GMS issues guidance on California AB 692 compliance

Global Mobility Solutions has published guidance to help employers review relocation, sign-on bonus and training repayment agreements under California’s AB 692, which took effect Jan. 1, 2026. The resource is aimed at HR and mobility teams facing compliance risk around “stay or pay” clauses, especially in multi-state relocation programs.

Why it matters: - California’s AB 692 voids many repayment and penalty provisions tied to employment separation, creating direct legal exposure for employers that still use older relocation or bonus templates. - Companies with California-based workers or employees moving into the state may face cumulative liability even from a small number of noncompliant agreements. - The new guidance gives HR and mobility teams a practical roadmap for updating relocation programs before more agreements trigger risk.

What happened: - Global Mobility Solutions published new guidance for employers reviewing relocation, sign-on bonus and training repayment agreements under AB 692. - The law took effect Jan. 1, 2026, and applies to contracts entered into on or after that date. - Kelly Rabbitts, chief revenue officer at Global Mobility Solutions, said the issue has caught many relocation programs off guard.

The details: - AB 692 prohibits contract terms that require a worker to repay an employer, training provider or debt collector if employment ends. - The law also bars penalties, fees or costs tied to separation. - The statute covers sign-on bonuses, tuition reimbursement, relocation advances and other front-loaded benefits with repayment terms. - Agreements signed since Jan. 1, 2026 that contain prohibited language are void and can expose employers to statutory damages and attorneys’ fees. - Violations can trigger a private right of action. - Damages can equal the greater of actual damages or $5,000 per affected worker, plus attorneys’ fees. - GMS says the law reaches offer letters, relocation agreements, bonus repayment clauses, side letters and informal repayment understandings tied to relocation benefits. - The guidance says employers should audit offer letters, relocation agreements and bonus repayment clauses signed since Jan. 1. - GMS recommends removing or rewriting prohibited terms and updating standard templates for future use. - The guidance also flags narrow exceptions, including certain apprenticeship and government loan forgiveness programs. - GMS says companies with workers in multiple states should build California-specific carve-outs into standardized relocation documentation.

Between the lines: - Many employers created relocation policies before AB 692 existed, so older language may still include the clawback terms the law now voids. - Multi-state employers have often relied on one national template, but AB 692 weakens that approach for California hires. - GMS frames the rule as part of a broader move to limit employer leverage over departing workers, with other states showing early interest in similar restrictions.

What's next: - Employers with California relocation programs will need to review agreements already in circulation and update templates going forward. - GMS suggests treating the review as an ongoing compliance process, not a one-time cleanup, because similar rules could appear in other states. - For employers with many California transfers or hires, the cost of waiting may rise quickly as more agreements are signed under the new law.