Understanding Career Training Compliance Under California AB 692

California’s AB 692 law, effective January 1, 2026, brings new rules about how employers and staffing agencies handle career training costs. Many organizations want to offer optional training or certifications to help workers grow professionally. But they worry about crossing legal lines that could lead to penalties. This post explains what AB 692 allows and prohibits, so you can confidently offer voluntary career training without risking compliance issues.

Optional career training certificate on desk

What AB 692 Means for Career Training Costs

AB 692 focuses on protecting workers from being forced to repay training costs or pay fees tied to their employment status. The law targets practices that:

• Require workers to pay back training costs if they leave a job

• Charge fees when workers separate from employment

• Include contracts that penalize workers for leaving

  
  

The key point is that AB 692 does not prohibit offering optional career training or certifications at a discounted rate to registered participants. You can allow workers to voluntarily pay for additional training as long as it is clearly separate from their job placement or employment.

Why Voluntary Training Is Allowed

California law distinguishes between employer-imposed training and voluntary education. The difference depends on whether the training is a condition of work or simply an optional opportunity.

You are compliant if:

• Training is optional and not required by clients or law

• Workers do not need the training to be placed or stay eligible for work

• There are no negative consequences for declining the training

• The training agreement is separate from staffing or placement contracts

• The training is marketed as career advancement, not onboarding

  
  

This means you can offer career development courses or certifications that workers pay for themselves, without tying it to their job status.

What Is Not Allowed Under AB 692

Certain practices clearly violate AB 692 and put employers or staffing agencies at risk:

• Making training a requirement before placement

• Suggesting workers are more likely to get placed if they complete training

• Bundling training fees with registration or placement fees

• Imposing penalties or repayment obligations if workers leave

  
  

Even if the employer’s intent is good, how the training is perceived matters. If workers feel pressured or believe their job depends on paying for training, it could be a violation.

The Key Legal Test: Condition of Work

California looks beyond labels and focuses on the function of the training. The question is whether the training is a condition of employment or placement.

To pass this test, all these must be true:

• Training is optional

• Not required by clients or law

• No adverse consequences for declining

• Separate agreement and payment process

• Marketed clearly as voluntary career advancement

  
  

If any of these are missing, the training could be seen as a condition of work, triggering AB 692 restrictions.

Practical Examples of Compliance

Here are some examples to clarify what is allowed and what is not:

Allowed

• A staffing agency offers an optional certification course at a discounted rate. Workers can choose to pay for it to improve their skills. The course is not required for placement, and workers sign a separate agreement.

• A company provides access to online professional development classes. Participation is voluntary, and there is no impact on job eligibility or placement.

  
  

Not Allowed

• A staffing firm requires workers to complete a safety certification before any assignment. Workers must pay upfront, or they cannot be placed.

• A contract states workers must repay training costs if they leave within six months.

• Training fees are included in the registration cost without a clear option to decline.

  
  

How to Offer Voluntary Training Safely

To stay compliant while supporting career growth, follow these best practices:

• Clearly communicate that training is optional and not required for placement

• Use separate agreements and payment processes for training

• Avoid language that implies training affects job eligibility

• Do not bundle training fees with other costs

• Ensure no penalties or repayment obligations are tied to training

• Market training as a way to advance careers, not as onboarding or job requirements

  
  

Preparing for AB 692 Implementation

With AB 692 coming into effect soon, organizations should review their training and staffing policies. Conduct an audit to identify any training that might be perceived as mandatory or tied to employment. Update contracts and marketing materials to clarify the voluntary nature of career development offerings.

Training providers and staffing agencies can also educate workers about their rights under AB 692. Transparency builds trust and helps workers make informed decisions about optional training.

Summary

California’s AB 692 protects workers from forced repayment of training costs and fees tied to job separation. It does not stop employers or staffing agencies from offering optional career training that workers pay for voluntarily. The law’s focus is on whether training is a condition of work.

To comply:

• Keep training optional and separate from placement

• Avoid penalties or repayment obligations

• Market training as voluntary career advancement

  
  

By following these guidelines, you can support professional growth while respecting workers’ rights under AB 692.