California Employment News: California AB 692 Cuts Back “Stay or Pay” Contracts with Workers
Published: February 10, 2026
In this episode of California Employment News, we break down AB 692, a law that places significant limits on so called “stay or pay” provisions in contracts between employers and workers in California. Weintraub Tobin attorneys Shauna Correia, Chair of the Firm’s Labor and Employment group, and associate, John Slavik, cover:
- The types of provisions AB 692 now prohibits as of January 1, 2026
- Restrictions on bonus repayment requirements, early termination penalties, and liquidated damages clauses tied to separation from employment
- How the law covers “workers,” not just employees – The narrow categories of contracts that are excluded from the law
- Remedies for noncompliant contract terms
- Steps employers should take now to review and revise contract templates
Watch this episode on the Weintraub YouTube channel or listen to this podcast episode here.