A Deeper Dive Into California’s New Limitations on “Stay or Pay” Clauses as of January 1, 2026

Many jurisdictions have recently enacted, or are considering enacting, legislation limiting “stay-or-pay” compensation structures, which require employees to repay their employers certain amounts either upon or as a result of a termination of their employment relationship. California has implemented one of the most comprehensive bills in this regard, which represents a significant expansion of California’s restrictions on contractual restraints affecting worker mobility.... By: Mayer Brown