California’s AB 692: Implications for Global Mobility Programs

Effective January 1, 2026, California’s Assembly Bill 692 (AB 692) will prohibit employers from requiring employees to repay costs, fees or penalties if they leave a job. These “stay-or-pay” provisions have commonly appeared in relocation, training or retention agreements, which are integral to many global mobility programs.

The bill is designed to strengthen worker protections, and it could have significant implications for organizations that incorporate cost-recovery or repayment terms in relocation or assignment programs. Employers transferring talent to or within California, or operating under contracts governed by California law, may need to carefully assess the potential impact of these changes on their policies and agreements.

As the effective date approaches, the focus now shifts to how organizations can adapt their mobility policies to align with the new requirements.

Adapting Mobility Policies to the New Legislation

Beyond compliance, AB 692 could reshape how organizations approach talent mobility. Traditional cost-recovery models may give way to retention strategies that prioritize career development and a positive employee experience over financial penalties.

Companies may consider alternative approaches, such as flexible benefits, phased bonuses or enhanced support services to maintain program effectiveness without relying on repayment clauses. This shift offers an opportunity to strengthen employer branding and improve long-term retention.

Frequently Asked Questions: Mobility Leaders on AB 692

As global mobility teams prepare for this new law, several common questions are emerging about its impact and what steps to take next.

1. How does AB 692 impact global mobility cost forecasting? 
   Organizations may need to adjust budgets since repayment clauses can no longer offset relocation costs. This could increase upfront expenses and require new ROI models for mobility programs.
2. What risks exist if companies don’t comply?
   Non-compliance could lead to legal disputes, contract invalidation and reputational damage. It may also undermine employee trust and engagement.
3. How should global mobility teams communicate these changes internally?
   Develop clear guidance for HR, talent acquisition and business leaders. Consider training sessions and updated policy templates to ensure consistent application.
4. Does AB 692 signal a broader trend in employment law?
   Yes. It reflects growing emphasis on employee rights and mobility flexibility. Similar legislation could emerge in other states or countries, so proactive policy reviews are recommended.
5. What alternatives to repayment clauses are most effective?
   Retention bonuses tied to milestones, career development programs and enhanced relocation support can help maintain program effectiveness without violating AB 692.

Action Steps for Employers

• • Audit agreements and policies: Identify repayment or cost-recovery clauses in employment, relocation, assignment and retention agreements.
  • Update documentation: Ensure templates, agreements and policies align with AB 692 requirements before January 2026.
  • Coordinate across functions: HR, legal and mobility teams should align to ensure consistency in policies and communications.
  • Engage mobility partners: Confirm program revisions support operational and compliance objectives.
  • Consult legal counsel on exceptions: Certain repayment or cost arrangements may fall outside AB 692’s scope. Seek guidance before making changes.

Looking Ahead

AB 692 marks a significant regulatory shift and an opportunity for organizations to modernize their global mobility policies. By proactively reviewing agreements and aligning policies now, employers can ensure compliance while strengthening transparency and employee trust.