As we turn the page toward 2026, California employers, including home furnishings retailers, are once again preparing for a fresh round of compliance updates. While this year’s changes are not as sweeping as some in the past, they still require timely attention. If your store has kept up with handbook revisions and HR best practices over the last few years, you’ll likely find the 2026 updates more manageable.
Still, now is the perfect moment to review your employee handbook, refresh internal policies, and ensure your management and HR teams are trained and ready. Several laws have already taken effect as of October 2025, and more are scheduled to take effect on January 1.
Below is a breakdown of the most impactful changes, along with recommendations on what retailers should do next.
Minimum Wage & Exempt Salary Thresholds for 2026
Beginning January 1, 2026, California’s statewide minimum wage rises to $16.90/hour.
Keep in mind that many cities, such as Los Angeles, San Diego, and San Francisco, have higher local rates. Always check your specific jurisdiction.
New Exempt Salary Requirement
For most executive, administrative, and professional exempt employees, the annual minimum salary jumps to $70,304.
This does not include:
- Computer professionals
- Healthcare workers
- Fast-food employees under separate wage rules
If your business falls under one of those categories, expect higher thresholds.
SB 294: New Annual “Know Your Rights” Notice to Employees
Signed October 2025 and effective January 1, 2026, SB 294 requires employers to:
- Provide a stand-alone workers’ rights notice to each new hire
- Re-issue that notice annually to all employees
- Use the Labor Commissioner’s official template (to be released by January 1)
- Distribute the notice no later than February 1, 2026
New Emergency Contact Requirements
By March 30, 2026, employers must:
- Allow employees to designate an emergency contact
- Allow updates at any time
- Include a check box indicating whether the contact should be notified if the employee is arrested or detained during work hours or on the job site.
If an employee opts in, employers must notify the designated contact when such an event occurs.
Action Steps for Retailers
- Prepare to download the template notice and distribute it before February 1
- Update emergency contact forms to include new arrest/detainment notification options
- Train managers on protocol for notifying designated contacts
- Integrate the new forms into onboarding and current employee workflows
SB 513: Expanded Employee Access to Personnel Files
SB 513 expands the types of records employees may request to inspect. In addition to performance and grievance-related files, employees must now be allowed access to:
- Training provider names
- Training dates and duration
- Curriculum or core competencies
- Certifications or qualifications earned
This change reinforces transparency around employee development and job qualification documentation.
SB 642: Updated Job Posting Requirements & Equal Pay Act Changes
SB 642 tightens the definition of “pay scale” in job advertisements. Employers must now disclose a good-faith estimate of the wage range realistically expected for a posted position.
Equal Pay Act Enhancements
- Statute of limitations for pay discrimination claims increases to three years.
- Employees may recover up to six years of lost wages
- Clarifies that cases may reference compensation comparisons across all genders, not just “opposite sex.”
Judicial Proceeding & Jury Duty Leave Changes (AB 406)
Effective partially as of October 1, 2025, and fully on January 1, 2026, this bill expands the reasons employees may use paid sick leave or unpaid job-protected leave.
Employees may now use leave if:
- They or a family member is the victim of certain crimes
- They are attending judicial proceedings (e.g., sentencing, plea hearings, post-conviction hearings)
Other Key Changes
- Employees no longer must provide advance notice for jury duty
- If using paid sick leave or other protected leave, normal “reasonable notice unless infeasible” rules apply
- Employers should review and update sick leave policies immediately, as some provisions already took effect in October 2025
AB 2499: Expanded Paid Sick Leave for “Safe Time”
AB 2499 significantly broadens eligibility for safe-time leave.
What’s New:
- Employees may now take safe-time leave when family members are victims
- Coverage expands to include victims of additional crimes involving injury, threats, or the use of weapons
- Paid sick leave may be used to support family members through judicial or relocation processes
Limits for Employers With 25+ Employees
- Up to 12 weeks for qualifying act-of-violence victims
- 10 days if a family member is a non-fatal crime victim
- 5 days for school or childcare relocation
If a situation qualifies for FMLA or CFRA, all leaves run concurrently.
This is a substantial expansion of sick leave use cases; retailers will want to review their attendance, PTO, and scheduling procedures.
Additional 2026 Laws Retailers Should Watch
Frontier AI Transparency Act (SB 53)
This landmark law introduces the nation’s first transparency requirements for advanced AI systems.
While more relevant to tech developers, it includes whistleblower protections and broader implications for employers. Training and handbook updates are expected to follow.
Cal-WARN Updates (SB 617)
Retailers planning:
- Mass layoffs
- Location closures
- Major operational changes
Please note that SB 617 expands the notification requirements. Since WARN compliance is complex, consult an expert early when considering large-scale changes.
AB 692: “Stay or Pay” Contract Repayment Restrictions
Effective January 1, 2026, employers may not require workers to repay debts to the company upon termination of the employment relationship—unless the agreement falls under specific exemptions.
Allowed only with strict conditions:
- Agreements must be separate from the employment contract
- Employees must receive five business days to consult an attorney
- Repayment must be prorated, interest-free, and limited to voluntary quits or misconduct terminations
- Workers may defer payments until after the retention period
This change aims to protect employee mobility and reduce predatory repayment practices.
What Should Home Furnishings Retailers Do Now?
Here’s your 2026 compliance checklist:
✔ Update your employee handbook (again!)
✔ Download all required state templates as they become available
✔ Train management on new emergency-contact protocols
✔ Refresh job postings and pay scale disclosures
✔ Review paid sick leave and safe-time leave policies
✔ Ensure personnel file processes include training records
✔ Prepare for expanded leaves and reporting requirements
✔ Consult experts early for WARN-related events
While 2026 brings a new wave of legislation, most changes can be managed with early preparation. Staying ahead of compliance not only reduces risk—it strengthens workplace culture, supports employee trust, and keeps your retail operation running smoothly.
If you need support interpreting any of these laws or updating your policies, ACG Consulting Services and HFA are here to help.
A Valuable HFA Member Benefit
Don’t forget—HFA’s partnership with the American Consulting Group provides all members with free access to experienced HR consultants. This invaluable service is included in your membership and provides retailers with direct, expert guidance on compliance, policies, employee relations, wage and hour laws, and more. Whether you’re revising your handbook or navigating one of these new requirements, help is only a phone call or email away.
