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  "data": {
    "topic": "stay-or-pay",
    "state": "california",
    "frontmatter": {
      "title": "Stay-or-Pay and Employee Repayment in California",
      "description": "A question-by-question summary of California stay-or-pay law after AB 692, including the Business and Professions Code Section 16608 ban on employee repayment and exit-fee terms for contracts entered on or after January 1, 2026, the narrow sign-on-bonus carve-out, the Labor Code Section 926 void rule and worker penalty, the treatment of training and relocation repayment, the bar on deducting repayment from final pay, and how Sections 925 and 16600.5 reach California workers regardless of out-of-state drafting.",
      "state": "California",
      "lastReviewed": "2026-06-30",
      "license": "CC BY 4.0",
      "authors": [
        "steven-obiajulu"
      ],
      "summary": {
        "repaymentEnforceable": "prohibited",
        "bottomLine": "Most employee repayment (stay-or-pay) terms are void for contracts entered on or after Jan 1, 2026, with a narrow sign-on-bonus carve-out.",
        "keyLaw": "Cal. Bus. & Prof. Code § 16608; Cal. Lab. Code § 926",
        "clawbackEarnedComp": "no",
        "wageDeductionFromFinalPay": "prohibited",
        "statutoryStayOrPayLimit": "comprehensiveBan",
        "trainingRepayment": "restricted",
        "prorationOrCap": "required",
        "banEffectiveDate": "2026-01-01",
        "safestStructure": "Avoid repayment; if used, fit the strict § 16608 sign-on carve-out (separate agreement, prorated, no interest, two-year cap)."
      },
      "about": [
        "California stay-or-pay and employee repayment law",
        "California Assembly Bill 692",
        "California Business and Professions Code Section 16608",
        "California Labor Code Section 926",
        "Training repayment and exit-fee terms in California",
        "Sign-on bonus repayment carve-out"
      ],
      "translations": [
        {
          "language": "中文",
          "status": "planned"
        },
        {
          "language": "Español",
          "status": "planned"
        },
        {
          "language": "Português",
          "status": "planned"
        },
        {
          "language": "Deutsch",
          "status": "planned"
        }
      ]
    },
    "questions": [
      {
        "slug": "repayment-enforceability",
        "label": "Are employee repayment or stay-or-pay terms enforceable?",
        "heading": "Are repayment terms enforceable?",
        "answerText": "Mostly no, for contracts entered on or after January 1, 2026. Business and Professions Code Section 16608, added by AB 692, treats an employment term that requires a worker to pay the employer back as an unlawful restraint, and Labor Code Section 926 makes a contract or term that violates Section 16608 void as a matter of public policy.",
        "sources": [
          {
            "id": "california-business-and-professions-code-sec-166",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Business and Professions Code Sec. 16608(b)(1)(A)",
            "citation": "California Business and Professions Code Sec. 16608(b)(1)(A).",
            "url": "https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB692",
            "proposition": "Supports the cited proposition. (California Business and Professions Code Sec. 16608(b)(1)(A))",
            "verbatimQuote": "requires the worker to pay",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-business-and-professions-code-sec-166"
          },
          {
            "id": "california-labor-code-sec-926",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Labor Code Sec. 926",
            "citation": "California Labor Code Sec. 926.",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=926",
            "proposition": "California Labor Code Section 926 establishes that contracts violating Business and Professions Code Section 16608 are void, authorizes civil actions for violations, and mandates liability for actual damages, statutory penalties, injunctive relief, and attorney's fees.",
            "verbatimQuote": "A contract or contract term that violates Section 16608 of the Business and Professions Code is void as contrary to public policy only if entered into on or after January 1, 2026.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-labor-code-sec-926"
          },
          {
            "id": "mayer-brown-a-deeper-dive-into-california-s-new",
            "authorityType": "law-firm-commentary",
            "tier": "lawyer-judgment-backed",
            "title": "Mayer Brown commentary",
            "citation": "Mayer Brown, A Deeper Dive Into California's New Limitations on Stay or Pay Clauses as of January 1, 2026.",
            "url": "https://www.mayerbrown.com/en/insights/publications/2026/03/a-deeper-dive-into-californias-new-limitations-on-stay-or-pay-clauses-as-of-january-1-2026",
            "proposition": "California Assembly Bill 692, effective January 1, 2026, prohibits most employment-related repayment and exit-fee provisions by declaring them void as unlawful restraints on trade and providing workers with a private right of action for civil damages.",
            "verbatimQuote": "Assembly Bill (AB) 692 prohibits most employment‑related repayment and “exit‑fee” provisions in agreements that are entered into on or after January 1, 2026.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-mayer-brown-a-deeper-dive-into-california-s-new"
          },
          {
            "id": "greenberg-traurig-california-claws-back-new-limi",
            "authorityType": "commentary",
            "tier": "lawyer-judgment-backed",
            "title": "Greenberg Traurig commentary",
            "citation": "Greenberg Traurig, California Claws Back: New Limits on Stay-or-Pay Contracts Starting Jan. 1, 2026.",
            "url": "https://www.gtlaw-laborandemployment.com/2025/11/california-claws-back-new-limits-on-stay-or-pay-contracts-starting-jan-1-2026/",
            "proposition": "California Assembly Bill 692, effective January 1, 2026, imposes strict limitations on repayment obligations for sign-on bonuses and prohibits them entirely for retention bonuses, while establishing private rights of action for non-compliant agreements.",
            "verbatimQuote": "effective Jan. 1, 2026, California Assembly Bill 692 (codified at Business & Professions Code section 16608 and Labor Code section 926) limits an employer’s ability to impose repayment obligations for these upfront sign-on and retention bonuses",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-greenberg-traurig-california-claws-back-new-limi"
          }
        ]
      },
      {
        "slug": "clawback-earned-comp",
        "label": "Can an employer claw back compensation the employee already earned or received?",
        "heading": "Can the employer claw back pay already earned?",
        "answerText": "No. A term that requires the worker to pay the employer back is the very thing Section 16608 reaches, and Section 926 makes such a term void for agreements entered on or after January 1, 2026, so the employer has no enforceable contract right to recover the money.",
        "sources": [
          {
            "id": "california-business-and-professions-code-sec-166-clawback",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Business and Professions Code Sec. 16608(b)(1)(A)",
            "citation": "California Business and Professions Code Sec. 16608(b)(1)(A).",
            "url": "https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB692",
            "proposition": "Supports the cited proposition. (California Business and Professions Code Sec. 16608(b)(1)(A))",
            "verbatimQuote": "requires the worker to pay",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-business-and-professions-code-sec-166-clawback"
          },
          {
            "id": "california-labor-code-sec-926-clawback",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Labor Code Sec. 926",
            "citation": "California Labor Code Sec. 926.",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=926",
            "proposition": "California Labor Code Section 926 establishes that contracts violating Business and Professions Code Section 16608 are void, authorizes civil actions for violations, and mandates liability for actual damages, statutory penalties, injunctive relief, and attorney's fees.",
            "verbatimQuote": "A contract or contract term that violates Section 16608 of the Business and Professions Code is void as contrary to public policy only if entered into on or after January 1, 2026.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-labor-code-sec-926-clawback"
          },
          {
            "id": "ca-926-damages-gate",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "Cal. Lab. Code § 926 (AB 692)",
            "citation": "Cal. Lab. Code § 926(c).",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=926",
            "proposition": "Labor Code section 926 gives a worker or worker representative a civil action for a section 16608 violation, with liability of actual damages or $5,000 per worker, whichever is greater, plus injunctive relief and attorney's fees.",
            "verbatimQuote": "Any person found liable for a violation of this section shall be liable for actual damages sustained by the worker or workers on whose behalf the case is brought, or five thousand dollars ($5,000) per worker, whichever is greater, in addition to injunctive relief, and reasonable attorney's fees and costs.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-ca-926-damages-gate"
          }
        ]
      },
      {
        "slug": "final-pay-deduction",
        "label": "Can repayment be deducted from the final paycheck?",
        "heading": "Can repayment come out of the final paycheck?",
        "answerText": "No. If the underlying repayment term is void under Section 16608 and Section 926, the employer has no lawful basis to take the amount out of the worker's wages, including the final paycheck.",
        "sources": [
          {
            "id": "california-labor-code-sec-926-deduction",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Labor Code Sec. 926",
            "citation": "California Labor Code Sec. 926.",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=926",
            "proposition": "California Labor Code Section 926 establishes that contracts violating Business and Professions Code Section 16608 are void, authorizes civil actions for violations, and mandates liability for actual damages, statutory penalties, injunctive relief, and attorney's fees.",
            "verbatimQuote": "A contract or contract term that violates Section 16608 of the Business and Professions Code is void as contrary to public policy only if entered into on or after January 1, 2026.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-labor-code-sec-926-deduction"
          },
          {
            "id": "california-business-and-professions-code-sec-166-deduction",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Business and Professions Code Sec. 16608(b)(1)(A)",
            "citation": "California Business and Professions Code Sec. 16608(b)(1)(A).",
            "url": "https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB692",
            "proposition": "Supports the cited proposition. (California Business and Professions Code Sec. 16608(b)(1)(A))",
            "verbatimQuote": "requires the worker to pay",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-business-and-professions-code-sec-166-deduction"
          },
          {
            "id": "mayer-brown-a-deeper-dive-into-california-s-new-deduction",
            "authorityType": "law-firm-commentary",
            "tier": "lawyer-judgment-backed",
            "title": "Mayer Brown commentary",
            "citation": "Mayer Brown, A Deeper Dive Into California's New Limitations on Stay or Pay Clauses as of January 1, 2026.",
            "url": "https://www.mayerbrown.com/en/insights/publications/2026/03/a-deeper-dive-into-californias-new-limitations-on-stay-or-pay-clauses-as-of-january-1-2026",
            "proposition": "California Assembly Bill 692, effective January 1, 2026, prohibits most employment-related repayment and exit-fee provisions by declaring them void as unlawful restraints on trade and providing workers with a private right of action for civil damages.",
            "verbatimQuote": "Assembly Bill (AB) 692 prohibits most employment‑related repayment and “exit‑fee” provisions in agreements that are entered into on or after January 1, 2026.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-mayer-brown-a-deeper-dive-into-california-s-new-deduction"
          },
          {
            "id": "greenberg-traurig-california-claws-back-new-limi-deduction",
            "authorityType": "commentary",
            "tier": "lawyer-judgment-backed",
            "title": "Greenberg Traurig commentary",
            "citation": "Greenberg Traurig, California Claws Back: New Limits on Stay-or-Pay Contracts Starting Jan. 1, 2026.",
            "url": "https://www.gtlaw-laborandemployment.com/2025/11/california-claws-back-new-limits-on-stay-or-pay-contracts-starting-jan-1-2026/",
            "proposition": "California Assembly Bill 692, effective January 1, 2026, imposes strict limitations on repayment obligations for sign-on bonuses and prohibits them entirely for retention bonuses, while establishing private rights of action for non-compliant agreements.",
            "verbatimQuote": "effective Jan. 1, 2026, California Assembly Bill 692 (codified at Business & Professions Code section 16608 and Labor Code section 926) limits an employer’s ability to impose repayment obligations for these upfront sign-on and retention bonuses",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-greenberg-traurig-california-claws-back-new-limi-deduction"
          }
        ]
      },
      {
        "slug": "training-repayment",
        "label": "Are training, tuition, or relocation repayment terms treated differently?",
        "heading": "Are training or tuition repayments treated differently?",
        "answerText": "They are restricted, not exempt — but Section 16608 leaves two narrow paths open. A term that requires the worker to pay the employer back sweeps in training, tuition, and relocation repayment along with bonus repayment, so a bare training-repayment agreement (a TRAP) is presumptively void; it survives only if it fits the sign-on-bonus carve-out or the separate tuition exception the statute draws for a transferable credential offered outside the employment contract.",
        "sources": [
          {
            "id": "california-business-and-professions-code-sec-166-training",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Business and Professions Code Sec. 16608(b)(1)(A)",
            "citation": "California Business and Professions Code Sec. 16608(b)(1)(A).",
            "url": "https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB692",
            "proposition": "Supports the cited proposition. (California Business and Professions Code Sec. 16608(b)(1)(A))",
            "verbatimQuote": "requires the worker to pay",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-business-and-professions-code-sec-166-training"
          },
          {
            "id": "california-labor-code-sec-926-training",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Labor Code Sec. 926",
            "citation": "California Labor Code Sec. 926.",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=926",
            "proposition": "California Labor Code Section 926 establishes that contracts violating Business and Professions Code Section 16608 are void, authorizes civil actions for violations, and mandates liability for actual damages, statutory penalties, injunctive relief, and attorney's fees.",
            "verbatimQuote": "A contract or contract term that violates Section 16608 of the Business and Professions Code is void as contrary to public policy only if entered into on or after January 1, 2026.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-labor-code-sec-926-training"
          },
          {
            "id": "ca-16608-carveout-training",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "Cal. Bus. & Prof. Code § 16608 (AB 692)",
            "citation": "Cal. Bus. & Prof. Code § 16608(b).",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=16608",
            "proposition": "Section 16608(b) conditions the sign-on carve-out on a repayment obligation that accrues no interest, is prorated over a retention period that cannot exceed two years, and that the worker may opt to defer until the retention period is fully served.",
            "verbatimQuote": "Any repayment obligation for early separation from employment is not subject to interest accrual and is prorated based on the remaining term of any retention period, which shall not exceed two years from the receipt of payment. (iv) The worker has an option to defer receipt of the payment to the end of a fully served retention period without any repayment obligation.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-ca-16608-carveout-training"
          },
          {
            "id": "ca-16608-transferable-credential",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "Cal. Bus. & Prof. Code § 16608 (AB 692)",
            "citation": "Cal. Bus. & Prof. Code § 16608.",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=16608",
            "proposition": "Section 16608 defines a transferable credential as a degree offered by an accredited, state-authorized third-party institution, which anchors the tuition exception for credentials offered outside the employment contract.",
            "verbatimQuote": "a degree that is offered by a third-party institution that is accredited and authorized to operate in the state",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-ca-16608-transferable-credential"
          },
          {
            "id": "greenberg-traurig-california-claws-back-new-limi-training",
            "authorityType": "commentary",
            "tier": "lawyer-judgment-backed",
            "title": "Greenberg Traurig commentary",
            "citation": "Greenberg Traurig, California Claws Back: New Limits on Stay-or-Pay Contracts Starting Jan. 1, 2026.",
            "url": "https://www.gtlaw-laborandemployment.com/2025/11/california-claws-back-new-limits-on-stay-or-pay-contracts-starting-jan-1-2026/",
            "proposition": "California Assembly Bill 692, effective January 1, 2026, imposes strict limitations on repayment obligations for sign-on bonuses and prohibits them entirely for retention bonuses, while establishing private rights of action for non-compliant agreements.",
            "verbatimQuote": "effective Jan. 1, 2026, California Assembly Bill 692 (codified at Business & Professions Code section 16608 and Labor Code section 926) limits an employer’s ability to impose repayment obligations for these upfront sign-on and retention bonuses",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-greenberg-traurig-california-claws-back-new-limi-training"
          }
        ]
      },
      {
        "slug": "out-of-state-reach",
        "label": "Does California law reach an agreement drafted under another state's law?",
        "heading": "Does California law reach an out-of-state agreement?",
        "answerText": "Usually yes for a California worker. Labor Code Section 925 limits an employer's ability to force a California-based employee to litigate elsewhere or under another state's law, and Business and Professions Code Section 16600.5 extends California's restraint rules regardless of where and when the contract was signed, so a choice-of-law clause does not reliably move a California worker's repayment term outside AB 692.",
        "sources": [
          {
            "id": "california-labor-code-sec-925",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Labor Code Sec. 925",
            "citation": "California Labor Code Sec. 925.",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=925",
            "proposition": "California Labor Code Section 925 prohibits employers from requiring California-based employees to waive their rights to California venue or substantive law in employment contracts, unless the employee is represented by independent legal counsel.",
            "verbatimQuote": "An employer shall not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would do either of the following: (1) Require the employee to adjudicate outside of California a claim arising in California.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-labor-code-sec-925"
          },
          {
            "id": "california-business-and-professions-code-sec-166-2",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Business and Professions Code Sec. 16600.5(a)",
            "citation": "California Business and Professions Code Sec. 16600.5(a).",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=16600.5",
            "proposition": "Supports the cited proposition. (California Business and Professions Code Sec. 16600.5(a))",
            "verbatimQuote": "regardless of where and when the contract was signed",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-business-and-professions-code-sec-166-2"
          },
          {
            "id": "greenberg-traurig-california-claws-back-new-limi-reach",
            "authorityType": "commentary",
            "tier": "lawyer-judgment-backed",
            "title": "Greenberg Traurig commentary",
            "citation": "Greenberg Traurig, California Claws Back: New Limits on Stay-or-Pay Contracts Starting Jan. 1, 2026.",
            "url": "https://www.gtlaw-laborandemployment.com/2025/11/california-claws-back-new-limits-on-stay-or-pay-contracts-starting-jan-1-2026/",
            "proposition": "California Assembly Bill 692, effective January 1, 2026, imposes strict limitations on repayment obligations for sign-on bonuses and prohibits them entirely for retention bonuses, while establishing private rights of action for non-compliant agreements.",
            "verbatimQuote": "effective Jan. 1, 2026, California Assembly Bill 692 (codified at Business & Professions Code section 16608 and Labor Code section 926) limits an employer’s ability to impose repayment obligations for these upfront sign-on and retention bonuses",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-greenberg-traurig-california-claws-back-new-limi-reach"
          }
        ]
      },
      {
        "slug": "safest-structure",
        "label": "What structure is safest under the California rule?",
        "heading": "What structure is safest?",
        "answerText": "Avoid repayment terms for California workers. If a payment must carry a repayment string, the only defensible path is the narrow Section 16608 sign-on carve-out: a stand-alone written agreement, at least five business days for the worker to consult counsel before signing, a prorated obligation that carries no interest, a retention period capped at two years, and a worker option to defer receipt — not a flat retention clawback.",
        "sources": [
          {
            "id": "california-business-and-professions-code-sec-166-safest",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Business and Professions Code Sec. 16608(b)(1)(A)",
            "citation": "California Business and Professions Code Sec. 16608(b)(1)(A).",
            "url": "https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB692",
            "proposition": "Supports the cited proposition. (California Business and Professions Code Sec. 16608(b)(1)(A))",
            "verbatimQuote": "requires the worker to pay",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-business-and-professions-code-sec-166-safest"
          },
          {
            "id": "california-labor-code-sec-926-safest",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "California Labor Code Sec. 926",
            "citation": "California Labor Code Sec. 926.",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=926",
            "proposition": "California Labor Code Section 926 establishes that contracts violating Business and Professions Code Section 16608 are void, authorizes civil actions for violations, and mandates liability for actual damages, statutory penalties, injunctive relief, and attorney's fees.",
            "verbatimQuote": "A contract or contract term that violates Section 16608 of the Business and Professions Code is void as contrary to public policy only if entered into on or after January 1, 2026.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-california-labor-code-sec-926-safest"
          },
          {
            "id": "ca-16608-counsel-window",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "Cal. Bus. & Prof. Code § 16608 (AB 692)",
            "citation": "Cal. Bus. & Prof. Code § 16608(b).",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=16608",
            "proposition": "Section 16608(b) conditions the sign-on carve-out on advising the worker of the right to consult an attorney and giving at least five business days to obtain advice of counsel before executing the agreement.",
            "verbatimQuote": "right to consult an attorney regarding the agreement and provided with a reasonable time period of not less than five business days to obtain advice of counsel prior to executing the agreement.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-ca-16608-counsel-window"
          },
          {
            "id": "ca-16608-carveout-safest",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "Cal. Bus. & Prof. Code § 16608 (AB 692)",
            "citation": "Cal. Bus. & Prof. Code § 16608(b).",
            "url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=16608",
            "proposition": "Section 16608(b) conditions the sign-on carve-out on a repayment obligation that accrues no interest, is prorated over a retention period that cannot exceed two years, and that the worker may opt to defer until the retention period is fully served.",
            "verbatimQuote": "Any repayment obligation for early separation from employment is not subject to interest accrual and is prorated based on the remaining term of any retention period, which shall not exceed two years from the receipt of payment. (iv) The worker has an option to defer receipt of the payment to the end of a fully served retention period without any repayment obligation.",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-ca-16608-carveout-safest"
          },
          {
            "id": "greenberg-traurig-california-claws-back-new-limi-safest",
            "authorityType": "commentary",
            "tier": "lawyer-judgment-backed",
            "title": "Greenberg Traurig commentary",
            "citation": "Greenberg Traurig, California Claws Back: New Limits on Stay-or-Pay Contracts Starting Jan. 1, 2026.",
            "url": "https://www.gtlaw-laborandemployment.com/2025/11/california-claws-back-new-limits-on-stay-or-pay-contracts-starting-jan-1-2026/",
            "proposition": "California Assembly Bill 692, effective January 1, 2026, imposes strict limitations on repayment obligations for sign-on bonuses and prohibits them entirely for retention bonuses, while establishing private rights of action for non-compliant agreements.",
            "verbatimQuote": "effective Jan. 1, 2026, California Assembly Bill 692 (codified at Business & Professions Code section 16608 and Labor Code section 926) limits an employer’s ability to impose repayment obligations for these upfront sign-on and retention bonuses",
            "anchor": "https://openagreements.org/practice-guides/stay-or-pay/us/california#src-greenberg-traurig-california-claws-back-new-limi-safest"
          }
        ]
      }
    ]
  }
}