New California Employment Laws for 2027: What Employers Need to Know

On September 30, 2026, Governor Gavin Newsom signed a group of measures that change how California employers use artificial intelligence, handle immigration-related issues, structure repayment agreements, enforce arbitration agreements, and report pay data. He also vetoed several closely watched proposals, including a bill that would have added menopause and other similar issues as disabilities to the Fair Employment and Housing Act (FEHA).

Most of the new laws take effect January 1, 2027. A few work on different timelines as detailed below. Below, we explain what changed, when each law takes effect, and efforts for employers to undertake now.

Artificial Intelligence and Workplace Technology

SB 947 – Automated Decision Systems (“No Robo Bosses Act”)

Operative July 1, 2027. Employers may not rely solely on an automated decision system (ADS) to discipline or terminate employees. ADS is broadly defined and covers tools built on machine learning, statistical modeling or data analytics, not just products marketed as AI. When ADS primarily supports a discipline or termination decision, a human must corroborate its output. The employer must give the employee a written notice that ADS was used. The law also bars using ADS to infer an employee’s protected status under Section 12940 of the Government Code or to predict and take adverse action against a worker for exercising their legal rights. Employees may request a description of the data the system relied on. The Labor Commissioner enforces the law, with civil penalties of $500 per violation. Newsom vetoed a broader version (SB 7) in 2025. For a deeper look, see our earlier post, Robots Can Recommend, But Real People Must Pull the Trigger: Inside SB 947.

Action: Begin inventorying your automated tools that support discipline or termination decisions. Before July 1, 2027, designate a trained human decision-maker who will corroborate ADS output, how that review will be documented, and how the written notice and data-description requests will be handled.

AB 1883 – Emotion Recognition and Neural Data

Effective January 1, 2027. Employers may not use workplace surveillance tools that recognize, infer or predict a worker’s emotional state, or that collect neural data. The law does not prohibit an employer from using a workplace surveillance tool to ensure safety, or otherwise if the tool does not engage in the prohibited uses described above.

Action: Inventory any wearable, productivity or security technology used for safety purposes and document that purpose. Ask vendors to confirm in writing whether any workplace surveillance tool analyzes emotional state or collects neural data and disable or replace those features before year-end.

AB 1331 – Workplace Surveillance (Workplace Bathrooms)

Effective January 1, 2027. Unless directed by a court order, employers may not use workplace surveillance tools to monitor or surveil employees in workplace bathrooms. A “workplace surveillance tool” is broadly defined to include any system, application, instrument or device that collects or facilitates the collection of employee data, activities, communications, actions, biometrics or behaviors other than through direct observation by a person. Examples include video or audio surveillance, continuous time-tracking tools, geolocation, and electromagnetic or photoelectronic tracking. Employees have the right to leave workplace surveillance tools behind when entering a bathroom, except for employees required to be available during meal or rest periods under federal law or existing state law. Limited exceptions include one-time bathroom entry and exit checks, tools an employee voluntarily brings into a bathroom, and nonrecording badges, personal alarms or similar tools without embedded or attached AI that an employer requires employees to keep in their possession on work premises for identification or safety purposes or that are required to access a locked or secured bathroom. Monitoring required by federal or state law or regulation is also permitted. Violations carry civil penalties of up to $500 each.

Action: Employers should audit workplace surveillance tools and policies to confirm that cameras, audio systems, geolocation tools, time-tracking systems, badges and other monitoring technology do not monitor employees in workplace bathrooms. Employers should also review any badges, alarms or other monitoring devices employees are expected to keep with them at work to determine whether employees may leave those devices outside the bathroom or whether a statutory exception applies.

SB 951 – AI-Related Layoff Notices (Cal-WARN)

Effective January 1, 2027. When a mass layoff, relocation or termination is caused “in whole or in substantial part” by AI or automation, the Cal-WARN notice must say so and describe the number, classification and location of the affected positions, the job functions being automated, and the category of technology responsible. The notice must also state at the top that it is a notice of “technology displacement.” The Employment Development Department will publish summaries of these notices. The law does not define “substantial part.” 60-day Cal-WARN notice framework otherwise continues to apply. For additional detail, see our post, When Robots Replace Staff: California’s New AI Layoff Disclosures.

Action: Add an “is AI or automation a substantial cause?” step to your existing Cal-WARN analysis and update your notice templates to capture the new technology-displacement elements.

SB 690 – Website Tracking Lawsuits Under CIPA

Effective January 1, 2027. Private plaintiffs may no longer sue under the California Invasion of Privacy Act’s “pen register” and “trap and trace” provision over common website technologies such as cookies, pixels and analytics tools. Only the Attorney General can enforce that provision. This covers employer websites and careers pages. The law also applies to certain pending claims. However, claims under CIPA’s wiretapping provision (Penal Code § 631) remain available. For additional detail, see our post, What California Businesses Should Know About SB 690 and CIPA Website-Tracking Claims.

Action: Review website cookies, pixels, analytic tools, advertising technologies, and other tracking mechanisms used on your web pages. Do not assume all CIPA exposure is gone - some claims remain available on a wiretapping theory.

SB 923 – Expanded CCPA Deletion Rights

Effective January 1, 2027. The right to delete under the California Consumer Privacy Act now reaches personal information collected “from or about” a person, not just information collected directly from them. Because the CCPA covers employees and applicants, deletion requests may now reach data obtained from background-check, recruiting and HR-technology vendors.

Action: Update your CCPA intake and deletion workflows so they can locate, and address applicant and employee data held by third-party vendors, not just data you collected directly.

Employment Contracts and Arbitration

AB 1697 – Stay-or-Pay Provisions

Effective immediately (urgency statute). California’s ban on “stay-or-pay” repayment provisions now applies only to contracts entered into on or after January 1, 2027. The law also adds new exceptions, including qualifying tuition-repayment arrangements for transferable credentials, certain discretionary sign-on and retention bonuses, specified financial-services recruiting and retention payments, and repayment of advanced paid time off upon voluntary separation. A covered violation exposes the employer to the greater of actual damages or $5,000 per worker, plus injunctive relief and attorneys’ fees. Employers that already rewrote their agreements for 2026 should review them again. See our earlier post, Employers Sprung, Temporarily, From California's Trap Law.

Action: Revise sign-on, retention, training-repayment, relocation and advanced-PTO arrangements to fit within the new exceptions before issuing any agreement dated on or after January 1, 2027.

AB 2155 – Arbitration: Aligning the CAA with the FAA

Effective January 1, 2027. AB 2155 amends the California Arbitration Act (CAA) to provide that an arbitration agreement is unenforceable under state law to the extent it would be unenforceable under the Federal Arbitration Act (FAA). In the past, employers sometimes argued that even where an exception to the FAA prevented an agreement, the CAA independently supported enforcement. AB 2155 attempts to eliminate that argument. The Legislature pointed to the FAA’s transportation-worker exemption and the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) as examples of federal limits now imported into California law, and the statute is written to absorb future federal limitations as well.

Action: Review your arbitration agreements, especially for any workforce that may fall within the FAA’s transportation-worker exemption, and remove reliance on the CAA as an alternative enforcement path where the FAA would not compel arbitration.

Immigration-Related Practices

AB 2495 – Unlawful Immigration-Related Practices

Effective January 1, 2027. This law broadens Labor Code section 1019 in three ways:

• Protections now extend to applicants and former employees, not just current employees.

• It covers conduct that would “reasonably tend to dissuade” someone from exercising a legal right.

• A person’s actual immigration status is irrelevant to whether the employer is liable.

Prohibited practices include requesting more or different verification documents than Federal law requires, misusing E-Verify, threatening to report someone to immigration authorities, and contacting those authorities. Immigration-related comments or questions can create risk even when no formal complaint has been made.

Action: Train recruiters, supervisors and HR staff that immigration-related comments, questions or document demands may expose employers to liability, including as to applicants and former employees, and re-audit your I-9 and E-Verify practices.

Wage and Hour

Minimum Wage Increase

Effective January 1, 2027. California’s general statewide minimum wage rises to $17.40 per hour under the annual inflation-adjustment mechanism, which also increases the minimum salary for exempt employees to $72,384 annually (or $6,032 per month). Local ordinances and industry-specific wages may be higher. Employers should remember that satisfying the new salary threshold alone is not enough to secure an exemption. Employers must also ensure the employee satisfies the job duties test and other requirements specific to any exemption claimed.

Action: Update payroll and confirm all non-exempt pay rates and the salary floor for exempt employees.

AB 2646 – Minimum Wage for H-2A Agricultural Workers

Effective January 1, 2027. This law establishes a $19.75 base hourly wage, which is subject to a cost-of-living adjustment beginning January 1, 2027, and each January 1 thereafter for covered H-2A agricultural workers and corresponding California-resident workers performing substantially similar work by the same employer in the same county during the same time period.

Action: Agricultural employers using H-2A labor should identify corresponding California employees, confirm the applicable adjusted wage rate and update payroll accordingly, and notify affected workers of the change.

SB 1237 – Pay Data Reporting Penalties

Effective January 1, 2027. The maximum penalty for repeated failures to file pay data reports rises from $200 to $1,000 per employee; the penalty for an initial failure remains up to $100 per employee. The Civil Rights Department must also publish the total number of reports filed each year.

Action: Confirm ownership of the annual filing and calendar the deadline well before it is due, given increased penalties for repeated failures.

SB 1316 – Labor Commissioner Document Requests

Effective January 1, 2027. SB 1316 provides that records an employer fails to produce in response to a timely Labor Commissioner request may be excluded – not merely as affirmative evidence, but from being used or relied on at all, including for impeachment, in the administrative or writ proceeding. Employers generally get at least 15 days to respond, with an automatic 15-day extension available on a good-faith request, and similar rules apply in specified public-works proceedings. Final Labor Commissioner award liens may also be renewed for additional 10-year periods.

Action: Treat a Labor Commissioner records request like discovery with an evidentiary cut off: preserve and collect responsive records and request any extension before the deadline, not after.

SB 1444 – Labor Commissioner Service and Misclassification Remedy

Effective January 1, 2027. Represented parties in Labor Commissioner proceedings must provide counsel’s email address and accept electronic service, and must keep that address current while a claim is pending. SB 1444 also amends Labor Code section 226.8 so that civil penalties for willful independent-contractor misclassification, ranging from $5,000 to $15,000 per violation, and $10,000 to $25,000 for a pattern or practice, may be recovered as damages by the employee, the Labor Commissioner or a public prosecutor.

Action: Assign and monitor responsibility for electronic notices in any pending Labor Commissioner matter and continue to treat worker classification as a substantive compliance issue rather than a payroll label.

Discrimination, Leave and Training

AB 2563 – Sex Discrimination: Scope

Effective January 1, 2027. This law adopts a broad, statewide definition of sex discrimination and amends FEHA’s definition of “sex” accordingly, confirming that it reaches discrimination based on gender stereotypes and related characteristics. The Legislature framed the change as declaratory of existing law. (AB 2563 contained alternative provisions that would have expressly added perimenopause, menopause and postmenopause had AB 1940 also become law; because AB 1940 was vetoed, those conditional provisions do not take effect.)

Action: Review EEO and anti-discrimination policy language to ensure it reflects the clarified definition of sex, including gender stereotypes.

SB 1149 – Bereavement Leave for a Designated Person

Effective January 1, 2027. Employees may take up to five days of bereavement leave after the death of a “designated person” – an individual related to the employee by blood or whose association is the equivalent of a family relationship – in addition to the family members already covered. The amount of leave does not increase, and an employer may limit an employee to one designated person per 12-month period. For additional detail, see our post, California Law Broadens Definition of Family Member For Bereavement Leave to Include A ‘Designated Person’.

Action: Update bereavement leave policies and leave-request forms to include designated persons, decide whether to adopt the one-per-12-month limit, and build a process to track designations.

AB 1803 – Anti-Hate Speech Training

Effective January 1, 2028. Required sexual harassment prevention training must also include an anti-hate-speech component, with practical guidance on recognizing, reporting and confronting workplace speech that vilifies or incites hatred based on protected characteristics. The law changes training content; it does not create a new standalone cause of action.

Action Suggestions: Confirm your training will incorporate the new content before the 2028 date and coordinate any 2027 policy updates with the revised training.

AB 2292 – Disability Benefit Certificates

Effective January 1, 2027. Physicians may no longer charge a fee to complete the medical certificates employees need for State Disability Insurance and Paid Family Leave claims.

Action: No direct employer action is required, but HR and leave administrators should be aware that employees can obtain these certificates without a physician fee.

Workplace Safety and Violence

AB 2321 – Cal/OSHA Investigations

Effective January 1, 2027. Cal/OSHA’s Bureau of Investigations gains broader authority over willful violations, and it becomes a misdemeanor to willfully resist, impede or interfere with a Cal/OSHA investigation or a related court order.

Action: Designate who will interface with Cal/OSHA after a serious incident, and train personnel to cooperate with investigators while preserving legal privileges.

AB 1961 – Workplace Violence Restraining Orders

Effective January 1, 2027. Where a threat is directed at a workplace or a location rather than one named employee, an employer may seek a workplace violence restraining order protecting all employees at that location without identifying an individual as the protected party.

Action: Update your threat-response protocol so managers know an employer can pursue a restraining order protecting the workforce broadly, even without a specifically targeted employee.

AB 2179 – Remote Appearances

Effective January 1, 2028. Parties and witnesses may appear remotely in workplace violence restraining order proceedings, and courts must permit electronic filing of specified documents.

Action: Note the 2028 date when planning how to present evidence or witnesses in any workplace violence restraining order proceeding.

Effective Dates at a Glance

Effective date	Law	Topic
January 1, 2027	SB 1316, SB 1444	Labor Commissioner procedure and remedies
Immediately (Sept. 30, 2026)	AB 1697	Stay-or-pay provisions
January 1, 2027	AB 1883	Emotion recognition and neural data
January 1, 2027	AB 1331	Workplace bathroom surveillance limits
January 1, 2027	SB 951	AI-related Cal-WARN notices
January 1, 2027	SB 690	CIPA website tracking suits
January 1, 2027	AB 2155	Arbitration (CAA/FAA alignment)
January 1, 2027	AB 2495	Immigration-related retaliation
January 1, 2027	AB 2563	FEHA: sex / gender stereotypes
January 1, 2027	SB 1149	Bereavement leave: designated person
January 1, 2027	SB 1237	Pay data penalties
January 1, 2027	AB 2321	Cal/OSHA investigations
January 1, 2027	AB 1961	Workplace violence restraining orders
January 1, 2027	AB 2646	H-2A agricultural minimum wage
January 1, 2027	Statewide	Minimum wage rises to $17.40/hour
January 1, 2027	AB 2292	Disability benefit certificates
January 1, 2027	SB 923	Expanded CCPA deletion rights
July 1, 2027	SB 947	Automated decision systems
January 1, 2028	AB 1803	Anti-hate speech training
January 1, 2028	AB 2179	Remote appearances in WVRO proceedings

What This Means for California Employers

Employers should consider taking the following steps:

• Inventory your workplace technology. Identify every tool that monitors employees or informs discipline, termination or scheduling decisions, including features built into HR, timekeeping and productivity software. Confirm none recognizes emotions, collects neural data or monitors restrooms.

• Build a human review process for AI-supported decisions. Before July 1, 2027, decide who will corroborate automated outputs, how that review will be documented, and how required notices will be issued. Ask vendors what data their tools use and whether they can support employee data requests.

• Revisit repayment agreements. Review sign-on, retention and training-repayment provisions against AB 1697’s new timeline and exceptions, especially for agreements entered into on or after January 1, 2027.

• Audit your arbitration program. Confirm your agreements do not rely on the California Arbitration Act to compel arbitration where the FAA would not, particularly for transportation workers and sexual-harassment claims covered by the EFAA.

• Train managers and HR on immigration-related conduct. Make sure recruiters, supervisors and HR staff understand that immigration-related comments, questions or document requests can create liability, even for applicants and former employees. Review I-9 and E-Verify practices.

• Update policies and training materials. Revise anti-discrimination policies to reflect the clarified definition of sex, update bereavement-leave policies for designated persons, and plan for anti-hate-speech content in harassment training before 2028.

• Tighten agency-response and reporting procedures. Establish a protocol for responding promptly to Labor Commissioner record requests, keep electronic-service information current, and confirm pay data reports are filed on time, given the higher penalties for repeated failures.

• Prepare for layoffs involving automation. If a reduction in force is tied to AI or automation, build the required technology-displacement disclosures into Cal-WARN notices.

• Review website tracking and privacy practices. SB 690 narrows one category of CIPA claims, but wiretapping claims remain. Review cookie and pixel use on careers pages, and update CCPA processes to handle broader deletion requests.

• Agricultural employers. Update payroll for the H-2A minimum wage and confirm corresponding California employees are paid at least the applicable rate.

Notable Vetoes

Newsom also vetoed several bills that would have created new obligations for employers:

• AB 1940 – Menopause Discrimination. Would have added perimenopause, menopause and postmenopause to FEHA’s sex discrimination protections and required updated workplace posters.

• AB 2721 – Hotels and Immigration Enforcement. Would have required hotels to notify workers and guests of the presence of federal immigration agents.

• SB 1130 – Wearable Recording Devices. Would have regulated recording with wearable devices without consent.

• AB 1542 – Sensitive Personal Information. Would have generally prohibited, subject to specified exceptions, the sale or sharing of sensitive personal information.

Looking Ahead

Taken together, these laws continue California’s trend toward greater oversight of workplace technology and expanded worker protections. They also give employers some relief on stay-or-pay agreements and website-tracking litigation. CDF will continue to monitor these laws, along with related regulations and court challenges, and will provide timely updates for California employers.

In addition, CDF will hold its annual New California Laws webinar on November 12, 2026, at 10:00 a.m. Pacific to help California employers prepare for 2027. Stay tuned for registration details, and be sure to subscribe to CDF’s blog to receive the webinar invitation and other important updates.

If you have questions about how these new laws affect your workplace, please contact the author or your favorite CDF attorney.