California’s “Stay or Pay” Restrictions and Green Card Reimbursements

California’s AB 692, officially in effect as of January 1, 2026, restricts employers from including in an employment contract, or require as a condition of employment, any provision that requires that a worker repay a debt when they terminate employment.  

The law largely prohibits repayment of costs associated with sponsoring immigrant and non-immigrant visas and permanent resident status. With regard to permanent residency, the practical impact on California employers is relatively limited since existing federal law already prohibits the reimbursement of any costs associated with the labor certification (PERM) application process, the most expensive phase of the green card process.

AB 692’s restrictions only apply to any new agreement entered into on or after January 1, 2026. Agreements executed prior to January 1, 2026 remain valid and subject to the existing legal requirements at the time the agreement became effective.

Jackson Lewis:
California AB 692 and Its Impact on Employer Green Card Reimbursement Agreements

Assembly Bill 692: California Passes Prohibition Against Workers Contracting to Repay Debts