Wake-Up Call for Relocation and Global Mobility Repayment Agreements – CA AB 692

California’s AB 692 Is a Wake-Up Call for Relocation and Global Mobility Programs

Effective January 1, 2026, California Assembly Bill 692 (AB 692) will significantly change how employers may structure employee repayment agreements tied to relocation, training, immigration sponsorship, and other employment-related costs. The law targets so-called Training Repayment Agreement Provisions (TRAPs)—often referred to as “stay-or-pay” clauses—that require employees to repay certain costs if they leave employment before a defined period.

For organizations managing relocation and global mobility programs, AB 692 is not simply an employment law update. It has direct implications for how mobility benefits are designed, documented, communicated, and governed.

Why AB 692 Matters to Mobility Programs

AB 692 broadly prohibits employers from requiring workers to repay many employment-related expenses when employment ends, whether voluntarily or involuntarily. While the law includes limited and narrowly defined exceptions, it places meaningful restrictions on repayment language that has historically appeared in:

• Relocation policies and assignment agreements
• Lump-sum or reimbursed relocation benefits
• Immigration sponsorship arrangements
• Sign-on or retention incentives

The law applies to any new, amended, or renewed agreements entered into on or after January 1, 2026. Even organizations with long-standing programs should take notice, as repayment provisions that were once standard practice may no longer be defensible under California law.

For mobility programs in particular, this is consequential. Relocation benefits, assignment support, immigration sponsorship, and onboarding investments have frequently included repayment triggers tied to tenure, assignment completion, or voluntary resignation. AB 692 defines “debt” to include employment-related costs—meaning repayment obligations for relocation or moving expenses may be treated as prohibited debt for contracts entered into after the effective date.

California Is Not an Outlier

AB 692 reflects a broader national trend aimed at limiting contractual provisions that restrict employee mobility. Several states have already enacted—or are actively considering—legislation that limits or bans stay-or-pay agreements, including New York, Colorado, Indiana, Wyoming, Minnesota, Ohio, and Vermont.

For multi-state employers, this signals a growing compliance and governance challenge. California should be viewed as a leading indicator of where mobility and repayment practices are heading nationwide—not a one-off issue.

What Employers Should Be Considering Now

Although AB 692 does not take effect until 2026, mobility, HR, Legal, and Finance teams should begin evaluating their programs now. Key questions include:

• Do our relocation or assignment programs include repayment triggers tied to tenure or early departure?
• Where are repayment provisions embedded—in policies, offer letters, or assignment agreements?
• Are our programs scalable and compliant across multiple states?
• Are internal stakeholders aligned on how relocation and mobility costs are structured and communicated?

Proactive review can help organizations reduce risk, avoid employee relations challenges, and prevent costly program redesigns under time pressure.

Learn More: Download the Full White Paper

This blog provides a high-level overview only. Our full white paper explores:

• What AB 692 does—and does not—allow
• The limited exceptions employers must navigate carefully
• How similar legislation is emerging across the U.S.
• Specific risks for relocation and global mobility programs
• Practical steps mobility teams should take now

The white paper also includes specific examples of repayment language that may no longer be enforceable and a structured framework for reviewing relocation and mobility policies in light of evolving state and national legislation.

Download the white paper to understand how AB 692—and the broader legislative trend—may impact your organization’s relocation and global mobility strategy.

Future-proof your mobility program. Partner with InterLink to assess relocation policies and repayment agreements, mitigate risk, and ensure your program remains compliant, competitive, and aligned with today’s workforce expectations.