Written by

Kari J. BrownLisa Ann Hilario

In this month’s Employment Law Bulletin, we bring to you our 2026 Employment Law Update Action Items from the Employment Law Update seminar held via Zoom on January 14, 2026.  Employers can use this handy list to help ensure their organization is in compliance with new laws that took effect in January 2026.  Please reach out to an SMT employment attorney if you have questions.  We are here to help.

Labor Law Poster

• Get your poster, complete, and display.

2026 CA Minimum Wage Increase

• Review hourly pay rates and raise if necessary
• Review exempt EE salaries and raise if necessary
• Review commissioned EE compensation to determine if they still meet the threshold
• Analyze any formula based on new MW
• Post the current CA MW poster (typically included in state/federal Labor Law poster)

CA Healthcare Worker Minimum Wage

• Review hourly pay rates and raise if necessary
• Review exempt EE salaries and raise if necessary

2026 City Minimum Wage Ordinances

• If you have EEs who work any hours in cities with MW ordinances, check to see if the EEs fit the ordinance definition of EE; if so, the MW ordinance applies to them
• Review hourly pay rates and raise if necessary
• Notify EEs of new local MW
• Print and post the required local city ordinance MW posters

Tips/Gratuities

• Ensure tip practices/policies are compliant
• Ensure managers/supervisors/owners do not participate in tips
• Ensure terms of tip pooling arrangements are clear

Employee Pay Data

• 1/1/2026: Ensure that data collected is stored separately from personnel records
• Collect new demographics throughout 2026 as required for the report due in May 2027

Job Posting Requirements/Pay Scales

• Set pay scales for each job position
• Review pay scales for new positions when you increase compensation for current positions
• Ensure job postings include the required and current pay scale information

Equal Pay Act

• Perform an equal pay audit of new and existing positions
• Ensure you can demonstrate wage differentials are based on permissible factors

2026 IRS Mileage Rate

• Ensure EEs using personal vehicles for business are being properly reimbursed for business mileage
• Inform your payroll/finance department of the mileage rate change so EEs are properly reimbursed

The One Big Beautiful Bill Act

• Determine if any of your EEs earn qualified tips (Tipped-Occupations-Detailed-8-27-2025.pdf (pending final IRS approval))
• CA ERs will need to work with their payroll systems to find ways to identify only FLSA weekly overtime.  This may require special tags or codes for weekly overtime in your system

CA Paid Family Leave Insurance

• Update Employee Handbooks/policies by 7/1/2028
• Train HR personnel and managers regarding the new benefits by 7/1/2028

FEHA Bias Mitigation Training

• Avoid unnecessary investigations:  Before the training, carefully consider the content and how discussions will develop.  If admissions may occur or results of tests/assessments will be shared, admonish EEs that this is part of the process and does not constitute discrimination under the law
• Issue pre-training statements to pre-empt complaints
• Train supervisors and trainers on messaging and how to handle complaints if they arise

Extended SOL for Sexual Assault & Harassment Complaints

• Continue to be on alert

Workplace Know Your Rights Act

• Deliver notice to current and new employees
• Calendar to ensure annual delivery
• Review your emergency contact forms/create an emergency contact form that allows for designee
• DIR template:  California DIR Required Posters
• DIR video TBD

Pay or Stay Contracts are Void

• Review contracts and offer letters to ensure they do not contain unlawful agreements going forward
• If agreement already exists (as of 1/1/26), contact SMT to remediate

Personnel Files

• Audit recordkeeping practices; make sure that education and training records are part of your personnel file retention policy to the extent they exist
• Ensure that the required detail is included with the records; if the certificate doesn’t have the information, develop a process to add it
• Keep records on file for at least 3 years

Construction Trucking Amnesty Program

• If you are in the construction industry and have IKor drivers, call SMT to determine whether you want to participate in the amnesty program
• Make sure you are reimbursing all employees for the business use of their personal vehicle (IRS Mileage Rate is the safe harbor amount)

Independent Contractors – Refresher

• Analyze where this applies to your business/organization
• Review accounts payable records and identify anyone paid on 1099 basis
• Review existing IKor Agreements

Right to Recall

• Continue to add to or prepare a list of layoffs that occurred on or after 3/4/2020 and review the reasons for the layoff
• Determine whether the layoff was due to COVID and if recall responsibilities exist or if there is sufficient evidence to rebut the presumption
• Ensure written offers and notices are delivered as required

Contractor Liability for Wages of Subcontractor EEs

• Review contracts with subcontractors
• Include indemnity provisions where possible
• Do not ignore apparent wage and hour violations and non-payment comments by subcontractor EEs

Artificial Intelligence Models

• If you are a frontier developer:
• Publish required information on website
• Create complaint process for EEs
• Develop notice and post or deliver annually

¿No hablas español?

SMT employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish. Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims. Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group