California legislation · 2025-2026 Regular Session
California AB1697: Employment contracts: stay-or-pay provisions: contract date.
Status: Chaptered, September 30, 2026
What the bill says
An act to amend Section 16608 of the Business and Professions Code, and to amend Section 926 of the Labor Code, relating to employment, and declaring the urgency thereof, to take effect immediately. employment, and declaring the urgency thereof, to take effect immediately Employment contracts: stay-or-pay provisions: contract date. Existing law generally prohibits an employment contract from requiring a worker to pay certain penalties, fees, costs, or debts related to employment or education if the worker’s employment or work relationship terminates, as provided…
From the chaptered text, September 30, 2026:
An act to amend Section 16608 of the Business and Professions Code, and to amend Section 926 of the Labor Code, relating to employment, and declaring the urgency thereof, to take effect immediately. employment, and declaring the urgency thereof, to take effect immediately Employment contracts: stay-or-pay provisions: contract date. Existing law generally prohibits an employment contract from requiring a worker to pay certain penalties, fees, costs, or debts related to employment or education if the worker’s employment or work relationship terminates, as provided. Existing law provides that a contract that is unlawful under that prohibition is void and contrary to public policy as a restraint of engaging in a lawful profession, trade, or business. Existing law authorizes a worker, among other persons, to bring a civil action for specified civil penalties and relief for a violation of these provisions. Existing law applies these provisions to contracts entered into on or after January 1, 2026. This bill would instead apply those provisions to contracts entered into on or after January 1, 2027. The bill would establish exceptions to the above-described prohibition for contracts. Among these exceptions, the bill would except contracts for bonuses relating to specified recruitment and retention programs, and repayment obligations arising from advanced paid time off upon voluntary separation, as prescribed. The bill would further except certain affiliation …