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New State Employment Laws for 2026 Tighten Pay Rules, Curb Repayment Clauses, and Expand Leave

Employers now confront mandatory California pay‑data penalties alongside Illinois AI and transparency rules with early‑year compliance dates.

Overview

  • California’s SB 464 is in effect with separate storage of demographic data, mandatory civil penalties for missed or defective pay‑data reports, and a May 13, 2026 filing deadline, with a switch to 23 SOC job categories starting in the 2027 cycle.
  • California’s SB 642 broadens equal‑pay and transparency rules by defining pay scales as good‑faith hire ranges and expanding “wages” to total compensation, and the state minimum wage rose to $16.90 with the exempt salary floor now $70,304.
  • California’s AB 692 bans many “stay‑or‑pay” repayment provisions in employment contracts entered on or after January 1, 2026, and creates a private right of action with minimum $5,000 per‑worker recovery.
  • Illinois enacted six measures effective January 1, 2026, including AI use limits and notice requirements under the Human Rights Act, new consideration rules for confidentiality in settlement agreements, revised IDHR procedures, nursing‑mother protections, VESSA evidence access, and expanded blood and organ donation leave to part‑time employees.
  • Paid‑leave programs expanded in 2026, with benefits now available in Delaware and Minnesota, Maine benefits beginning May 1, 2026, and Colorado adding neonatal intensive care leave, and California employers face new annual worker‑rights notices by February 1 and emergency‑contact designations by March 30 under SB 294.