Bill > AB692

This bill aims to protect workers from certain restrictive contract terms by making it unlawful, starting January 1, 2026, for employers to include provisions in employment contracts that require workers to pay fees or debts if their employment terminates. Specifically, the bill prohibits contracts that force workers to pay employers, training providers, or debt collectors for costs related to their employment, impose penalties for ending employment, or allow debt collection to resume upon termination. The bill provides some exceptions, such as for government loan repayment programs, tuition reimbursement for transferable credentials under specific conditions, and apprenticeship programs. Workers or their representatives can bring civil actions against employers who violate these provisions, with potential penalties of $5,000 per worker or actual damages, whichever is greater, plus attorney's fees and injunctive relief. The law defines key terms broadly, including "worker" to encompass employees and prospective employees, and "debt" to include various employment-related costs. By declaring such restrictive contracts void and against public policy, the bill seeks to prevent employers from financially trapping workers or creating significant barriers to changing jobs.

Budget and Finance, Justice, Labor and Employment

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