We are halfway through 2026, and for California employers, that is not just a calendar milestone. It is a compliance checkpoint. The employment law changes that took effect at the start of this year are now fully active, and some carried staggered deadlines that extended into February and March. If your handbook has not been reviewed since last January, or if it has never been reviewed at all, there is a real possibility that several of your written policies are already out of step with what the law now requires. Here are the ten policy areas most likely to need your attention right now.
1. Minimum Wage and Exempt Salary Thresholds
California’s statewide minimum wage increased to $16.90 per hour on January 1, 2026, raising the exempt salary minimum to $70,304 annually. Six months in, this is a good time to confirm your handbook reflects these current figures and that your payroll has been updated to match. Local jurisdictions may require even higher rates, and those need to be accounted for separately.
2. Paid Sick Leave
The permitted uses of paid sick leave were expanded in 2026 to include jury duty, responding to a subpoena, and absences related to being a victim of certain serious crimes. If your policy was written before these changes, your managers may have already denied leave this year for a purpose that was legally protected. Mid-year is the right time to correct that language before it becomes a pattern.
3. Crime Victim and Judicial Proceedings Leave
AB 406 significantly broadened victim leave protections, covering employees and their family members who need time to attend judicial proceedings related to 14 categories of qualifying crimes. This is a separate and expanded protection from paid sick leave and requires its own clear policy language. If your handbook does not address it, that gap is worth closing now.
4. Workplace Know Your Rights Notice (SB 294)
Since February 1, 2026, California employers have been required to distribute an annual written notice covering wage rights, anti-discrimination protections, and immigration-related constitutional rights. If that notice has not gone out yet, it is overdue. Your handbook also must not conflict with what the notice discloses. Noncompliance carries fines of up to $500 per employee.
5. Emergency Contact Designation
Also under SB 294, employers were required to give employees the opportunity to designate an emergency contact by March 30, 2026, to be notified if the employee is detained or arrested at work. If this step was missed during the busy start of the year, a mid-year review is the practical moment to address it and get it documented.
6. Equal Pay and Compensation Definitions (SB 642)
The definition of wages for equal pay purposes now covers all forms of compensation, including bonuses, equity awards, and vacation pay. The statute of limitations for pay discrimination claims was extended to three years, with recovery going back six years. Any policy addressing compensation or pay equity needs to be reviewed against this updated standard before the second half of the year brings new hiring decisions that could be scrutinized under it.
7. Personnel Records Access (SB 513)
Education and training records are now included in the definition of personnel records that employees have the right to inspect and request. If your handbook describes employee record access rights, that section needs to be updated to reflect this expanded definition. It is a small change with a clear compliance requirement.
8. Stay-or-Pay and Repayment Clauses (AB 692)
Employers can no longer require employees to repay training costs, relocation expenses, sign-on bonuses, or visa-related costs upon separation, for contracts executed after January 1, 2026. If you have been onboarding employees this year and your documents still include these clauses, those provisions are now unlawful. Penalties start at $5,000 per worker, making this one of the more urgent mid-year corrections to make.
9. AI and Automated Decision Systems
Civil Rights Department regulations effective October 2025 prohibit using AI tools in hiring or employment decisions if those systems produce discriminatory outcomes. Employers must retain related data for four years, and vendors of those tools may be treated as agents of the employer. If your business uses AI in the hiring process and your handbook does not address it, you are six months into the year with undisclosed exposure.
10. At-Will and Progressive Discipline Language
This is not a new requirement, but it remains one of the most commonly litigated handbook issues in California and one that mid-year reviews consistently surface. If your at-will disclaimer appears on page one and a detailed step-by-step discipline process appears later in the same document, those two statements may contradict each other in ways a court could interpret as an implied employment contract. Six months of employment decisions made under a contradictory policy is six months of exposure worth addressing before the year goes any further.
A mid-year review is not about starting over. It is about finding the gaps that have opened up since January, while you still have time to close them on your own terms. In California, the businesses that stay out of employment litigation are rarely the ones who got lucky. They are the ones who looked at their policies honestly and kept them current.
At The HR Law Firm, we guide California employers through exactly this kind of mid-year review. If you want to know where your handbook stands and what it would take to bring it current before the second half of 2026, we are ready to help. Schedule a strategy session with The HR Law Firm today.
The HR Law Firm — We protect California Small Business Owners from Hire to Fire. Schedule your legal strategy session today at www.thehrlawfirmca.com.
*As always, information is not legal advice and is not intended to be comprehensive and should not be relied upon. Readers should consult a lawyer for current up to date standards. Intended for CA audiences only. No Attorney-Client relationship is formed by the viewing or interaction of this information.
