Bill > AB692

This bill adds new protections for workers by prohibiting certain contract provisions in employment agreements starting January 1, 2026. Specifically, the bill makes it unlawful for employers to include contract terms that require workers to pay fees, penalties, or debts if their employment terminates, such as replacement hire fees, retraining costs, or immigration-related expenses. These types of contract provisions will be considered void and a restraint on a person's ability to work in their chosen profession. The bill allows for two exceptions: government-sponsored loan repayment programs and contracts for transferable educational credentials that meet specific fairness criteria, such as specifying repayment amounts upfront and not requiring repayment if the worker is terminated. Workers, prospective workers, or their representatives can bring civil actions against employers who violate these provisions, with potential penalties of $5,000 or actual damages, whichever is greater. The Labor Commissioner is empowered to enforce these provisions and will coordinate with the Attorney General, and violations will be considered acts of unfair competition under California law. The goal of the bill is to prevent employers from imposing financial barriers that might restrict a worker's ability to change jobs or pursue career opportunities.

Budget and Finance, Justice, Labor and Employment

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB692