Employment contracts: stay-or-pay provisions: contract date.
Vote required
Two Thirds
Fiscal committee
No
Appropriation
No
Current location
Passed
Take action
Record your position on this measure.
Create an account to record your position, submit testimony, or contact your legislator.
Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill amends California law to extend restrictions on ‘stay-or-pay’ provisions in employment contracts. Currently, these provisions are prohibited for contracts entered into on or after January 1, 2026. This bill pushes that date to January 1, 2027, preventing employers from requiring workers to pay penalties, fees, or costs related to employment or education upon termination. The bill includes several exceptions, particularly regarding tuition repayment agreements and certain apprenticeship programs, to avoid unintended consequences.
Key provisions
- Extends the prohibition of ‘stay-or-pay’ provisions to contracts entered into on or after January 1, 2027, instead of January 1, 2026.
- Specifically prohibits requiring workers to pay for debts related to employment, education, or consumer financial products upon termination.
- Includes exceptions for loan repayment assistance programs, certain tuition repayment agreements, apprenticeship programs, and discretionary bonuses.
- Defines key terms such as ‘debt,’ ‘employer,’ and ‘penalty’ for clarity.
- Allows workers to bring civil actions for violations of the provisions.
- Establishes a potential penalty of $5,000 per worker for violations.
- Clarifies that the bill does not apply to residential property leases or financing contracts.
Who is affected
- Employees
- Employers
- Training Providers
- Debt Collectors
Bill text
Read the latest version inline or switch to a previous version.
Text extraction is in progress. View the official source.
Sponsors
Official sponsors from legislative records.
1 on record
Primary sponsor
Arguments
Reasons offered for and against this legislation.
Arguments in favor
No arguments in favor have been submitted.
Submit yoursArguments opposed
No arguments opposed have been submitted.
Submit yours