Summary of July 2026 Labor Law Updates for San Diego, California
July brought several important developments in California labor law, including new wage requirements for health care workers, significant appellate rulings involving arbitration and remote employees, and federal enforcement actions involving California employers. This July 2026 employment update from HKM Employment Attorneys highlights developments that employees, HR professionals, and compliance leaders should know about.
At-a-Glance Overview
- California health care minimum wages increased for several categories of covered facilities on July 1.
- New Public Employment Relations Board regulations implementing collective bargaining rights for California legislative employees took effect.
- A California appellate court reinforced limits on overly broad, one-sided employment arbitration agreements.
- Another appellate ruling held that sexual-orientation harassment may qualify as sexual harassment for purposes of the federal Ending Forced Arbitration Act.
- The U.S. Department of Labor recovered more than $500,000 for six San Diego deli workers.
- The California Supreme Court clarified limits on leave cashouts used to calculate certain public employee pensions.
- Sutter Roseville Medical Center agreed to pay $200,000 to resolve an EEOC disability discrimination investigation.
- A California appellate court addressed when California employment protections apply to remote employees working outside the state.
- The NLRB issued a California decision addressing an employer’s duty to bargain over the effects of creating new non-bargaining-unit positions.
July 2026 produced several consequential developments for California employees and employers, particularly in arbitration, disability accommodation, remote work, wages, and public-sector labor relations. Anyone with questions about California labor law, workplace rights, discrimination, unpaid wages, or other employment concerns can contact HKM Employment Attorneys to discuss their legal options.
California Health Care Worker Minimum Wages Increase — Wage and Hour
Date: July 1, 2026
Summary:
California’s health care worker minimum wage law reached another scheduled step in its phased implementation on July 1. Rates vary according to the type and size of the covered health care facility. For example, covered employees at certain large health care systems moved from $24 to $25 per hour, while workers at certain other covered facilities saw increases to $22, $23, or $19.28 per hour depending on the statutory category.
Implications:
California health care employers should confirm which statutory category applies to each facility and ensure payroll systems reflect the correct rate. Employees should also remember that increases in the minimum wage can affect other wage calculations, including whether certain workers satisfy salary thresholds tied to minimum wage requirements.
Legislature Employer-Employee Relations Act Regulations Take Effect — Public-Sector Labor Relations
Date: July 1, 2026
Summary:
New regulations from the California Public Employment Relations Board took effect to implement the Legislature Employer-Employee Relations Act, or LEERA. The regulations establish and clarify PERB procedures for administering its jurisdiction under the law, which governs labor relations involving employees of the California Legislature.
Implications:
The rules provide a regulatory framework for collective bargaining and labor disputes involving covered legislative employees. For California public-sector workers and labor organizations, the development expands the body of PERB rules governing organizing, representation, bargaining, and unfair-practice proceedings.
Phan v. Knight Sacramento SU Inc. — Employment Arbitration
Date: July 2, 2026
Summary:
In Phan v. Knight Sacramento SU Inc., Case No. C103401, the California Court of Appeal certified for publication a decision affirming the denial of an employer’s motion to compel arbitration in a wage-and-hour class action. The arbitration agreements required the employee to arbitrate not merely employment disputes but essentially any present or future claim arising from any interaction or relationship with the employer and numerous third-party beneficiaries.
The court concluded that the agreements were substantively unconscionable because of their excessive breadth and lack of mutuality. Among other concerns, the employee was required to arbitrate claims against numerous third parties without receiving an equivalent right to require those third parties to arbitrate claims against her. Because the problematic provisions permeated the agreements, the court declined to preserve them through severance.
Implications:
The ruling is an important reminder that California courts continue to scrutinize employment arbitration agreements for fairness. Employers should avoid drafting provisions that extend substantially beyond employment-related disputes or create arbitration obligations that disproportionately burden employees. Workers facing mandatory arbitration agreements may have grounds to challenge agreements containing unusually broad or one-sided provisions.
Decloedt v. Radnet Management, Inc. — Sexual Harassment and Arbitration
Date: July 7, 2026
Summary:
The California Court of Appeal certified Decloedt v. Radnet Management, Inc., Case No. B343963, for publication and held that harassment based on sexual orientation can constitute sexual harassment under California’s Fair Employment and Housing Act.
The employee alleged repeated anti-gay remarks and other hostile conduct by a coworker. The employer sought to compel arbitration, but the court concluded that the allegations sufficiently stated a sexual-harassment claim to trigger the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. That law allows workers bringing qualifying sexual harassment or sexual assault disputes to reject predispute arbitration agreements.
Implications:
The decision is significant for California workplace rights because it confirms that the federal arbitration exemption is not restricted to harassment involving sexual advances or explicitly sexual conduct. Employers should recognize that harassment based on sexual orientation can trigger both FEHA protections and the EFAA’s restrictions on forced arbitration.
U.S. Department of Labor Recovers More Than $500,000 for San Diego Deli Workers — Wage Enforcement
Date: July 17, 2026
Summary:
The U.S. Department of Labor announced that its Wage and Hour Division recovered $500,256 in back wages for six employees of Chau Deli, doing business as A Chau Sandwich in San Diego. Investigators found that employees were paid a flat rate of $100 per day despite frequently working 11-hour days and averaging approximately 55 hours per week.
According to the Department, the workers’ regular rate fell below the applicable local minimum wage, and they also did not receive required overtime premiums for hours exceeding 40 in a workweek. Each of the six employees ultimately received approximately $83,000 in back wages.
Implications:
The recovery demonstrates the potentially substantial consequences of minimum-wage and overtime violations, even when relatively few employees are involved. California employers must comply with applicable federal, state, and local wage requirements and accurately track all hours worked rather than relying on flat daily rates that fail to account for minimum wage and overtime obligations.
Ventura County Employees’ Retirement Association v. Criminal Justice Attorneys Association of Ventura County — Public Employee Pensions
Date: July 27, 2026
Summary:
In Ventura County Employees’ Retirement Association v. Criminal Justice Attorneys Association of Ventura County, Case No. S283978, the California Supreme Court addressed how unused leave cashouts may be counted when calculating pension benefits for certain county employees hired before 2013.
The court held that California’s pension reform law excludes leave cashout payments exceeding the amount an employee is permitted to earn and receive during each applicable 12-month period in the employee’s final compensation period. The limitation applies even when that final compensation period crosses portions of two different calendar years.
Implications:
The ruling reinforces statutory limits designed to prevent “pension spiking” through unusually large leave payouts near retirement. California county employees covered by these retirement systems should not assume that accumulated leave paid near retirement will necessarily increase pensionable compensation in full.
Sutter Roseville Medical Center Resolves EEOC Disability Discrimination Investigation for $200,000 — ADA Enforcement
Date: July 28, 2026
Summary:
Sutter Roseville Medical Center agreed to pay $200,000 in back pay and compensatory damages to resolve an EEOC investigation into disability discrimination involving a former staff nurse. According to the EEOC, the medical center refused to consider reassignment to an available position as a reasonable accommodation and instead terminated the nurse because of her disability.
The settlement also requires ADA training for human resources personnel, posting of an equal employment opportunity notice, and periodic compliance reporting to the EEOC for two years.
Implications:
The settlement underscores an important aspect of disability accommodation law: when other reasonable accommodations are unavailable, reassignment to a vacant position may need to be considered. California employers should engage meaningfully in the interactive process rather than assuming termination is appropriate when an employee can no longer perform a current position without accommodation.
Saberin v. Alation, Inc. — California Law and Remote Employees
Date: July 30, 2026
Summary:
In Saberin v. Alation, Inc., Case No. A174549, the California Court of Appeal considered whether California employment protections applied to an employee of a California-based company who lived and worked remotely in Utah.
The employee alleged that he was terminated because of a Florida arrest that did not result in a conviction and argued that California’s Fair Employment and Housing Act and Labor Code section 432.7 protected him. The court held that the statutes did not apply under the circumstances because the employee worked outside California, the arrest occurred outside California, and there was insufficient evidence that the termination decision was made in California.
Implications:
The decision provides important guidance for an increasingly remote workforce. Merely working for a company headquartered or principally based in California does not automatically give an out-of-state employee the protection of every California employment statute. Whether California workplace rights apply can depend heavily on where the employee works and where the allegedly unlawful employment decision occurred.
NLRB Rules in ArtCenter College of Design Effects-Bargaining Dispute — Federal Labor Relations
Date: July 30, 2026
Summary:
In ArtCenter College of Design, Case No. 31-CA-325485, 375 NLRB No. 17, the National Labor Relations Board upheld an administrative law judge’s conclusion that the Pasadena-based college did not violate federal labor law when it created two new non-bargaining-unit positions.
The dispute focused on whether the college failed to give the union adequate notice and a meaningful opportunity to bargain over the effects that creation of the positions had on bargaining-unit employees’ terms and conditions of employment. The Board adopted the administrative law judge’s conclusion that the employer had satisfied its obligations and dismissed the complaint.
Implications:
California unionized employers should distinguish between decisions that may fall within managerial authority and their separate obligation to bargain over the effects of those decisions on represented employees when required by federal labor law. Providing unions with sufficient notice and a genuine opportunity for effects bargaining can be critical to avoiding unfair labor practice liability.
Conclusion: Looking Back on California’s Labor Law Updates from July 2026
As California courts continue to shape protections around wage-and-hour violations, discrimination, contract enforcement, and whistleblower claims, you need attorneys with deep local insight. At HKM Employment Attorneys in San Diego, Managing Partner Cecilia Brennan leads a team dedicated to employee advocacy—from contract review and severance negotiations to hostile work environment cases and unpaid wages—all with fearless, expert representation . If recent legal developments affect your workplace situation, reach out to our San Diego office to discuss how we can help you enforce your rights.
