Under AB 692, repayment agreements of any kind may be largely unenforceable unless they comply with strict conditions, including: 

• Separate written contract with clear disclosure 

• Minimum five-day review period for employees 

• Prorated repayment over a maximum two-year retention period 

• Exclusion of interest or penalties 

• Repayment triggered only by voluntary resignation or misconduct 

• Important: Unless presented at the outset of employment, the carve-out may not provide protection for employers, as agreements introduced later could be considered coercive or conditional 

Employees must also have the option to defer receipt of benefits until the retention period ends. These requirements effectively eliminate traditional cost-recovery tools, requiring employers to rethink retention strategies. 

WERC and Altair Global representatives, including Bet Mansfield, Vice President of Legal Services, held two separate meetings with legislative aides over recent weeks to highlight the mobility industry's reliance on repayment agreements as corporate protectionary measures. While the discussions were constructive, no commitments were made on any changes. The law will take effect on January 1, 2026, without a "look-back" provision—meaning repayment agreements signed prior to that date will remain unaffected. 

Given the complexity and potential compliance risks associated with AB 692, employers should: 

• Engage Legal Counsel Early: Review all existing relocation-related repayment agreements to determine enforceability under the new law. 

• Assess Risk Exposure: Identify agreements that could be voided and evaluate potential financial and operational impacts. 

• Develop Compliant Alternatives: Work with your legal teams to structure permissible agreements or adopt retention strategies that align with AB 692 requirements. 

• Stay Informed: Monitor regulatory updates and guidance from California authorities, as implementing regulations may clarify carve-outs or introduce compliance relief. 

Each option below carries varying degrees of risk and complexity, but could provide temporary solutions until further legislative clarity emerges: 

1. Continue Using Agreements with Limited Enforcement Intent: Agreements could still be signed, but enforcement should be optional. While this approach may raise concerns about discriminatory application, it remains an option.
   
2. Specify Governing Law Outside California: Dictating governing law as a state other than California could mitigate jurisdictional issues, provided there is a sufficient nexus. For example, requiring agreements to be subject to Texas law likely would not be enforceable if neither the client nor the relocating employee has ties to Texas. However, using the headquarters location (so long as it is outside California) could work prospectively to avoid California jurisdiction.
3. Tailor Agreements for California Employees: Revise repayment agreements for California employees to comply with statutory exceptions and anticipate possible legislative modifications in 2026. For instance, incorporate a five-business-day waiting period before signature and structure benefits as deferrable (e.g., employees may opt to receive allowances, household goods, or temporary housing payment benefits concurrent with the move or defer until the retention period ends). Bear in mind that "at the outset of employment" may render this option voidable at the court's discretion where benefits are provided to current employees. 

• Review Current Policies: Audit all relocation-related repayment agreements for compliance risk. 

• Plan for Policy Updates: Consider replacing repayment provisions with retention strategies such as enhanced relocation support, career development opportunities, competitive compensation, and even additional benefits (e.g., bonuses, other incentives) once the retention period ends. 

• Monitor Regulatory Guidance: Stay informed on implementing regulations that may clarify or expand carve-outs for mobility programs. 

Altair will continue to monitor California AB 692 as it moves forward. Contact your Altair Client Partner Experience representative for assistance in reviewing your mobility and training repayment policies. For legal guidance, please contact your legal advisor.