California Limits Employers' Ability to Reclaim Repayments

The People’s Republic of California had recently enacted a bill that would essentially forbid employers from requiring repayment of moneys owed upon termination. The effective date is January 1, 2026. How it might interact with federal law and other states is yet to be determined, but employers are on notice that virtually all standard means of recouping payments to employees are now non-existent in California. The plaintiff in a related case said she had been replaced by a male in his 20s, and the company had terminated quite a number of senior employees.