State Advocacy Work Heating Up in California

• CA PHIT Act (AB 2533) This bill makes fitness more affordable by excluding employer-provided fitness benefits from an employee's taxable gross income. By treating fitness facility memberships and fitness class expenses as tax-free perks, it encourages employers to subsidize these costs and ensures employees don't pay state income tax on the value of these services. The bill has been moved out of committee after a hearing on April 6.

• CA Cold Spa Modernization Act (AB 2330) This legislation eliminates outdated requirements to drain and fill cold spas after every use, build cold spas in-ground, and require lifeguards. It makes it easier to obtain cold spa permits, and outlines a clear compliance checklist for members to follow California state law. Hearing date TBD.

• CA Price Caps Bill (AB 2402) HFA is a co-sponsor of this bill, which eliminates the annual $4,400 price cap on multi-service health club memberships. Hearing scheduled for 9 a.m. on April 14.

Sacramento Advocacy Fly-In

To help draw attention to the bills and rally industry supporters to take action, HFA is hosting the first-ever Sacramento Advocacy Fly-In on May 18 to 19. This is the first state-level fly-in hosted by HFA and will include:

• Assembly floor resolution presentation;

• Legislator luncheon and reception, where HFA will present its California Legislators of the Year Award;

• A group workout in the morning; and

• A full day of meetings with legislators who serve on the tax and health committees that are considering HFA-supported legislation.

HFA has secured a floor resolution in the California Assembly, to be introduced by Assembly member Philip Chen, for National Physical Fitness and Sports Month, as well as a possible proclamation from Gov. Gavin Newsom.

Also, HFA is engaged and commented on the 2026 California PAGA (Private Attorneys General Act). HFA provided oral testimony during the April 9th hearing and will be submitting written testimony soon. PAGA is a California law that allows employees to sue employers and collect penalties on behalf of the state for labor code violations. Although intended to enforce labor standards, PAGA has become a vehicle for predatory litigation targeting the fitness industry.

HFA advocacy seeks to influence PAGA rulemaking by:

• · If a PAGA claim doesn't meet the legal requirements, there should be a way to get it dismissed—right now that mechanism doesn't exist;

• If an employer settles a PAGA claim, that should be the end of it—they shouldn't face another PAGA suit over the exact same conduct;

• Raise the employee threshold to qualify for a PAGA resolution period—the current proposal only allows small facilities to qualify to resolve PAGA claims without litigation, leaving mid-size and large fitness facilities without that option; and

• The Agency should issue clear PAGA guidance on how fitness facilities can document rest period compliance—right now there's no reliable way to prove breaks were given, which makes fitness facilities easy targets.