CA Governor Signs Various Bills into Law Impacting Employers, including Churches

California Governor Gavin Newsom recently signed several bills into law and vetoed others that affect labor and employment law, including those affecting churches with employees. These bills take effect on January 1, 2026, unless stated otherwise. Understanding the impact of new legislation on your church or religious organization is crucial to ensuring legal compliance. Contact the California Center for Nonprofit Law to answer your questions about how these bills should affect your organization’s policies, procedures, and practices.

AB 692

This law bans employment contracts with so-called “stay or pay” provisions. These provisions require an employee to repay an employer, training provider, or other creditors for a debt if the worker’s employment ends. For instance, the debt could be related to training expenses. However, the new law does not apply to retention bonuses and certain loans if the employee satisfies specific conditions.

SB 19

SB 19 adds Section 422.3 to the California Penal Code. This section establishes criminal offense for individuals who make credible threats of mass violence against persons “at a daycare, school, university, workplace, house of worship, or medical facility.” The purpose of the law is to help prosecutors better address growing threats of violence, especially in the workplace.

SB 294

This law is known as the “Workplace Know Rights Act.” It requires employers to provide their employees with stand-alone written notices no later than February 1, 2026, and annually thereafter, addressing certain rights, including the following:

• Independent contractor misclassification protections;
• Heat illness prevention’
• Workers’ compensation;
• Paid sick days;
• Protections against unfair immigration-related practices;
• The right to notice of federal immigration inspections;
• The right to organize a union in the workplace; and
• Constitutional rights when interacting with law enforcement at the workplace.

The California Labor Commissioner must develop a template notice for employers to communicate this information to their employees and post it online no later than January 1, 2026. Finally, the law requires employers to notify the employee’s emergency contact if law enforcement officials arrest or detain the employee while at work.

SB 464

SB 464 addresses employers’ pay data reporting to the California Civil Rights Department. As of May 2027, public employers with 100 or more employees (with some exceptions) must submit an annual pay data report to the Department or face civil penalties. The pay data that employers must store separately from other employee records includes pay equity data, such as demographic information on race, ethnicity, and gender.

SB 513

This law requires employers to maintain certain information in personnel records related to employee education or training. The required information includes the employee’s name, the training provider’s name, the training date and duration, the core competencies or skills addressed, and the resulting certification or qualification.

SB 590

SB 590 expands eligibility for benefits under the state’s paid family leave program. Workers may now take time off under the family leave program to care for a seriously ill designated person. These “designated persons” include “any care recipient related by blood or whose association with the individual is the equivalent of a family relationship.”

SB 642

This law amends California Labor Code Section 1197.5 to set the statute of limitations for civil actions at three years from the date of the last discriminatory pay act. SB 642 also increases the look-back period for relief to ten years. The law defines “pay scale” as “the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.” Additionally, the law defines “wages” to include stock options and other forms of compensation not previously specified.

SB 809

Under this new law, employers must reimburse employees for the use, upkeep, and depreciation of a truck, tractor, trailer, or other commercial vehicle.

Reimbursement of work expenses. The law requires an employer to reimburse an employee for the use, upkeep, and depreciation of a truck, tractor, trailer, or other commercial vehicle the employee owns and uses for work purposes.

Frequently Asked Questions (FAQ)

Do these new bills apply to churches and religious organizations with only a few employees?

Yes. While some bills, like SB 464’s pay data reporting, apply only to larger employers, many of the new requirements—such as SB 294’s employee rights notice and SB 590’s expanded family leave eligibility—apply regardless of organization size. Churches and religious nonprofits with even a small staff should review these laws to determine which ones affect their operations.

What steps should faith-based employers take before January 1, 2026?

Churches and religious organizations should begin by reviewing employment contracts, personnel policies, and training documentation to ensure compliance with the new laws. They should also prepare to distribute the required employee rights notices and update internal procedures for handling law enforcement interactions, leave requests, and reimbursement claims. Experienced charitable organization attorneys can help prioritize and implement these changes effectively.

How do these laws affect volunteer workers or unpaid staff?

Most of the new laws target paid employment relationships. However, if a volunteer receives any form of compensation or is misclassified as an unpaid worker while performing duties that are typically paid staff roles, the organization could face legal exposure. It’s important for churches to clearly define roles and consult legal guidance to avoid misclassification issues.

Stay Compliant Amid Changing Employment Laws

With California’s latest wave of labor and employment bills taking effect in 2026, churches and religious organizations with employees must take proactive steps to ensure compliance. From new notice requirements and expanded leave benefits to pay data reporting and reimbursement obligations, these bills carry significant implications for your operations and workforce policies. The California Center for Nonprofit Law is here to help you interpret these changes and implement them effectively. Contact us at 949-892-1221, email info@NPOlawyers.com, or reach out online to safeguard your organization and support your mission.