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Alston & Bird and the Collateral Risk Network (CRN) are hosting a three-part roundtable series examining Section 6 of the March 13 Executive Order, “Promoting Access to Mortgage Credit” and its implications for the mortgage finance, collateral risk, and valuation sectors.

The first roundtable, taking place on April 23, 2026, at 2:00 PM EST, will feature Alston & Bird Financial Services partner Nanci Weissgold as a speaker and focus specifically on Section 6 of the Executive Order and begin developing industry insight into its meaning, likely implications, and practical impact on lenders, investors, valuation providers, regulators, and policymakers. Other speakers include Dallin Merrill (Head of Policy, Structured Finance Association), Sharon Whitaker (Vice President, American Bankers Association), and Ron Haynie (Mortgage Finance Policy and Executive Vice President ICBA Mortgage, Independent Community Bankers of America).

Q&A will be available as time allows.

About the Series

This series is designed to provide the industry, regulators, and legislators with practical insight into what the Executive Order means, how it may affect collateral valuation policy and practice, and where the most important opportunities and risks may emerge.

Questions?

Please contact Amanda Vercruysse at amanda.vercruysse@alston.com or +1 202 239 3068.

Register Here

Originally published November 11, 2025 on the Alston & Bird website.

Executive Summary

As the end of 2025 approaches, our Labor & Employment Group highlights and summarizes new employment laws taking effect in California beginning in 2026.

• Notice and reporting requirements for workers’ rights, Cal-WARN notices, and data breaches will be updated
• The state labor board will step in when the National Labor Relations Board “expressly or impliedly ceded jurisdiction,” though litigation may derail the state law
• Rehire and retention protections for workers stemming from the COVID-19 pandemic have been extended to 2027

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The new year will bring new employment laws to California’s books. Employers should be aware of these new laws to ensure compliance in the coming year and beyond.

Pay Equity

Equal Pay Act Reforms – SB 642

An amendment to California’s Equal Pay Act, SB 642 expands the definition of wages to include benefits and non-salary compensation, extends the statute of limitations and recovery period for pay equity violations, and adds protections for nonbinary employees. Taking effect January 1, 2026, the law also imposes stricter pay scale requirements in job postings to promote greater pay transparency and prevent employers from undercutting the requirement with speculative pay ranges.

For a more in-depth analysis on changes to California’s pay equity protections, see here.

New Pay Data Reporting Requirements and Mandatory Penalties – SB 464

Starting January 1, 2027, employers with 100 or more employees and are required to submit annual demographic pay data reports to the Civil Rights Department (CRD) will now have to do so for 23 specified job categories—up from 10.

Current law allows courts to impose civil penalties on employers that fail to comply with pay data reporting requirements. Under the new law, these penalties are mandatory upon request by the CRD.

Notice and Reporting Requirements

Know Your Rights Act for California Workplaces – SB 294

Under the new Workplace Know Your Rights Act, on or before February 1, 2026, and annually thereafter, employers must provide written notice to all employees of various labor rights, including rights to workers’ compensation benefits, constitutional rights when interacting with law enforcement in the workplace, and protection against unfair immigration-related practices such as notice of immigration inspections. The labor commissioner is tasked with publishing a compliant notice on or before the first of the year.

Employers must also notify an employee’s designated emergency contact if the employee is arrested or detained on the worksite or while performing job duties.

Penalties include up to $500 per employee for failing to provide Workplace Know Your Rights notices and a daily $500 penalty, capped at $10,000, for not notifying emergency contacts of an arrest or detainment.

Updated Cal-WARN Notice Requirements – SB 617

California’s Worker Adjustment and Retraining Notification (Cal-WARN) notices for mass layoffs, terminations, or relocations must also include information on CalFresh food assistance programs and any workforce development boards or entities the employer will coordinate services through, starting January 1, 2026.

For a more in-depth analysis on the new Cal-WARN notice requirements, see here.

New 30-Day Data Breach Disclosure – SB 446

Starting January 1, 2026, businesses must notify consumers of data breaches within 30 days of discovery or notification of the breach and disclose large data breaches affecting more than 500 California residents to the state attorney general within 15 days. While SB 446 replaces the current flexible timelines with a strict 30-day breach notification rule, exceptions apply for legitimate law enforcement needs or as necessary to determine the scope of the breach and restore the reasonable integrity of the data system.

Signed into law this October, businesses have only a few months to review and update incident response and notification procedures to comply with the new statutory timeframe.

Wage and Labor Disputes

Expanding the Jurisdiction of California’s Labor Board – AB 288*

As the National Labor Relations Board (NLRB) continues without quorum to decide labor cases before it after President Trump’s firing of Chair Gwynne Wilcox, AB 288 expands the jurisdiction of California’s Public Employment Relations Board (PERB) to covered private sector employees who petition to enforce their rights under the National Labor Relations Act (NLRA).

Set to take effect January 1, 2026 with a phased rollout through January 1, 2027, the law will permit California’s public sector labor agency to investigate and decide labor disputes and alleged unfair practices cases and oversee union elections in the private sector if the NLRB has “expressly or impliedly ceded jurisdiction.”

*Subject to ongoing litigation: On October 15, 2025, just two weeks after AB 288 was signed into law, the NLRB filed a lawsuit against PERB and the State of California alleging AB 288 is unconstitutional and preempted by the NLRA. It is unclear whether AB 288 will survive the NLRB’s attempt to block the law from going into effect next year.

Increased Enforcement of Wage Laws – SB 261

In addition to expanded workplace regulations, employers will also be met with greater penalties for failing to satisfy employee wage judgments. Effective January 1, 2026, employers that fail to pay wage-related judgments within 180 days will face mandatory court costs and attorneys’ fees, penalties up to triple the outstanding judgment amount, and enforcement by public prosecutors permitted to stand in as assignees of employees with unpaid wage judgments.

Employers should audit procedures to resolve unpaid wage judgments within the 180-day satisfaction period to avoid heavy penalties under the new law.

Contracts and Employee Benefits

An End to “Stay or Pay” Contracts – AB 692

AB 692 makes “stay or pay” contracts entered into on or after January 1, 2026 illegal in California. An extension of the prohibition on noncompete contracts, this law prohibits employers from requiring employees to pay certain penalties, fees, or costs if they leave their employment before a set minimum work period. The ban applies to the common use of training-repayment agreement provisions but provides exceptions for separate agreements covering signing bonuses or tuition reimbursements.

Employers should make sure to review employment contracts before the law goes into effect. Violations allow employees to sue for the greater of actual damages or $5,000 plus attorneys’ fees and costs.

Expanded Paid Family Leave for “Designated Persons” – SB 590

Beginning July 1, 2028, workers can take up to eight weeks of paid family leave to care for a designated person, identified under penalty of perjury and attesting to the qualifying relationship.

This law expands eligibility under the existing paid family leave progam to workers who take time off to care for seriously ill “designated persons,” defined as “any care recipient related by blood or whose association with the individual is the equivalent of a family relationship.”

AI Regulation and Extended COVID Protections

Transparency in Frontier AI Act – SB 53

As the first law of its kind, SB 53 attempts to directly regulate the development of artificial intelligence (AI) by establishing mandatory safety incident reporting and requiring large developers of “frontier” AI models to publish and maintain a framework of safety protocols, risk assessment, and management practices. Noncompliance carries civil penalties of up to $1 million per violation.

The oversight and regulation of these large AI models is likely to impact the companies that use them. The law also provides whistleblower protections for employees who report violations or safety threats. Developers are prohibited from enforcing nondisclosure agreements or retaliating against employees who raise these concerns, and they must establish an internal anonymous reporting process.

For a more in-depth analysis on AI litigation and regulatory trends, see here. 

2027 Extension on Pandemic Worker Recall Rights – AB 858

The rehire and retention protections for certain hospitality and airport service workers laid off for COVID-19-related reasons have been extended until January 1, 2027. Two months before the pandemic worker reinstatement rights were set to expire on December 31, 2025, Governor Gavin Newsom signed this second extension into law on October 3.

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If you have any questions, or would like additional information, please contact one of the attorneys on our Labor & Employment team.

You can subscribe to future advisories and other Alston & Bird publications by completing our publications subscription form.

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What Happened?

Following the path of nine other states that have enacted laws to regulate commercial non real estate secured financing, on May 28, 2025, the Texas legislature passed a “commercial sales-based financing” bill, known as House Bill 700[1], and the Governor Greg Abbott signed the bill into law on June 20, 2025. Unlike other state laws that have required providers of commercial financing to make Truth-in-Lending-type disclosures to borrowers, and in some instances, register with state authorities, the Texas legislation caps the cost of “sales-based financing,” which is defined as “a transaction that is repaid by the recipient to the provider of the financing as a percentage of sales or revenue, in which the payment amount may increase or decrease according to the volume of sales made or revenue received by the recipient or according to a fixed payment mechanism that provides for a reconciliation process that adjusts the payment to an amount that is a percentage of sales or revenue.” Most provisions of the law become effective on September 1, 2025, except for the provider and broker registration requirement, discussed below, which takes effect on December 31, 2026.

Why It Matters

Notably, the Texas legislation includes a provision that prohibits sales-based financing providers from establishing a “mechanism for automatically debiting a recipient’s deposit account” unless the provider obtains and perfects a security interest in the recipient’s account with “first priority” against the claims of “all other persons.” As a practical matter, no provider is likely to meet this standard. Under the Uniform Commercial Code, a security interest in a deposit account can only be perfected by entering into a deposit account control agreement with the bank at which the account is maintained. These control agreements typically provide a creditor with lien priority against the claims of other secured creditors, but not against the claims of the bank itself. Because the claims of the bank will be superior to the claims of the sales-based financing provider, no provider would be able to satisfy the Texas requirement that the provider’s interest have priority against the claims of “all other persons.” This requirement is significant because most sales-based financing transactions require payment via automated clearing house (ACH) debit entries to the recipient’s deposit account. It is unclear whether providers will be able to devise alternative payment methods or whether such alternative payment methods will negatively impact the performance of sales-based finance transactions.

Further, the legislation amends Texas law to exclude “sales-based financing” from Texas’s usury exemption. Under the new legislation, fees and charges paid or charged under a “sales-based financing” transaction count as interest under state usury law, regardless of the amount financed. However, the legislation does not require disclosure of an APR or interest rate, and it is not clear how the interest rate of a “sales-based financing transaction” would be determined for usury purposes.

The Texas legislation requires providers who extend specific offers of commercial “sales-based financing” of less than $1,000,000 to disclose to Texas-based recipients, among other things, (1) the total amount of the financing; (2) the disbursement amount; (3) the finance charge; (4) the total repayment amount; and (5) the estimated period for the periodic payments to equal the total repayment amount under the terms of the financing.

The legislation requires financers (i.e., “providers”) and brokers of “sales-based financing” transactions to register with the Texas Office of Consumer Credit Commissioner and to renew their registrations annually by January 31. The legislation exempts from its requirements banks (specifically including out-of-state banks) and their subsidiaries and affiliates, certain companies that provide tech services to exempt entities, lenders regulated under the Farm Credit Act, real property secured sales-based financing, true (operating) leases, and certain a commercial sales-based financing agreement or commercial open-end credit plan of $50,000 or more.

Again, most provisions of the law become effective on September 1, 2025, except for the provider and broker registration requirement, which takes effect on December 31, 2026.

A person who violates the law would be subject to a civil penalty of $10,000 for each violation, but the legislation does not authorize a private right action for violations arising under the law.

What To Do Now

The Texas legislation, while part of a growing trend of augmented state regulation of commercial non real estate secured lending, is far more burdensome than other similar state laws enacted to date, and at first blush, absent an exemption, may render it extremely difficult, if not impossible, to conduct sales-based financing in Texas. Only time will tell whether lenders can devise alternative financing methods that are not ensnared by the legislation or whether the legislature amends the law.

[1] https://legiscan.com/TX/text/HB700/2025

 

What Happened?

On July 30, 2025, the President’s Working Group on Digital Asset Markets released a comprehensive Digital Assets Report, outlining a national strategy for cryptocurrency and blockchain. Declaring a departure from the prior Administration’s approach, the report recommends that regulators adopt pro-innovation rules toward digital assets and blockchain technology. It addresses market structure, banking, payments, stablecoins, taxation, and anti-money-laundering (AML) measures.

The Working Group was established in the President’s January Executive Order, Strengthening American Leadership in Digital Financial Technology, which declared support for the responsible growth and use of digital assets, blockchain technologies, and related technologies across all sectors of the economy.

Why Is It Important?

The report marks a significant shift in U.S. policy, and it is designed to position the United States as a global leader in digital finance. It outlines lawful digital asset use, including self-custody rights, and promotes U.S. dollar-pegged stablecoins to strengthen dollar dominance globally (while rejecting a U.S. central bank digital currency). The recommended framework includes tools that include safe harbors, innovation exemptions, and updated tax and banking rules.

On July 31, 2025, SEC Chair Paul Atkins amplified the report’s significance in a speech, American Leadership in the Digital Finance Revolution, calling it a “blueprint to make America first in blockchain and crypto technology.” He characterized the potential of digital asset technology as a new area in the history of financial markets and said that regulatory clarity could unleash unprecedented capital formation and consumer choice.

What To Do Now?

The regulatory tide has clearly shifted for companies who wish to explore or engage in the digital asset ecosystem. As always, sound compliance and governance structures will be key as regulatory expectations evolve. Additionally, engaging with regulators and industry groups to craft safe harbors and sandbox programs will be crucial to ensure alignment with evolving regulatory approaches for AML, banking, tax, and digital identity standards.