California compliance is easiest to manage as an operating rhythm, not a once-a-year project. The checklist below is designed for a leadership review. It is not a substitute for advice from qualified employment counsel about a specific situation.
1. Recheck wage rates and exempt classifications
California’s statewide minimum wage increased to $16.90 per hour on January 1, 2026. The state also notes that some cities, counties, and industries require higher rates. A payroll system showing the statewide rate does not confirm compliance if a local or industry rule applies.
- Map each work location to the applicable state, local, and industry wage.
- Verify that pay stubs display the correct wage rate.
- Review remote employees based on where they actually perform work.
- Set a calendar owner for midyear and year-end rate changes.
Do not treat salary as the entire exemption test
The 2026 minimum salary component for many California white-collar exemptions is $70,304 annually. Meeting that number does not make an employee exempt by itself. The employee must also satisfy the duties test for the applicable exemption. Review actual work, decision authority, and time allocation—not only the job description.
2. Confirm the new annual workplace rights notice
The Workplace Know Your Rights Act took effect in 2026. California employers must provide a stand-alone notice to employees annually and use the language normally used to communicate employment information when a state template is available in that language.
- Use the current Labor Commissioner template rather than an old saved copy.
- Document the date, delivery method, language, and employee population.
- Add the notice to onboarding for new hires.
- Keep existing workplace postings current; the annual notice does not replace them.
The state notice covers subjects including retaliation, workers’ compensation, immigration-related protections, organizing rights, emergency contacts, and certain law-enforcement interactions at work. Employers were also required to allow employees to name an emergency contact by March 30, 2026.
3. Audit paid sick leave administration
Most California employees who work for the same employer for at least 30 days within a year are covered by the state paid sick leave law. State guidance describes a minimum of five days or 40 hours, while local ordinances and employer policies may provide more.
- Compare written policy language with the accrual or frontload method configured in payroll.
- Confirm part-time, temporary, and per-diem populations are handled correctly.
- Review carryover, caps, permitted uses, and pay-stub balances.
- Train managers not to create attendance penalties or retaliation risk around protected use.
4. Validate pay data, records, and hiring systems
Private employers with 100 or more payroll employees—and private client employers with 100 or more labor-contractor employees—may have annual California pay data reporting duties. Reporting-year 2025 reports were due May 13, 2026. If your organization was in scope, retain the submission, source files, certification, and a record of corrections.
Hiring technology also belongs in the compliance review. California’s employment regulations address automated decision systems used in activities such as recruitment, screening, hiring, promotion, pay, benefits, and leave. Inventory tools that score, rank, recommend, filter, or monitor people—even when a vendor calls the feature “assistance” rather than AI.
A practical 30-day action plan
- Week 1 — inventory: list work locations, employee groups, policies, notices, reporting duties, and HR technology vendors.
- Week 2 — test: compare payroll and system behavior with written policy and current government guidance.
- Week 3 — correct: prioritize issues that affect pay, leave access, employee rights, or employment decisions.
- Week 4 — embed: assign owners, evidence, review dates, and escalation paths so the control continues.
A useful compliance review ends with named owners and proof—not a spreadsheet of unresolved questions.
Common questions
What is California’s minimum wage in 2026?
The statewide minimum wage is $16.90 per hour beginning January 1, 2026. Check city, county, and industry rules because a higher rate may apply.
What is the exempt salary threshold in 2026?
The minimum salary component for many white-collar exemptions is $70,304 annually. Salary and job title are not enough; the applicable duties test must also be satisfied.
Does the annual workplace rights notice replace workplace posters?
No. California describes the annual notice as an additional direct notice to employees. Employers must still maintain required workplace postings.