What are the top California state worker stories of 2026?
Significant changes are coming to the Golden State in 2026 – and some of those shifts will likely have major impacts on California’s more than 240,000 state workers.
Voters will elect a new governor in November who will oversee the vast majority of state departments that employ public employees. How will the new administration approach future labor negotiations with the unions representing those workers?
Gov. Gavin Newsom will again try to roll out his return-to-office order that faced significant pushback from his employees. Will unions be able to successfully negotiate a better telework deal for their members?
Newsom’s final year in office will be shaped, in part, by how his administration deals with California’s growing budget problem. How could California’s deficit affect salary negotiation with the largest representative of state workers set to begin this year?
The Sacramento Bee will be following these state worker stories and more in the coming year. Read more below about what to expect from 2026.
Who will be state workers’ next boss?
At least 10 Democrats and Republicans have already jumped into the race to replace Newsom.
Several high-profile California politicians, including Senator Alex Padilla and former Vice President Kamala Harris, said they don’t plan to run, which has left the race without a clear favorite.
Several polls in recent months have put Republican candidates former Fox News host Steve Hilton and Riverside Sheriff Chad Bianco ahead in the race, but Democratic strategists have said it was extremely unlikely that two GOP potentials would beat out liberals in California’s top-two primary system.
The Democratic candidates include Rep. Eric Swalwell, former Rep. Katie Porter, billionaire environmentalist Tom Steyer, State Superintendent of Public Instruction Tony Thurmond, former Los Angeles Mayor Antonio Villaraigosa, former Health and Human Services Secretary Xavier Becerra, former Assembly leader Ian Calderon, and former state Controller Betty Yee.
The impacts of the next governor on state workers will be felt in how the new administration approaches negotiations with the 21 bargaining units, many of which will hammer out new contracts in 2027, when California’s next leader takes over.
During an August forum hosted by SEIU Local 1000, gubernatorial candidates were asked about their opinion of remote work for state employees. The candidates who responded were split over the issue.
How will the debate over telework play out?
Likely the most-watched story of 2026 for state workers will be the outcome of Newsom’s return-to-office order.
The saga began in 2024, when state employees working from their homes full-time were called to offices two days a week. Last year, the governor tried to increase the number of in-office days to four only to face fierce resistance from his employees and their labor representatives. He backed off, postponing his mandate until July 2026.
State workers and their unions have vowed to keep up the fight this year. In March, unions will begin discussions with the Newsom administration about how Newsom’s directive will be rolled out.
But they’ll likely face stiff opposition from the governor who hasn’t changed his position that “in-person work would improve the state workforce’s collaboration, professional development, and efficiency,” a Newsom spokesperson recently said when asked about upcoming telework negotiations.
Will state leaders address California’s budget problem?
This Friday, the Newsom administration will present its 2026-27 budget proposal. In that presentation, the administration will have to address the $18 billion shortfall anticipated by the nonpartisan Legislative Analyst’s Office. The administration is expected to release its estimate of the budget problem later this week, which is likely to differ.
In her last cash report of 2025, State Controller Malia Cohen warned that recent positive revenues, largely driven by the artificial intelligence sector, may be obscuring a broader, negative fiscal reality for the Golden State.
“The Governor, the Legislature, and my office all have difficult decisions ahead. Even as receipts come in above projections, the state is still facing ongoing deficits that are expected to widen over the next few years. This moment calls for discipline,” Cohen said in a December statement.
The controller said leaders need to reduce spending and limit the state’s reliance on internal borrowing to rebuild fiscal reserves. Last year, the administration took several measures to reduce employee compensation costs, but some of those actions increased future fiscal liabilities.
How will AI change state workers’ jobs?
Newsom has continued to embrace the use of artificial intelligence in state government since he signed an executive order in 2023 that encouraged agencies to study how the technology could be used by state employees.
Last year, those efforts manifested in the form of several pilot programs that departments rolled out. The Newsom administration announced in December a California-specific version of ChatGPT (and other AI models) that department employees can use to more easily answer questions about state government. Earlier in the year, the California Department of Tax and Fee Administration began using an internal AI assistant to help staff more quickly answer tax questions.
These projects stem from Newsom’s vision of making state government more efficient, but it’s unclear at this point what state workers think of the new tools. Already, at least one union has raised concerns about how AI technology could impact the workload of employees and the quality of public services if there is an expectation that workers’ output increases.
What will SEIU Local 1000 secure in 2026 contract?
The largest representative of state workers, SEIU Local 1000, is the only union meeting with the Newsom administration at the bargaining table to draft a new contract this year.
Last year, all 21 bargaining units agreed to side letters with the administration to cut down on employee compensation costs. Because of those agreements, some labor leaders decided to postpone negotiations that were scheduled to start this year until 2027, due to the dismal budget conditions.
Anica Walls, SEIU Local 1000 president, said the union will fight for improvements to worker pay despite the poor budget outlook. Walls added that telework will also be a major focus of negotiations between the union and the administration, though a significant number of union members are not eligible to work remotely.
“We have one more year with this administration,” Walls said. “I would hope that we could work together more closely on this issue, so we are not on opposite sides during a tough budget year.”
This story was originally published January 6, 2026 at 10:38 AM.
