If your organization relocates employees to or within California, a significant new law will affect how relocation repayment agreements are structured beginning in 2026.
Starting January 1, 2026, California Assembly Bill 692 (AB 692) generally prohibits employers from requiring employees to repay relocation costs or benefits solely because they resign or are terminated.
For HR leaders, global mobility teams, and corporate relocation decision-makers, this change may require proactive relocation policy updates and legal review.
What Is California AB 692?
California Assembly Bill 692 introduces new restrictions on employer repayment agreements in California.
Under AB 692:
- Employers may not require repayment of costs or benefits solely due to resignation or termination
- The law applies only to agreements entered into on or after January 1, 2026
- The statute is not retroactive
- Agreements signed before that date are not affected
Because the language of the law is broad and includes financial penalties for noncompliance, employers with California-based employees should begin reviewing their relocation repayment structures now.
How AB 692 Impacts Relocation Repayment Agreements in California
Many employer-sponsored relocation programs include repayment or “clawback” provisions to protect the company’s investment if an employee leaves within a defined period.
Under AB 692, these provisions may no longer be enforceable in certain circumstances.
Relocation benefits that may be affected include:
- Moving and transportation expenses
- Temporary housing and corporate housing costs
- Home sale and home purchase assistance
- Lump-sum relocation payments
- Reimbursements and direct bill expenses
- Other mobility-related financial benefits tied to continued employment
Organizations relying on relocation repayment agreements in California should assess whether their current policies align with the new legal framework taking effect in 2026.
Why This Matters for Relocation Management and Corporate Mobility Programs
For companies operating nationwide, California often sets the pace for employment-related compliance requirements. This new California relocation law could require:
- Revisions to relocation policy documents
- Updates to repayment agreement templates
- Adjustments to cost projections and budgeting
- Administrative process changes for new transferees
- Coordination between HR, legal, and relocation providers
Early planning is essential to avoid disruption to talent mobility programs.
Recommended Next Steps for Employers
To prepare for AB 692 and protect your relocation program:
- Conduct a relocation policy review focused on repayment and clawback language
- Identify California-based relocations or employees governed by California law
- Consult legal counsel to assess enforceability and compliance risk
- Update documentation and onboarding processes before issuing agreements in 2026
You can review the full statute on the California Legislative Information website.
Because penalties may apply for noncompliance, employers should not delay reviewing their agreements.
How MoveCenter Supports Compliance-Ready Relocation Programs
As a full-service Relocation Management Company (RMC), MoveCenter partners with HR and mobility teams to ensure relocation programs remain aligned with evolving regulatory requirements.
While MoveCenter does not provide legal advice, we support:
- Administrative updates to relocation workflows
- Implementation of revised repayment agreement processes
- Communication planning for policy changes
- Coordination between internal stakeholders and external advisors
Our goal is to help you maintain a compliant, competitive, and employee-focused relocation program — even as legislation evolves.
Preparing for California Relocation Compliance in 2026
California AB 692 represents a meaningful shift in how employee relocation repayment agreements may be structured moving forward.
Proactive review in 2025 will help ensure your organization is ready for agreements executed on or after January 1, 2026.
If you would like to discuss how this law may affect your corporate relocation program, MoveCenter is available to support your next steps.
