If you’re running a business in California right now, you probably feel like the goalposts aren't just moving—they’re being redesigned in real-time. It's January 2026. The new year didn't just bring resolutions; it brought a mountain of paperwork and some pretty aggressive shifts in how you have to treat your staff and your data. Honestly, keeping up with California business regulation news today is basically a full-time job.
Most people think the biggest headache is just a higher minimum wage. Wrong. While $16.90 is the new floor for almost everyone, the real "gotchas" are buried in things like the ban on "Stay or Pay" clauses and the sudden, confusing pause on climate reporting for mid-sized companies. You’ve got a lot to unpack if you want to stay out of the Labor Commissioner’s crosshairs this year.
The $70,304 Threshold and the End of "Stay or Pay"
Let's talk money first because that’s where the immediate pain is. As of January 1, 2026, the state minimum wage hit $16.90 per hour. That sounds simple enough, but it triggers a massive domino effect for your salaried staff. To keep someone classified as "exempt" (meaning you don't pay them overtime), you now have to pay them at least **$70,304 a year**.
If you have a manager making $68,000, they are technically non-exempt now. You either give them a raise or start tracking every single minute of their lunch break. It's a binary choice. No middle ground.
Signing Bonuses Aren't What They Used To Be
Then there’s AB 692. This one is a total game-changer for recruiting. For years, companies would give a $5,000 signing bonus with a catch: "If you quit in the first year, you owe us the money back."
California basically just killed that.
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Starting this month, you generally can't require workers to repay debt—like relocation costs or signing bonuses—if they leave. There are a few tiny exceptions for very specific government-backed training, but for 99% of businesses, once you pay that bonus, it’s gone. You can't use it as a "stay" incentive anymore. It’s a sunk cost the moment they sign.
Why California Business Regulation News Today is All About PAGA and AI
If you haven't heard of PAGA (the Private Attorneys General Act), count yourself lucky. But for 2026, the rules of engagement have shifted. Last year saw over 10,000 PAGA notices filed. It's a record.
The new "Reasonable Steps" standard is your only real shield. In the past, if you messed up a payroll decimal, you were toast. Now, if you can prove you conducted audits and trained your supervisors before a claim was filed, you can cap your penalties at 15%. If you wait until you get sued to fix things, that cap jumps to 30%.
It’s essentially a "bribe" from the state: show us you’re trying, and we won’t bankrupt you.
Chatbots Are Now Regulated Entities
The tech side of California business regulation news today is equally wild. SB 243, the "Companion Chatbot Law," is officially live. If your business uses an AI chatbot that’s designed to be "human-like" or meet emotional needs—think mental health apps or even highly personalized sales bots—you have to follow strict disclosure rules.
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- You must tell users it’s not a person.
- If minors use it, you need "self-harm" safeguards.
- You can't let it pretend to be a licensed pro (like a doctor or lawyer).
Customer service bots that just help people track a package are mostly safe for now, but the line is getting blurry. If your bot starts "empathizing" with a frustrated customer, you might be stepping into a regulated zone you didn't bargain for.
The Climate Disclosure Confusion: SB 253 vs. SB 261
This is where things get truly messy. California passed two massive climate laws, and they’ve hit a legal snag.
SB 253 (The Big One): If your company does over $1 billion in revenue, you’re still on the hook. You have to report your Scope 1 and 2 emissions by August 10, 2026. No delays there. CARB (the Air Resources Board) is moving full steam ahead.
SB 261 (The Risk One): This applies to companies with over $500 million in revenue. It was supposed to require a climate risk report by January 1. However, a federal appeals court issued an injunction in late 2025.
So, what do you do? Honestly, most experts say to keep preparing. The Ninth Circuit is hearing arguments right now (January 2026), and that injunction could vanish in a few weeks. If you stop working on your report and the court flips, you'll be scrambling.
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The "Know Your Rights" Deadline is Fast Approaching
Don't ignore February 1, 2026.
That’s the deadline for the "Workplace Know Your Rights Act" (SB 294). You have to give every single employee a standalone notice—not just a page in a 50-page handbook—explaining their rights regarding immigration inspections and law enforcement interactions at work.
The Labor Commissioner was supposed to release a template by January 1. If you haven't downloaded it yet, you're already behind. You also have until March 30 to collect emergency contacts for every worker. If someone gets arrested at work (it happens more than you'd think in certain industries), you are now legally required to notify that contact.
Actionable Insights for the Quarter Ahead
You can't fix everything at once. California's regulatory environment is too dense for that. But you can prioritize.
- Audit the "Exempt" List: Immediately check anyone making between $66k and $71k. If they aren't at $70,304, they are hourly employees in the eyes of the law. Period.
- Scrub Your Contracts: Remove any language that asks employees to "repay" training or bonuses. It’s likely unenforceable and could lead to a lawsuit.
- Update the "Right to Know" Paperwork: Get that standalone notice out by February 1. It’s a $500 fine per employee. If you have 100 employees, that’s a $50,000 mistake for a piece of paper you could have emailed.
- PAGA Self-Audit: Don't wait for a letter from a lawyer. Conduct a "good faith" audit of your meal and rest break records. Document it. This documentation is your 85% discount on future fines.
The vibe in 2026 is "transparency or bust." Whether it's telling people how much you're paying in a job ad (SB 642 now requires "good faith" ranges for all forms of pay, including bonuses) or disclosing your carbon footprint, the state wants the receipts. Stay nimble, keep your records for at least four years, and maybe keep a lawyer on speed dial. You're going to need them.
What to Watch Next
The Fast Food Council is expected to meet next month to discuss potential adjustments to the $20/hour industry-specific wage. If you’re in hospitality or food service, keep an eye on the local ordinances in West Hollywood and Los Angeles, as they are currently outpacing the state's minimums and could signal where the rest of California is headed by 2027.
Record Retention Check
Double-check your HRIS system. SB 513 now mandates that you keep detailed education and training records—including course duration and core competencies—for every employee. This is no longer "nice to have"; it's a mandatory part of the personnel file that must be produced if an employee asks for their records.