Laws affecting tips, paid family leave, and non-binary genders are among more than a dozen measures set to impact California employers and employees in 2026. These laws also expand employer reporting requirements and broaden exemptions that allow contractors to work independently instead of being classified as employees.
Improved protections for employees receiving tips
Employees can now ask the California Labor Commissioner to investigate complaints about tips. Employers must follow rules that ban taking employee tips or running unfair tip pools, or they could face investigations.
California equal pay laws to include non-binary genders
California’s Equal Pay Law currently prohibits employers from paying workers lower wages based on their sex. The new law updates the wording to “another sex,” which includes non-binary genders.
Expanded relationships that qualify for paid family leave
Current paid family leave laws give eligible workers up to eight weeks of partial wage replacement for reasons such as bonding with a new child or caring for a seriously ill family member.
Under the new 2026 law, which takes effect on July 1, 2028, a “designated person” will be defined as “anyone related by blood or whose association with the individual is the equivalent of a family relationship.”
More exemptions regarding California’s independent contractor law
California’s controversial labor laws restrict many contractors from working independently and classify them as employees.
AB 1514 extends exemptions for manicurists and commercial fishermen from the employee-versus-independent-contractor rules until Jan. 1, 2029, and Jan. 1, 2031, respectively.
Employers need to expand their reports on pay data
Employers with 100 or more workers currently must submit payroll data reports to the Civil Rights Department each year.
In 2026, the state will require employers to store demographic pay data separately from personnel records. Employers must also include reports on employee demographics, such as race, ethnicity, and sex.
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