Bill > AB692

This bill addresses employment contracts that impose financial burdens on workers when they leave a job, specifically making it unlawful for employers to include certain contract terms starting January 1, 2026. The legislation prohibits employment contracts that require workers to pay employers, training providers, or debt collectors for a debt if their employment ends, or that impose penalties, fees, or costs when a worker's employment terminates. The bill provides several exceptions, such as for government loan repayment programs, tuition reimbursement contracts for transferable credentials, and apprenticeship programs, with specific conditions that must be met. Workers who are subjected to prohibited contract terms can bring civil actions on their own behalf or on behalf of similarly situated workers, with potential damages of $5,000 per worker or actual damages, whichever is greater, plus attorney's fees and costs. The law defines various terms broadly, including "worker" to encompass employees and prospective employees, and "debt" to include a wide range of financial obligations. By declaring such contracts void and contrary to public policy, the bill aims to protect workers from restrictive employment agreements that could limit their 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