CA Employment Law Update: What employers need to know
California employers will begin 2027 with a set of new employment-law obligations. Unlike recent legislative cycles, 2026 did not produce a major wave of new wage-hour or PAGA legislation. Instead, lawmakers focused on emerging workplace issues, including artificial intelligence, employee surveillance, immigration-related retaliation, employment contracts, leave, and workplace safety.
Several of the most significant laws take effect January 1, 2027, while others have later effective dates. Employers should use the remainder of 2026 to identify the changes that require policy revisions, management training, contract updates, or technology audits.
Below are some of the more pertinent and widely applicable pieces of employment-related legislation that were signed into law. However, employers should consult with employment counsel for any enforcement or industry-specific rules and regulations that may be taking effect in addition to these.
AI and workplace surveillance
Perhaps the most significant development of the 2026 legislative session is California’s first substantial legislative package specifically regulating AI in the workplace.
S.B. 947: Human Review of AI-Assisted Discipline and Termination – Effective July 1, 2027
S.B. 947, the “No Robo Bosses Act,” will restrict employers’ use of an automated decision system, known as “ADS,” in connection with employee discipline and termination.
The law prohibits an employer from relying solely on an ADS to make a disciplinary or termination decision. If an employer primarily relies on an ADS output, a human must corroborate the decision using the data that generated the output or other relevant supporting information. The law also restricts using an ADS to infer protected characteristics, or to predict and take adverse action against an employee for exercising legal rights. Employers will have additional notice obligations when an ADS is primarily relied upon for a disciplinary or termination decision.
Violations may result in a $500 civil penalty per violation.
Employers should take stock of attendance systems, productivity software, scheduling tools, performance-scoring programs, camera analytics, and other technology that generate employee classifications, scores, recommendations, or similar outputs. Employers should also develop a meaningful human-review protocol rather than simply having a manager click “approve” on an automated recommendation.
S.B. 951: AI and Cal-WARN – Effective Jan. 1, 2027
S.B. 951 amends California’s Cal-WARN Act for covered workforce reductions in which human employees are being displaced, in whole or substantial part, by AI or other automating technology.
When applicable, the Cal-WARN notice must identify the employee displacement as a “technology displacement” and provide specified information concerning affected positions, the job functions being automated, and the type of AI or automation responsible. The existing 60-day Cal-WARN notice period remains in place.
Violations may result in a $500 civil penalty for each day of violation.
Employers should add an AI/automation question to every workforce-reduction checklist. Employment counsel should be involved early when a restructuring involves replacing employees with automated technology.
A.B. 1883: AI-Powered Employee Surveillance – Effective Jan. 1, 2027
A.B. 1883 prohibits employers, with specified exceptions, from using AI-powered workplace surveillance tools to recognize or make inferences or predictions about an employee's emotional state or to collect “neural data.”
The law is particularly relevant to employers using employee-monitoring software, wearable devices, biometric technology, productivity analytics, or systems marketed as measuring employee “engagement,” “sentiment,” or emotional condition.
Violations may result in a $500 civil penalty per violation.
Employers should ask vendors not simply what data their systems collect, but also what the systems infer from that data.
A.B. 1331: No Workplace Surveillance in Bathrooms – Effective Jan. 1, 2027
A.B. 1331 prohibits employers from using workplace surveillance tools to monitor or surveil employees in workplace bathrooms, subject to limited exceptions. It also addresses employees’ ability to leave surveillance devices outside those areas.
Although California already restricts certain audio and video recording in restrooms, A.B. 1331 addresses a broader category of surveillance tools.
Violations may result in a $500 civil penalty per violation.
Employers should review camera fields of view, access-control systems, tracking devices, and other monitoring technology near restrooms and changing areas.
Employment Agreements: “Stay-or-Pay” law moves to 2027
A.B. 1697 amends 2025’s A.B. 692, which restricted employment agreements requiring employees to assume certain debts, fees, costs, or repayment obligations when their employment ends. A.B. 692 applied to contracts entered into on or after January 1, 2026.
A.B. 1697 immediately delayed the application of those restrictions to covered contracts entered into on or after January 1, 2027, and adds exceptions for specified recruitment and retention programs; certain advanced paid-time-off arrangements; and certain securities, insurance, and investment-adviser agreements.
Employers who use training-repayment agreements, sign-on or retention bonuses, relocation agreements, or similar arrangements should continue to review those agreements and policies for compliance.
Immigration workplace-related conduct
A.B. 2495 significantly expands California's restrictions on unfair immigration-related employment practices beyond what would normally be considered “retaliation.” The law prohibits conduct related to a person’s actual or perceived immigration status that would reasonably tend to dissuade the person from exercising a legal right or induce the person to refrain from exercising a legal right.
A violation may result in a civil penalty of up to $10,000 per violation, per employee or person affected.
A.B. 2495 will take effect January 1, 2027.
Employers should train supervisors not to use immigration status, documentation, immigration authorities, or perceived immigration status as leverage in workplace disputes, attendance issues, wage complaints, or other employment matters.
Discrimination and harassment training
A.B. 2563 creates a more uniform definition of “sex” across California statutes, and relevant to employers, it amends the definition of sex discrimination in the state Fair Employment and Housing Act. Among other things, the measure addresses discrimination based on actual or perceived characteristics, and conformity or non-conformity with sex or gender stereotypes.
Employers should review policies and investigation templates, and provide manager training to ensure consistency with California's expanded definition of sex discrimination.
A.B. 2563 will take effect January 1, 2027.
A.B. 1940, which would have added menopause and related conditions to FEHA's definition of “sex,” was vetoed and therefore is not part of California's 2027 employment-law changes.
Anti-hate-speech training
Starting January 1, 2028, A.B. 1803 requires the sexual-harassment training already mandated for employers with five or more employees to include an anti-hate-speech component. The training must provide practical guidance on recognizing, reporting, and confronting workplace speech that vilifies, humiliates, or incites hatred based on characteristics protected by FEHA.
There is no immediate 2027 training deadline attributable to A.B. 1803, but employers should confirm that their training vendors will incorporate the new material into the 2028 training cycle.
Bereavement leave for “designated person”
Effective January 1, 2027, S.B. 1149 expands California's bereavement leave law to include the death of a “designated person,” who is an individual related to the employee by blood or whose association with the employee is equivalent to a family relationship. Employers may limit an employee to leave for the death of one designated person during a 12-month period.
Employers should update their bereavement leave policies, leave request forms, and manager guidance.
Workplace violence
A.B. 2179 makes workplace violence restraining-order proceedings more accessible by requiring that courts permit remote appearances for parties and witnesses, and electronic filing for covered protective-order proceedings.
This law will take effect January 1, 2028.
The legislation complements California's existing framework for workplace violence restraining orders.
Employers should add workplace violence restraining orders to their workplace-safety response protocols and identify in advance who will coordinate internally or with counsel when a threat requires court intervention.
Employer compliance checklist for 2027 and beyond
Before January 1, 2027, business with employees in California should do the following:
- Audit AI. Create an inventory of AI and automated systems used in hiring, performance management, scheduling, productivity monitoring, discipline, termination, and workforce planning.
- Review surveillance technology. Identify cameras, wearables, biometric systems, productivity software, and other monitoring tools, including technology supplied by third-party vendors.
- Establish human review. Develop a documented process for independent human corroboration of AI-assisted disciplinary and termination decisions before S.B. 947 takes effect.
- Review employment agreements. Audit training-repayment, sign-on bonus, retention, relocation, advanced-PTO, and similar “stay-or-pay” provisions.
- Update leave policies. Add the designated-person provision to bereavement leave policies, and update related forms and systems.
- Retrain managers. Include immigration-related threats and coercion in anti-retaliation training, implement expanded sex discrimination training and anti-hate speech training, and reinforce appropriate responses to employee complaints.
- Review EEO policies. Confirm that discrimination policies and investigation protocols accurately reflect California's sex discrimination requirements.
- Update Cal-WARN procedures. Add an AI/automation analysis to workforce-reduction checklists.
- Review workplace safety procedures. Make sure HR, security, and management know when a workplace violence restraining order may be appropriate.
- Get ready for 2028! If you haven’t already done so, start preparing for the laws that will take effect in 2028, including the hate-speech training requirement and the law expanding remote access to proceedings related to workplace violence protective orders.
If you have questions or would like guidance on ensuring compliance in time for the new year, please contact any attorney in our Escondido, Los Angeles, Orange County, San Diego, or San Francisco offices.
