California employers in the health care industry should prepare for increased scrutiny of executive compensation as a new statewide initiative heads toward the November 3, 2026, General Election ballot.

The California Secretary of State announced that Initiative 1985, formally titled “Limits Compensation for Health Care Executives, Managers, and Administrators. Initiative Statute,” became eligible for the ballot on May 12, 2026.

The measure, known as the Health Care Executive Compensation Act of 2026, would prohibit certain hospitals and medical entities from paying executives, managers, and administrators more than $450,000 in total annual compensation or severance payments. The cap would increase annually by the lesser of 3.5 percent or the applicable Consumer Price Index adjustment. The initiative text defines “total annual compensation” broadly to include salary, wages, paid time off, bonuses, incentive payments, lump-sum cash payments, stock options or awards, housing, transportation, travel, meals, entertainment, social club memberships, severance, insurance payments, and other benefits, subject to limited exclusions.

For health care employers, the measure’s scope is significant. It would apply to covered hospitals and medical entities, including general acute care hospitals, acute psychiatric hospitals, parts of integrated health care delivery systems, and physician groups. It would also reach both nonprofit and for-profit entities, including foreign corporations operating covered facilities in California. The initiative excludes certain facilities, including those operated or licensed by the U.S. Department of Veterans Affairs and public hospitals as defined in the measure, although health care district hospitals are treated separately and may be covered.

The proposal is not limited to employees. It would apply regardless of whether the individual exercising executive, managerial, or administrative authority is or was employed by the covered entity, including where the person provides services under a contract or subcontract. This provision may affect management services agreements, consulting arrangements, interim executive placements, and affiliated-entity staffing structures.

The measure also provides that the cap would not apply to medical or health care professionals whose primary duties involve medical services, research, direct patient care, or other nonmanagerial, nonexecutive, and nonadministrative services.

If approved, the compensation limits would become operative January 1 of the calendar year following the election. The measure also states that it would apply notwithstanding contracts entered before the effective date and that any scheme or artifice designed to avoid the limits would constitute a violation. Employers may wish to review existing executive agreements, deferred compensation arrangements, severance provisions, incentive compensation plans, retention bonuses, and benefit programs well before the election.

The initiative would also impose annual reporting obligations. Covered entities would have to report to the Attorney General information about individuals receiving compensation or severance exceeding the limit, including detailed breakdowns of wage and non-wage compensation. For nonprofit entities, board approval of the annual report would be required before submission, and the report would need to be attested to under penalty of perjury.

Jackson Lewis will continue to monitor this ballot measure. If you have questions about the ballot measure or related issues, contact a Jackson Lewis attorney to discuss.

California Governor Gavin Newsom has issued Executive Order N-6-26, a “first-in-the-nation” order aimed at preparing workers, businesses, and communities for potential workforce disruption associated with artificial intelligence. While the order does not create immediate new compliance obligations for employers, it is an important development for California businesses because it previews where state policy, regulation, and enforcement attention may be headed.

The order directs state agencies to study AI’s impact on California’s labor market, identify early warning signs of workforce disruption, and develop policy recommendations addressing worker displacement, training, and economic transition. The Governor’s announcement emphasizes that California intends to prepare for AI-driven disruption while also helping workers and small businesses benefit from AI-related productivity gains.

One of the most significant provisions for employers is the directive that, within 180 days,  the Labor and Workforce Development Agency (LWDA) review and recommend updates to the California Worker Adjustment and Retraining Notification Act (Cal-WARN). The stated goal is to ensure Cal-WARN can provide early warning data and remain responsive to emerging industry trends. Although the order does not amend Cal-WARN, employers contemplating reductions in force, closures, restructurings, or job redesign related to AI or automation should monitor this process closely. Notably, a bill is already pending in the California legislature that would require notice similar to Cal-WARN for employees displaced from their jobs by AI.

The order also reflects the state’s interest in how employers use AI in hiring and workforce decisions. The Employment Development Department (EDD) is directed to incorporate business feedback about the role of technology adoption in hiring and workforce decisions into state labor market reporting. EDD must also launch a dashboard that shows AI’s impact on employment across sectors, using Unemployment Insurance data. These efforts may increase public and regulatory visibility into industries where AI adoption coincides with layoffs, reduced hiring, or occupational displacement.

At a practical level, California employers should consider taking inventory of workplace AI tools, documenting the business reasons for their use, assessing potential disparate impact, and maintaining appropriate human oversight. Employers planning workforce changes tied to automation should also evaluate WARN obligations, employee communications, retraining options, and potential impacts on protected groups.

Executive Order N-6-26 is best understood as a policy roadmap rather than an immediate mandate. Employers that proactively assess their AI practices now will be better positioned as California’s regulatory framework continues to develop.

If you have questions about this executive order or related issues, contact a Jackson Lewis attorney to discuss.

The Los Angeles City Council has approved amendments that would slow the implementation schedule for the City’s Hotel Worker Minimum Wage Ordinance and related airport worker wage provisions. The move revises the framework adopted in 2025, which had been set to increase covered hotel and airport worker wages to $30 per hour by 2028. The Council approved the delay on May 26, 2026, as proponents of a business-tax repeal ballot measure withdrew that initiative. The amendments to the ordinance take effect June 29, 2026.

The amendment revises the phased minimum wage as follows:

Implementation DateRate
July 1, 2026$25.00
July 1, 2027$25.50
July 1, 2028$28.50
July 1, 2029$29.00
January 1, 2030$30.00
July 1, 2030, and annually afterAdjusted per CPI-W

The amendments also revise health benefit obligations. For hotel employers, the ordinance provides for a health benefit payment of $4.25 per hour beginning July 1, 2026, increasing to $6.00 per hour beginning July 1, 2027. Beginning July 1, 2028, the hotel worker health benefit obligation would be tied to the health benefit payment applicable to airport workers.

Employers that do not provide the required health benefits must pay the equivalent amount as additional hourly wages.

For hotel employers, the practical effect is significant but more gradual than the prior schedule. Industry reporting describes the Council’s action as delaying the $30-per-hour threshold from 2028 to 2030, while still requiring a $25-per-hour minimum wage in July 2026 and incremental increases thereafter.

If you have questions about these amendments or related issues, contact a Jackson Lewis attorney to discuss.

As California heats up, employers should revisit Cal/OSHA’s heat illness prevention requirements, which continue to apply to both outdoor and indoor workplaces in 2026. Federal OSHA, by comparison, still has not finalized a nationwide heat-specific standard. Read more here: Beat the Heat: Reminders About California Heat Injury and Illness Mandates

California employers should take note that the Cal/OSHA workplace posting titled “Safety and Health Protection on the Job” was updated in April 2026. The poster summarizes key workplace safety and health obligations under California law and must be displayed in a conspicuous location where employee notices are customarily posted. Failure to display the notice may result in penalties.

The posting reminds employers of their obligation to provide safe and healthful workplaces, comply with applicable Cal/OSHA standards, and maintain a written and effective Injury and Illness Prevention Program (IIPP). It also emphasizes that employees and their authorized representatives must have access to the IIPP. Employers should confirm their IIPP is current, implemented, and supported by documentation, including records demonstrating that employees have been trained on hazards specific to their job assignments.

The poster also highlights several critical employer obligations. Employers must correct known hazardous conditions, must not allow employees to perform work that violates Cal/OSHA standards, and must not permit untrained employees to perform hazardous work. In addition, employers must report any work-related serious injury, serious illness, or fatality to the nearest Cal/OSHA district office immediately, but no later than eight hours.

Employers using hazardous substances should also review their hazard communication practices. The posting explains that covered employers must provide employees with information about hazardous chemicals, maintain access to safety data sheets, and ensure proper training on the safe use of those substances. Employees also have the right to access certain exposure and medical records.

As a practical next step, California employers should confirm that the updated poster is displayed in all required locations, including worksites where notices are typically posted. Employers may also want to use this update as a prompt to review their IIPP, safety training records, hazard communication program, reporting procedures, and internal processes for responding to Cal/OSHA inspections, citations, and employee safety complaints.

If you have questions about this posting requirement or related issues contact a Jackson Lewis attorney to discuss.

As summer approaches, California employers should remember that it’s time to review their workplace violence prevention plans and conduct their annual workplace violence prevention training.

As a reminder, Labor Code section 6401.9 requires employers to review the effectiveness of their workplace violence prevention plans at least annually, after a workplace violence incident, and whenever a deficiency becomes apparent. The law went into effect on July 1, 2024, so for many employers, the annual compliance deadline is right around the corner.

Employers must, at a minimum, review the violent incident log, the procedures for obtaining the active involvement of employees, and the effectiveness of the plan. To evaluate effectiveness, employers should confirm that the plan is still correct: the person responsible for the plan is correctly identified, reporting channels remain clear, emergency and incident response procedures still work in practice, and that investigation and communication procedures and requirements are clear and being followed. Employers should also review incident investigations from the prior year to see what, if anything, could be learned.

The law requires not only an annual review, but also annual training. Employers must conduct training on all the required topics in the law, including workplace violence hazards specific to the employees’ jobs, strategies to avoid physical harm, and how to report workplace violence to the employer or law enforcement.

On April 23, 2026, Cal/OSHA posted a revised draft for a workplace violence prevention regulation that would broaden the scope of the law to include additional employers and add definitions, plan requirements, post-incident procedures, recordkeeping, and training. Because the proposal is still in draft form, employers’ current compliance obligations remain grounded in Labor Code section 6401.9.

Employers that have not yet calendared annual workplace violence prevention plan review and retraining dates may want to do so now, especially if their original rollout occurred in spring or early summer 2024. A short refresher now may help avoid larger compliance issues later.

California’s Assembly Bill (AB) 692 took effect on January 1, 2026, impacting repayment and “stay-or-pay” agreements.  For a summary of the limitations and requirements stemming from this law, please see our earlier blog post.  California employers should already be evaluating offer letters, bonus agreements, training repayment provisions, tuition arrangements, and other documents that impose repayment obligations or financial consequences tied to separation from employment.

As enacted, the new California law makes it unlawful to include in an employment contract, or require a worker to sign as a condition of employment or a work relationship, a term that does any of three things upon the end of employment with a specific employer: requires payment of a debt, authorizes collection of a debt or the end of forbearance on a debt, or imposes a penalty, fee, or cost, unless the contract satisfies certain allowances of repayment under the law.

The statute defines “debt” broadly to include money, personal property, or their equivalent allegedly due for employment-related costs, education-related costs, or consumer financial products or services, whether certain or contingent and whether voluntarily incurred.

It likewise defines “penalty, fee, or cost” broadly, expressly identifying items such as replacement-hire fees, retraining fees, quit fees, immigration- or visa-related reimbursement, liquidated damages, lost goodwill, and lost profits.

At the same time, AB 692 is not a blanket prohibition on every repayment-related arrangement. The statute contains several express exceptions, including for agreements under government loan repayment or loan forgiveness programs; certain tuition repayment arrangements for a transferable credential if statutory conditions are met; agreements related to approved apprenticeship programs; certain separate agreements covering discretionary or unearned monetary payments at the outset of employment if the statutory requirements are satisfied; and contracts related to residential property financing or purchase. Whether an existing form fits within one of these exceptions will require a careful, provision-by-provision review.

California’s Law Is Part of a National Trend

California’s AB 692 is part of a multi-jurisdictional broader trend. New York enacted the “Trapped at Work Act” in late 2025 to prohibit certain “employment promissory notes” and similar provisions, and Washington recently amended its noncompetition statute in a way that also bears on repayment arrangements by carving out only a narrow category of written agreements to repay out-of-pocket educational expenses. Although these laws are not identical, together they underscore growing legislative attention to contract provisions that may discourage employees from leaving employment.

Takeaway

Employers should review their employment agreements, offer letters, sign-on bonus documentation, retention arrangements, training repayment agreements, tuition and credential programs, relocation repayment terms, and immigration-cost provisions.

Many cities across California have adopted higher minimum wage and benefit requirements for hotel employers. The City of Los Angeles raised its wages for hotel and airport workers last year in advance of the Olympics. Many of these local ordinances increase in July.

As such, hotel employers should verify they are ready for the requirements as they prepare for summer.

Some ordinances, like those in Los Angeles, Oakland, and Santa Monica, require employers to provide health benefits or pay a higher minimum wage. Employers must ensure the benefits meet the required value; if they fall short, the employer must pay the difference.

Here is a summary of the status of hotel minimum wage in the Golden State:

CityMinimum Wage with BenefitsMinimum Wage without Benefits
Long Beach
Effective July 1, 2026 		Not Applicable$26.50
Los Angeles
Effective July 1, 2026		$25.00$33.15
San Diego Effective July 1, 2026Not Applicable$19.00
Santa Monica* Effective July 1, 2026$25.00$33.15
Oakland Effective January 1, 2026$18.85$25.14
West Hollywood Effective July 1, 2026Not Applicable$20.25

*Santa Monica’s ordinance generally tracks the wage requirements under the City of Los Angeles ordinance.

Many of the local ordinances have posting requirements similar to the state minimum wage posting. Employers should review each city’s current minimum wage webpage for the latest posting forms and notices.

If you have questions regarding compliance with these local minimum wage ordinances, contact a Jackson Lewis attorney to discuss.

Costa Mesa has passed an ordinance that regulates staffing for grocery and drug retailers that operate self-checkout stations. The measure requires employee staffing and supervision of self-checkout, restricts certain transactions at self-checkout, and requires customer signage. It is similar to an ordinance passed by the City of Long Beach last year.

Costa Mesa’s ordinance takes effect April 20, 2026.

Covered Businesses

The ordinance applies to certain food and drug retail establishments in Costa Mesa. It applies to “Drug Retail Establishments,” which are defined as a retail store that sells a variety of prescription and non-prescription medicines and miscellaneous items. It also applies to “Food Retail Establishments,” which is defined as a retail store that is either:

  • Over 15,000 square feet and sells primarily household foodstuffs for off-site consumption, or
  • Over 85,000 square feet with ten percent of the sales floor area dedicated to the sale of non-taxable merchandise, including foodstuffs.

Employers should review whether their store format, square footage, and product mix fall within the ordinance’s definitions of covered establishments.

 Requirements

If a covered store offers self-checkout, the ordinance requires the store to:

  • Maintain at least one staffed, non-self-service checkout lane whenever self-checkout is available.
  • Assign at least one employee to supervise self-checkout at all times and maintain a staffing ratio of at least one employee for every three self-checkout stations when operating two or more self-checkout stations.
  • Ensure the supervising employee does not have other duties that interfere with direct visual monitoring.
  • Post signage stating that self-checkout should be limited to 15 items.
  • Prohibit self-checkout purchases of items requiring identification, such as alcohol and tobacco, and items subject to specified theft-deterrent measures.
  • Post customer-facing notice about the ordinance and provide a physical and/or email address for reporting violations.
  • Self-checkout stations must be located so they can be observed by employees and local law enforcement.

If you have questions about the Costa Mesa ordinance or related issues, contact a Jackson Lewis attorney to discuss.

As the situation in the Middle East progresses, and National Guard and Reservists are called to serve, employers will likely have employees who require leave of absence to fulfill their obligations to the military. While under federal law, the Uniformed Services Employment and Reemployment Rights Act (USERRA) guarantees the rights of military service members to take a leave of absence, California has several laws that also protect those serving in the military.

Military Leave

Under California law, employees who are members of the reserve corps of the armed forces of the U.S., the National Guard, or the Naval Militia shall be entitled to a temporary leave of absence without pay while engaged in military duty for a period not to exceed 17 calendar days annually. This leave is typically used for military training or similar.

There are also anti-discrimination laws that provide job protection for members of the military when they are performing ordered military duty.

Military Spouse Leave

Employers with 25 or more employees are required to provide up to 10 days of unpaid leave to spouses of military members while the employee’s military spouse is on leave from deployment during a period of military conflict.

California’s Family Rights Act (CFRA)

Under the CFRA, employers are required to provide up to 12 weeks of unpaid job-protected leave during a 12-month period, due to a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States. The provided leave period can be utilized for diverse occasions and purposes, from spending time with the military spouse before deployment, managing household affairs, or assisting children during the military spouse’s deployment.

To complement this leave, covered employees may seek state benefits under California’s paid family leave.

San Francisco Military Leave Pay Protection Act

Certain employers with employees in San Francisco must provide paid leave to employees taking leave of military duty. Under the law, employers with 100 or more employees worldwide must comply with the ordinance for their covered San Francisco employees. The ordinance covers employees who work within the geographic boundaries of San Francisco if they are members of the reserve corps of the United States Armed Forces, the National Guard, or other uniformed service organizations of the U.S.

Under the ordinance, a covered employer must pay supplemental compensation to the covered employee when the employee is on leave for military duty, up to 30 calendar days in a calendar year. The supplemental compensation is the difference between the employee’s gross military pay and the amount of gross pay the employee would have received from the employer based on the employee’s regular work schedule.

If you have questions about leave for military members or related issues, contact a Jackson Lewis attorney to discuss.