California's 2026 employment law package: wage thresholds, pay equity, AI, layoffs

What changed Governor Newsom signed a large 2025 legislative package taking effect January 1, 2026. The headline areas for HR: - Updated state minimum wage and correspondingly higher exempt salary thresholds, plus industry-specific rates. - Expanded pay equity and pay data obligations. - New rules addressing the use of artificial intelligence and automated decision systems in employment decisions. - Changes affecting layoffs and notice obligations. - Provisions affecting worker mobility and restrictive agreements. What HR needs to do - Re-run exempt classification against the new salary floor immediately; California exempt status is a salary-and-duties test and the floor moved. - Confirm your pay data reporting owner and calendar the filing deadline. - Inventory AI tools used on California applicants and employees and align notices with the Illinois and Colorado work you are already doing. - Review separation and reduction-in-force templates against the updated notice requirements. - Scrub offer letters and agreements for any provision that limits post-employment mobility. Reminder California local ordinances stack on top of state law. Check every city and county where employees actually work.