commercial fishers are exempt from using the “ABC” test to determine independent contractor status. Those exemptions were set to sunset and now have been extended until 2029 and 2031, respectively.
SB 53 | JAN 1, 2026 – Transparency in Frontier Artificial Intelligence Act (TFAIA). Large developers of artificial intelligence models are required to follow specified standards when creating frontier models and to publish information about their models on their websites. For employers, it creates whistleblower protections for those working with foundation models and prohibits a frontier developer from preventing, or retaliating against, a covered employee from or for disclosing information to the Attorney General, a federal authority, the employee’s superior, or an employee who has authority to investigate, discover, or correct the reported issue, if the covered employee has reasonable cause to believe that the information discloses that the frontier developer’s activities pose a specific and substantial danger to the public health or safety resulting from a catastrophic risk or that the frontier developer has violated the TFAIA. It also requires frontier developers to have specified internal reporting procedures for this purpose. This bill preempts any similar local laws enacted on or after January 1, 2025.
SB 261 | JAN 1, 2026 – DLSE Enforcement of and Penalties for Wage Theft. Where an employer fails to pay a final judgment for unpaid wages within 180 days of the final judgment, they are subject to a civil penalty of up to three times the judgment amount. Penalties are distributed 50/50 between employees and the DLSE. The Labor Commissioner or public prosecutor must be awarded court costs and reasonable attorneys’ fees for successful judgment enforcement.
SB 294 | FEB 1, 2026 – Workplace Know Your Rights Act. By February 1, 2026, all employers must provide employees with a stand-alone written notice of rights to each current employee through personal service, email, or text message, or other method if it can reasonably be expected to be received by the employee within one business day of sending. The written notice must also be provided to each new employee upon hire and annually to existing employees. The Labor Commissioner is expected to provide a template notice by January 1, 2026. The notice must describe employee rights to workers’ compensation benefits, notice of inspection by immigration agencies, organize a union or engage in concerted activity, and when interacting with law enforcement at the workplace, as well as other information deemed necessary by the Labor Commissioner. Employers must keep records of compliance for three years, including the date that each written notice is provided or sent.
If an employee has notified their employer that they would like their designated emergency contact to be notified in the event they are arrested or detained, the employer must notify the designated emergency contact if the employee is arrested or detained on their worksite or if the employer is otherwise aware of arrest or detention away from the worksite during work hours. Employers must provide current employees the opportunity to name an emergency contact no later than March 30, 2026, and at the time of hire for new employees hired after March 30, 2026. The employer must also allow employees to provide updated emergency contact information through their duration of employment.
SB 303 | JAN 1, 2026 – Admissions During Bias Mitigation Training Do Not Trigger FEHA Protections. Where an employee’s assessment, testing, admission, or acknowledgment of their own personal bias is made in good faith and solicited or required as part of a bias mitigation training does not constitute unlawful discrimination under the Fair Employment and Housing Act (FEHA). This measure is enacted in part to encourage employers to conduct bias mitigation training.
SB 447 | JAN 1, 2026 – Workers’ Compensation Firefighter and Peace Officer Death Benefits Extended. When a local firefighter or peace officer dies as a result of an accident or injury caused by external violence or physical force while performing their duty, workers’ compensation rules require the employer to continue providing health benefits to the deceased employee’s minor dependents under the benefits extended to the surviving spouse, or if there is no surviving spouse, until the minor dependent reaches a certain age. This bill extends that age from 21 to 26 years old.
SB 464 | JAN 1, 2026 – Pay Data Reporting Update. Employers with 100 or more employees have been required to provide pay data reporting to the State. This bill amends those requirements. First, this bill requires employers to retain collected demographic information separate from personnel files. Second, it makes civil penalties mandatory, rather than optional, for failure to report, which are $100 per employee for a first violation and $200 per employee for subsequent violations. Finally, pay data reporting will change as of January 1, 2027 to include 13 more data points, for a total of 23 data points reported. Employers will need to start collecting the required data in 2026 to prepare for reporting in 2027.
SB 477 | JAN 1, 2026 – CRD Procedural Updates Under FEHA. There is a set process for how the CRD manages received complaints under FEHA. This bill makes some clarifications and expands the reasons for tolling certain timed procedures. The bill clarifies the definition of “group or class complaint” to mean any complaint alleging a pattern or practice. Where a group or class complaint would otherwise cover another complaint made, the department will issue a right-to-sue notice for that complaint on request or at the conclusion of the group or class complaint. Additionally, the time for a complainant to file a civil action under certain identified statutes is tolled until one year after the department issues either a written notice that it has closed its investigation without electing to file a civil action for the alleged violation, or written notice that the complaint has remained closed following an appeal to the department if a timely appeal is made to the original closure. The time for the CRD to bring certain claims against an employer or issue right-to-sue letters may be tolled during a dispute resolution proceeding (e.g., mediation), based on mutual written agreement by the parties, during the time the CRD’s investigation is extended due to a pending petition to compel, or during a timely appeal for closing the complaint.
SB 487 | JAN 1, 2026 – Workers’ Compensation Benefits and Obligations for Firefighters and Peace Officers. This bill says that an employer is entitled to receive no more than 1/3 of the third-party defendant’s liability insurance policy limit for an injured peace office or firefighter, if the employee establishes that their total damages exceed the net recovery after satisfaction of the employer’s claim and that the total liability insurance limits available are insufficient to fully compensate the employer and employee’s proven damages. The bill limits an employer’s right to reimbursement, subrogation, or lien to the maximum recovery threshold. Employers are prohibited from asserting any recovery by an injured employee as a credit or offset against future workers’ compensation benefits and must have a settlement or release to limit the employer’s claim for reimbursement to the portion of the settlement not allocated to the employee under this bill.
SB 513 | JAN 1, 2026 – Personnel Records Clarified. An employee’s right to review their personnel file related to their performance includes education and training records. Education and training records must include the name of the employee, the name of the training provider, the duration and date of the training, the core competencies of the training (including skills in equipment or software), and the resulting certification or qualification.
SB 590 | JUL 1, 2028 – Paid Family Leave to Care for Designated Persons. Paid family leave benefits will be expanded to include caring for a designated person with a serious health condition. “Designated person” means any care recipient related by blood or whose association with the individual is the equivalent of a family relationship. This is consistent with the definition of designated person under the California Family Rights Act (CFRA), which differs from the definition under the state paid sick leave law. Upon request to the EDD for wage replacement benefits for leave to care for a designated person, the employee must identify the designated person, and attest under penalty of perjury how that person is related by blood or is the equivalent of a family relationship.
SB 597 | JAN 1, 2026 – Contractor Joint Liability Clarified. Contractors are currently liable for wages of subcontractor employees. This bill limits the direct contractor’s liability to payments for labor required by the subcontractor’s agreement with the laborer or the subcontractor’s collective bargaining agreement. Additionally, liability of direct contractors will not be based on the employer’s misclassification of the craft of a worker. The statutory remedies are deemed to be cumulative of any other available remedies. Further, a direct contractor is not otherwise liable for fringe or other benefit contributions if it pays outstanding fringe and other benefit contributions owed to the worker through a joint check made payable to the subcontractor and the labor trust fund. The definition of “direct contractor” was revised to mean a contractor that has a direct contractual relationship with an owner or any other person or entity engaging contractors or subcontractors for the erection, construction, alteration, or repair of a building, structure, or other private work on behalf of the owner.
SB 617 | JAN 1, 2026 – CalWARN Notice Revision. A CalWARN notice of mass layoff, relocation, or termination must include (1) whether the employer plans to coordinate services, such as a rapid response orientation, through the local workforce development board, the employer plans to coordinate services through a different entity, or the employer does not plan to coordinate services with any entity; (2) the email and phone number of the local workforce development board and a scripted description of the board; (3) a description of the statewide food assistance program known as CalFresh, the CalFresh benefits helpline, and a link to the CalFresh internet website; and (4) a functioning email and telephone number of the employer for contact. When coordinating services with a local workforce development board, an employer must do so within 30 days from the date of the notice.
SB 642 | JAN 1, 2026 – Pay Transparency and Equal Pay Updates. Currently, employers must disclose the pay scale of a position in job postings and upon request. This bill revises “pay scale” to mean a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire. Additionally, the statute of limitations for violations of the equal pay law is extended to three years, regardless of whether a violation is considered willful. There is also a six-year lookback period for obtaining remedies. The bill states that a cause of action under the equal pay law arises when an alleged unlawful compensation decision or practice is adopted, an individual becomes subjected to an unlawful compensation decision or practice, or an individual is affected by application of an unlawful compensation decision or practice, including each time wages, benefits, or other compensation is paid. For purposes of equal pay, “sex” has the same definition as is used under FEHA and equal pay must be provided as compared to those of “another” sex rather than the current standard of the “opposite” sex; and “wages” and “wage rates” include all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.
SB 809 | JAN 1, 2026 – Misclassification of Construction Drivers; Vehicle Expenses. Currently, the Motor Carrier Employer Amnesty Program allows a motor carrier performing drayage services to be relieved of liability for statutory or civil penalties associated with the misclassification of commercial drivers as independent contractors if the motor carrier enters into a settlement agreement with the commissioner. This bill creates a similar program, known as the Construction Trucking Employer Amnesty Program, allowing an eligible construction contractor to be relieved of liability for certain statutory or civil penalties associated with the misclassification of construction drivers as independent contractors, if the eligible construction contractor executes a settlement agreement negotiated with, or approved by, the Labor Commissioner prior to January 1, 2029. Additionally, the Labor Code will state that mere ownership of a vehicle used by a person in providing labor or services for remuneration does not determine whether that person is an independent contractor; the statutory “ABC” test determines independent contractor status.
Currently, employees are required to be reimbursed for necessary expenditures incurred in the discharge of their duties. This bill expressly requires reimbursement for expenses related to use of a personal or commercial vehicle while performing their job duties. With respect to construction trucking, a commercial motor vehicle driver who owns the truck, tractor, trailer, or other commercial vehicle that they use in performing their job duties is entitled to reimbursement for the use, upkeep, and depreciation of that vehicle, regardless of whether the vehicle is owned by the driver as an individual or through a corporate entity. This addition to the Labor Code is “declarative of existing law.” The amount to be reimbursed for the use of the truck, tractor, or trailer must be negotiated either by the driver (or their representative) and the employer. The amount negotiated must be either a flat rate reimbursement or a per-mile reimbursement, but must at least be the actual amount expended by the driver for a flat rate reimbursement or the standard mileage reimbursement rate set by the IRS. This expense reimbursement may be paid directly to the driver in the driver’s name or to a corporate entity owned and controlled by the driver if the vehicle is owned by the corporate entity.
SB 847| JAN 1, 2026 – Workers’ Compensation Lien on Real Property. This bill allows the Division of Workers’ Compensation to obtain a lien on an uninsured employer’s real property transferred after an employee’s injury, where the transfer indicates that it was made as a gift with no transfer tax paid or was intended to hide the asset.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Colorado: Workers’ Compensation Changes to Employee Selection of Treating Physician
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January 1, 2028
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Discussion
HB 1300 will give employees broader ability to select their primary treating physician for purposes of receiving health care in connection with a workers’ compensation claim. Within seven days of receiving notice of an on-the-job injury, employers must give written notice to the employee of their right to designate a treating physician, including where to access the Division of Workers’ Compensation’s list of Level I and Level II accredited physicians. The Division will provide a template designation form on which employees are required to designate their preferred provider.
The designated physician must be within 70 miles of the employee’s work or home address, unless there are three or fewer physicians within 70 miles who are willing to treat the injured employee, in which case the designated physician must be within 100 miles, unless the employee can show good cause otherwise.
The employee may make one treating physician designation any time after injury, but before being placed at maximum medical improvement. If the employee declines to designate a physician within seven days after receipt of notice of their right to designate, an employer or insurer may designate the Level I or Level II listed physician on their behalf. However, the employee may still subsequently designate a physician. An employee can subsequently change their designated treating physician once within 120 days after the first physician designation, but before the employee reaches maximum medical improvement.
For injured employees who are not a resident of Colorado, an employer must designate a treating physician within 10 days after receiving notice of an on-the-job injury and notify the employee of the designation in writing. The treating physician may be within 100 miles of the employee’s home address. If the employer or insurer declines to timely designate, the employee may designate a treating physician within 100 miles of the employee’s home in writing to the employer or through attendance at an appointment with the employee’s designated physician.
In an emergency situation, an injured employee must be taken to any physician or health-care facility that is able to provide the necessary care. Once emergency care is no longer required, the treating physician selection procedures may be followed. Within seven days of receiving notice that emergency care is no longer required, an employer or insurer must provide written notice to the injured employee of their right to designate a treating physician.
Additionally, an employer or the employer’s insurer will be required to use the Division of Workers’ Compensation’s utilization standards when responding to a request for authorization from a treating physician. If they do not, the director of the Division may deem the physician’s services as authorized, reasonable, and necessary and require payment for the services by the employer or the employer’s insurer.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Connecticut: Protections for Sexual Assault and Human Trafficking Victims
/in HR AlertsAPPLIES TO
All Employers with Employees in CT
EFFECTIVE
October 1, 2025
QUESTIONS?
Contact HR On-Call
(888) 378-2456
Discussion
Effective October 1, 2025, HB 7236 amended the Connecticut Fair Employment Practices Act to add the status of being a victim of sexual assault or human trafficking as a protected characteristic. In addition, it is an unlawful employment practice to deny a reasonable leave of absence to such persons in order to: (1) seek attention for injuries caused by sexual assault or trafficking; (2) obtain services including safety planning from a domestic violence agency or rape crisis center; (3) obtain psychological counseling; (4) take other actions to increase safety from future incidents of sexual assault or trafficking; or (5) obtain legal services, assist in the prosecution of the offense, or otherwise participate in legal proceedings in relation to the incident or incidents of sexual assault or trafficking.
Employees who avail themselves of leave shall provide their employer with certification, within a reasonable time frame. Such certification can be: (1) a police report; (2) a court order protecting or separating the employee from sexual assault or trafficking; (3) other evidence from the court or prosecuting attorney that the employee appeared in court; or (4) documentation from a medical professional including a counselor. If an employee has a physical or mental disability resulting from an incident of sexual assault or trafficking, the employee shall be treated in the same manner as an employee with any other disability.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Delaware: New Pay Transparency Requirements
/in HR AlertsAPPLIES TO
Employers in DE with 26+ Employees
EFFECTIVE
September 26, 2027
QUESTIONS?
Contact HR On-Call
(888) 378-2456
Discussion
On September 26, 2025, Delaware Governor Matt Meyer signed HB 105, adding Delaware to the growing list of states with pay transparency obligations for employers. The law is set to take effect on September 26, 2027, and will apply to employers with 26 or more employees.
Under HB 105, covered employers must include the hourly or salary compensation or compensation range and a general description of benefits and other compensation in any external or internal job postings. If no job opportunity has been made available to the applicant, employers must provide such information prior to an offer or discussion of compensation or at any time upon the applicant’s request.
The law applies to Delaware-based positions and certain remote roles offered by Delaware employers, with limited exceptions including interim or temporary jobs that need to be filled immediately and positions covered by a collective bargaining agreement that is executed, amended, modified, renewed or replaced before September 26, 2027.
In addition to the disclosure requirements, the new law imposes new recordkeeping requirements on employers. Specifically, employers must make, keep and preserve job descriptions and salary and wage rate history for each employee for at least three years.
Employers that fail to comply with the law may be subject to a written warning for a first offense and civil penalties of between $500 and $10,000 for each subsequent violation or for any act of retaliation against an individual for asserting their rights under the law.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
New York, NY: Legislative Update
/in HR AlertsAPPLIES TO
All Employers with Employees in New York City
EFFECTIVE
As Indicated
QUESTIONS?
Contact HR On-Call
(888) 378-2456
Discussion
Earned Safe and Sick Time Act Amendments
The New York City Council approved amendments to the Earned Safe and Sick Time Act (ESSTA). The most notable changes are summarized below.
Unpaid Leave Bank. Employers shall provide to employees upon hire and on the first day of each calendar year, a minimum of 32 hours of unpaid safe/sick time that is immediately available for use. An employer is not required to carry over to the following calendar year any unused unpaid safe/sick time.
Prenatal Leave. Employers shall provide employees 20 hours of paid prenatal leave during any 52-week calendar period.
New Covered Uses. In addition to the existing reasons for safe/sick time, employees can now take leave:
Temporary Schedule Change. Employees can still request a temporary schedule change, but employers is not required to agree to the requested change. Employers cannot retaliate against an employee for requesting a schedule change.
Although the amendment has been passed, the Mayor has not yet signed it. The amendments will become law 120 days after the Mayor signs.
Minimum Pay for Drivers Amended
Effective September 22, 2025, the minimum per-mile rate for high-volume for-hire vehicle trips that begin in New York City and end outside of New York City has been increased by the Taxi and Limousine Commission. Drivers must be paid $1.700 per mile for a trip dispatched to a vehicle that is not an accessible vehicle and no less than $2.122 per mile for a trip dispatched to an accessible vehicle.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Allegheny County, PA: Executive Order Attempts to Fill NLRB Gaps
/in HR AlertsAPPLIES TO
All Employers with Employees in Allegheny County, PA
EFFECTIVE
August 28, 2025
QUESTIONS?
Contact HR On-Call
(888) 378-2456
Discussion
Following in the footsteps of other states, the Allegheny County, Pennsylvania Executive signed the Strengthening Worker Protections in Alleghany County Executive Order in an effort to fill the gap in the event the National Labor Relations Act (NLRA) or its key provisions are repealed, invalidated, or otherwise rendered unenforceable. The Order directs the county manager to create a program to establish the Office of Worker Protections (OWP). The purpose of the OWP to investigate, protect, and enforce employee rights where there are violations of Allegheny County’s employee protection laws.
The primary duties of the OWP are to:
The Order also empowers the County Manager to establish an Allegheny County Labor Relations Board in the event of a federal rollback of the NLRA. To that end, the County Manager is directed to ensure that workers in the County “enjoy the fundamental right to organize, engage in collective bargaining, and participate in concerted activities for mutual aid and protection.”
Other jurisdictions, like New York, that have enacted such laws have faced swift legal challenges from the federal government and Allegheny County’s Executive Order is also expected to be challenged. The main issue is that it is likely preempted by the NLRA and that it conflicts with the Supremacy Clause of the U.S. Constitution which contends that federal law takes precedence when there is a conflicting state law. It remains to be seen whether the Executive Order will be enforceable.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase