The New California Rules Every Employer Should Know Before Relocating Staff

If your company is moving people into California—whether to Los Angeles, San Francisco, San Diego, or Sacramento—the rules just changed, again. A wave of new state laws took effect in 2026, and they touch nearly every part of how you structure and fund an employee relocation. Here's what HR leaders and business owners need to know.

AB 692: The End of Traditional Relocation Payback Agreements

For years, most corporate relocation packages came with a clawback clause: if an employee left within one or two years, they paid back part of the moving costs. California's AB 692 effectively ended that practice. Effective January 1, 2026, the law bans "stay-or-pay" agreements—meaning you can no longer require employees to repay relocation costs, signing bonuses, or training expenses if they resign.

Limited exceptions exist. Tuition reimbursement can still carry a payback clause if participation was voluntary and the agreement is prorated. Signing bonuses may survive under a separate written agreement, but only with a maximum two-year horizon and no repayment required if the employer terminates the employee without cause.

The penalty for violating AB 692? $5,000 per incident, plus attorney fees.

Pro Tip: Review every existing relocation agreement for California employees. Any active clawback provision tied to resignation may now expose your company to liability.

Pay Transparency and Pay Equity: New Obligations You Can't Ignore

California's SB 1162 requires salary ranges in all job postings for employers with 15 or more workers. But recent updates give the rule real teeth: failing to include a pay range now triggers mandatory civil penalties rather than discretionary enforcement.

SB 642, the Pay Equity Enforcement Act, effective January 1, 2026, expanded California's equal pay laws to cover bonuses, stock options, and other non-salary compensation. It also extended the lookback period for pay equity claims to six years. For companies relocating staff from markets with different compensation norms, that mismatch can surface as a legal risk faster than most HR teams expect.

The Cal/WARN Act Update: More Employers Are Now Covered

Updated by SB 617 effective January 1, 2026, California's version of the federal WARN Act now applies to employers with just 75 employees—well below the federal threshold of 100. If a relocation or office consolidation moves more than 50 employees 100 or more miles, the law requires 60 days' advance written notice.

Pro Tip: If you're consolidating Bay Area, Sacramento, or Southern California offices as part of a larger move, confirm whether the 75-employee threshold applies before you announce anything internally.

The Wage and Cost Baseline Has Shifted

California's statewide minimum wage reached $16.90 per hour on January 1, 2026. The exempt salary threshold—the minimum you must pay a salaried worker to qualify them as overtime-exempt—now stands at $70,304 annually. Several cities go higher: Los Angeles is above $17.27, and San Diego continues its climb toward $20.00 for hospitality workers.

Add housing costs that still dwarf national averages—San Francisco's median sale price exceeds $1.5 million, and San Diego's hovers around $932,000—and the total cost of bringing talent into California has reached a point where careful planning isn't optional. It's the difference between a relocation that works and one that becomes an HR headache.

Move Smarter, Not Just Faster

California's regulatory environment isn't going anywhere. But companies that plan for it early move their people with less disruption and less legal exposure. Structuring compliant packages, understanding what can and can't be recouped under AB 692, and getting ahead of pay transparency and WARN Act obligations before day one makes all the difference.

Chipman's employee relocation team has managed corporate moves into and out of California for over 85 years. From San Diego to San Francisco and Sacramento to Los Angeles, we understand both the logistics and the local landscape. Ready to build a relocation program built for today's rules? Contact Chipman for a consultation today.