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AB 1697 delays California’s “stay-or-pay” law so it applies only to contracts entered into on or after January 1, 2027, and it revises and expands its exceptions, including for retention bonuses granted during employment, advanced paid time off (PTO), government grant-funded programs, and certain financial services arrangements.
AB 1697: Stay-or-Pay Law – Revisions, New Expectations, and Delayed Effective Date On September 30, 2026, Gov. Gavin Newsom signed AB 1697, an urgency statute that took effect immediately. It amends Business and Professions Code § 16608 and Labor Code § 926, the “stay-or-pay” provisions enacted last year under AB 692, which originally applied to contracts entered into on or after January 1, 2026.
Updated: May 25, 2018: JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
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