📅 2026 Update: Key Changes in Employment Law

Since the original article was written, there have been important updates in U.S. employment law that impact hiring, firing, wages, and worker rights. Notably, changes in California's minimum wage and salary thresholds for exempt employees are significant for many workers. The previous article continues further down the page, providing foundational knowledge about employment law.

🛠️ Overtime Salary Thresholds

In November 2024, a federal court vacated a rule that aimed to raise the overtime salary threshold. As a result, the threshold returned to the 2019 level of $684 per week or $35,568 annually for standard exemptions. This change affects many salaried workers who may now be entitled to overtime pay.

⚖️ Non-Compete Agreements

The Federal Trade Commission's effort to ban most non-compete agreements was blocked in 2024. The court's decision meant that these agreements remain enforceable in many cases. The FTC formally removed the ban from its regulations on February 12, 2026.

💵 California Minimum Wage Changes

Effective January 1, 2026, California's minimum wage increased to $16.90 per hour, up from $16.50 in 2025. This increase reflects California's ongoing adjustments to match inflation and cost of living changes.

🎓 Exempt Employee Salary Threshold

In California, the annual salary threshold for exempt employees rose to $70,304 or $5,858.67 per month starting January 1, 2026. This change is crucial for those in executive, administrative, and professional roles who are classified as exempt from overtime pay.

📌 Summary of Key Points

  • ⚖️ Overtime threshold returned to $684/week.
  • 🚫 Non-compete ban was blocked and removed.
  • 💵 California minimum wage now $16.90/hour.
  • 📈 Exempt employee salary threshold in California is $70,304/year.
  • 📅 Employers must post new minimum wage notices by January 1, 2026.

💡 Tips for Navigating Employment Law

Review details of your own situation with your attorney to understand your rights and obligations under current employment laws.

📝 Know Your Rights

Be aware of your rights regarding overtime pay and minimum wage. The return to the 2019 overtime salary threshold means more workers may be eligible for overtime compensation.

📅 Update Notices

Employers in California must update workplace postings to reflect the new minimum wage by January 1, 2026. Ensure your workplace complies with this requirement to avoid penalties.

📊 Understand Exemptions

Familiarize yourself with what constitutes an exempt employee in California. To qualify, employees must earn at least $70,304 annually or $5,858.67 monthly.

🔍 Monitor Non-Compete Agreements

If you're entering a new job, carefully review any non-compete agreements. Despite the FTC's attempt to ban them, many remain enforceable, impacting your future job opportunities.

🗣️ Stay Informed

Keep up to date with changes in employment laws, especially regarding minimum wage and salary thresholds. Laws can change quickly, and staying informed is essential for your rights as an employee.

❓ Frequently Asked Questions

🛠️ What are my rights regarding overtime pay?

Employees are entitled to overtime pay if they earn less than the established salary threshold for their job classification. As of 2026, this threshold is $684 per week.

📑 How can I file a complaint about wage violations?

You can file a complaint with the U.S. Department of Labor's Wage and Hour Division or your state's labor department. They provide guidance on how to proceed with wage violation claims.

⚖️ Are non-compete agreements enforceable in every state?

Non-compete agreements vary by state. While many states allow them, they may be subject to restrictions and cannot be overly broad or unreasonable.

💼 What constitutes an exempt employee in California?

In California, exempt employees must meet specific criteria, including earning a minimum annual salary of $70,304 and performing certain job duties related to management or professional roles.

📃 How often does California adjust its minimum wage?

California's minimum wage is adjusted annually based on inflation, with increases up to 3.5% for inflation over 7% as measured by the national Consumer Price Index.

📆 When do employers need to post the new minimum wage notice?

Employers must post the updated California Minimum Wage notice by January 1, 2026, to comply with the law.

⚖️ Recent Court Cases Related to Employment Law

Recent court rulings have impacted employment law, particularly concerning wage thresholds and non-compete agreements. These decisions shape the landscape of workers' rights and employer obligations.

For more recent rulings, feel free to browse more rulings on the news page.

End of October 2026 Update





Employment: Understanding the Basics


The term “employment” refers to a legally-binding contract between two parties—the employer and the employee. An employee is defined as an individual in the service of another (individual or entity) under a contract of hire under which the employer has the ability to direct the employee regarding material details concerning how work should be performed. 

As a simplified take on the term, employment refers to the act of securing work. An employed individual is occupied in a certain industry, where he or she will provide a certain skill or service in exchange for pay. 

Understanding the Basics of Employment

The employee/employer relationship—including expected work, regulations in the workplace and pay--is affirmed in the employment contract. If the employer or employee does not uphold the stipulations present in the employment contract, the employment may be terminated or the employee may seek just compensation for the employer’s breach. 

The Employee:


As stated above, employment constitutes a relationship between an employer and an employee. The employee is responsible for contributing labor and expertise to a specific endeavor as defined by the employer. The employee is typically hired to perform a specific duty which is packaged into a job. In a developed economy, employment signifies an absolute relationship between an individual and his or her hiring corporation—this relationship is held separate from those of clients and consumers. 

The employer’s level of authority over the employee is dependent on a number of factors, the most powerful being the nature of the prescribed relationship between the two parties. This relationship is affected by the motivation, interests and control of the parties. In most employment relationships, it is the employer’s responsibility to balance and manage these factors to properly establish a productive working environment. 

Finding Employment:


The primary means for an employer to secure a workforce is undertaken through recruiting, job listings (published online and in newspapers) or internally, through promotions. An employer will also hire professional recruitment consultants or agencies, which receive commissions from employers to find job seekers for particular openings. These recruitment firms will find, screen and subsequently select qualified candidates to apply/interview for particular job openings. 

Employment in the United States:


Employment in the United States is considered to be an at-will relationship, concerning the employer and employee. This relationship denotes the employee and the employer are both free to terminate the employment for any cause and at any time. However, if the termination of employment is deemed unjust by the employee, the fired worker can seek legal recourse to challenge the termination. 

Unjust termination in the United States may include a firing based on discrimination; an employer may not terminate an employment contract based on the employee’s race, national origin, gender, sexual orientation, age, physical or mental disability, religion, pregnancy, ancestry or military status. 

Furthermore, despite the agreements latent in the employment contract, an employer is required to pay an employee at least the minimum wages established by the federal government or those set by the state in which the work is undertaken. Individual states may establish their own minimum wage if it is higher than the federal government’s to ensure a higher living wage or standard of living for their residents. Employers are required to establish salaries based on merit and job function and not on sexual orientation, gender, race or ethnicity.