Below are some of the most significant employment law updates for 2026.
Minimum Wage
The minimum wage for all California employees has again increased. For all employers, the minimum wage has increased to $16.90, regardless of the number of employees. This also means the minimum annual salary for certain exempt employees has increased to $70,304.00.
Vehicle Use Reimbursement & Related Vehicle Use Laws
The IRS standard mileage reimbursement rate increased to 72.5 cents per mile. A law was also passed that confirmed employers must reimburse employees for the use of their personal vehicles for work purposes.
In the construction industry, employees who use their own commercial truck, tractor, trailer, or other commercial vehicle are also entitled to reimbursement for the use, upkeep, and depreciation of said vehicle or trailer.
A California law also confirmed that mere ownership or use of a personal or commercial vehicle for work purposes does not make the person an independent contractor. The “ABC test” continues to apply to determine if a worker is an independent contractor or an employee, which requires the hiring entity to establish: A) the worker has freedom of control and direction; B) the worker performs work outside the usual course of the hiring entity’s business; and C) the worker is engaged in an independently established business. If all factors are not established, the worker is an employee and not an independent contractor.
Meal Period Waivers
A California Court held that prospective meal period waivers for shifts between 5 and 6 hours are enforceable, meaning an employee can, at the beginning of their employment, waive their right to a 30 minute off duty and uninterrupted meal period for shifts of less than 6 hours.
Discrimination Against The Majority
The U.S. Supreme Court held that an employee is not held to a higher evidentiary standard in cases in which they claim discrimination and are part of the majority. The same evidentiary standard applies regardless of whether the employee is a member of a minority group or in the majority.
Sexual Harassment Cases
A California Court upheld a harassment verdict in a case involving an employee who asked her employer to instruct employees to stop sharing a photo of a topless woman that looked like the complaining employee, even though the employee never saw the image. This case emphasizes that harassment can come in many different forms, and an employer’s failure to prevent harassing behavior in the workplace may form the basis for a harassment claim. The Court noted that California’s anti-harassment laws “protect victims from work environments poisoned by inappropriate conduct – whether sung, shouted, or whispered.”
In another case, a California Court revived a harassment case in which an employee had been subjected to sexual advances by a co-worker while off-duty and at home. While off-duty harassment claims usually cannot be brought against an employer, in this case, the employee reported the harassment to a Human Resources representative, who responded there was nothing that could be done and then made statements arguably mocking the employee. The employer also failed to take any steps to separate the employee or prevent further harassment. The Court held that the employer’s response to the harassment complaint provided the basis for the harassment claim to proceed.
Retaliation for Reporting Believed Violations of the Law
A California Court confirmed an employee may not be terminated for reporting believed violations of the law, even if it turns out the employee was wrong and no laws were violated. The key question is whether the employee reasonably believed the employee was reporting a violation of the law. Misunderstandings or incorrect interpretations of the law may be protected, so long as they are reasonable.
No Federal Taxes on Overtime
In California, overtime is generally owed after 8 hours in a day and/or after 40 hours in a week. Only those hours worked after 40 hours in a week qualify for the new no income tax on overtime compensation rules. For example, if an employee works 9 hours in one day, but only 39 hours that week, the one hour of overtime is subject to federal income taxes.
Enforcing Tip Theft
A law was passed authorizing the Labor Commissioner to investigate and take action on complaints that an employer took tips or gratuities belonging to an employee.
Stay or Pay – Trapping
A law was passed making it unlawful for an employer to include “stay or pay” terms in their employment contracts that require employees to assume or repay a debt to the employer when the relationship terminates, except in limited circumstances.
Contact the experienced employment attorneys at the Law Offices of Corren & Corren for any of your employment law needs.
