Gov. Gavin Newsom’s September 30 deadline to sign or veto legislation brought a new slate of employment laws governing artificial intelligence, discrimination, wages, leave and other workplace issues. Many take effect in 2027 and will require California employers to review existing policies, practices and workplace technology.
AI dominated much of the discussion in Sacramento, reflecting its rapid adoption by employers and the growing legal questions surrounding automated workplace decisions, employee monitoring and job displacement. Outside the AI spotlight, lawmakers also made consequential changes to bereavement leave, harassment-prevention training, immigration-related retaliation and employee repayment agreements.
Below are our selected top-priority key changes, what they mean for employers and practical steps to prepare. Unless otherwise noted, the new requirements take effect January 1, 2027.
Beginning July 1, 2027, Senate Bill 947 prohibits employers from relying solely on an automated decision system, or ADS, to discipline or terminate an employee. When an ADS output is the primary basis for the decision, a human reviewer must corroborate it using the underlying data or other relevant supporting information.
An ADS is essentially an AI or data-driven tool that helps an employer make decisions about employees. For example, a system might analyze attendance, productivity or performance data and produce a score, flag an employee for discipline or recommend termination. The law does not cover ordinary tools such as databases, calculators, firewalls or antivirus software.
If an ADS output is the primary basis for discipline or termination, a human must independently review the underlying data or other supporting information, such as supervisory evaluations, personnel records, employee work product, peer reviews or witness interviews. For example, if software flags an employee for poor performance, a manager could not simply accept that result and terminate the employee. The manager would need to review the relevant evidence and confirm that the automated output is supported. If the output cannot be corroborated, or is inaccurate, incomplete or misleading, the employer may not rely on it. A rubber-stamp approval would not satisfy the statute.
If an employer primarily relies on an ADS to discipline or terminate an employee, it must also provide a separate written notice when communicating the decision. The notice must disclose the employer’s reliance on the ADS, state that a human reviewed and corroborated the output, provide a human contact for additional information and advise the employee of the law’s anti-retaliation protections. Employees may also request a meaningful, objective description of their own data used by the ADS.
The law also bars employers from using ADS to infer protected status or to predict that an employee will exercise a legal right and then take adverse action on that basis.
For employers, the practical task before July 1, 2027, is to identify where automated tools influence discipline or termination, decide who will perform the required corroboration, document that review and prepare the required notices and data-request process.
Senate Bill 951 adds new disclosure requirements to California’s Worker Adjustment and Retraining Notification Act, or Cal/WARN, when AI or other automated technology contributes to a covered mass layoff, relocation or termination.
SB 951 does not create a new WARN trigger whenever an employer automates work or stops hiring. Instead, when an employer is already required to issue a Cal/WARN notice and the workforce action was caused in whole or in substantial part by AI or other automated technology replacing or automating jobs, the employer must provide additional information about the technology’s role.
For example, if an employer replaces part of its customer-service operation with AI and the resulting layoffs trigger Cal/WARN, the notice must identify the number and types of jobs affected, where those employees worked, the job functions being automated and the category or type of technology involved. The notice also must state: “This notice is for a technology displacement.”
The existing 60-day Cal/WARN notice period and enforcement framework remain in place. Coverage turns on the statute’s covered-establishment and workforce-event requirements, so employers should assess the particular facility and planned action rather than rely on company-wide headcount alone.
Employers should assess early whether AI or automation substantially contributed to a potential Cal/WARN event and update WARN templates to include the required disclosures before Jan. 1, 2027.
Assembly Bill 1331 expands California’s existing restrictions on workplace bathroom surveillance beyond cameras and microphones to newer forms of employee monitoring.
California law already generally prohibits public and private employers from making audio or video recordings of employees in restrooms, locker rooms and employer-designated changing rooms. AB 1331 extends that privacy protection by prohibiting employers from using a broader category of “workplace surveillance tools” to monitor employees inside workplace bathrooms.
The broader category includes audio and video recording systems, as well as time-tracking tools, geolocation systems and technology that collects employee communications, biometrics or behavior. Employers generally may not use those tools to monitor employees inside a workplace bathroom, and employees generally have the right to leave surveillance devices behind before entering.
The statute expressly permits checks of one-time bathroom entry and exit. It also provides exceptions when an employee voluntarily brings a device into a bathroom, or carries a device required for identification, safety or access to a secured bathroom. For the required-device exception, the device cannot detect or record audio or video or contain physically embedded or attached AI. Existing restrictions on restroom audio and video recording remain in place.
Violations may carry penalties of up to $500 per violation, enforceable by the Labor Commissioner or public prosecutors.
Employers should review badges, wearables, geolocation devices and other monitoring technology employees may carry into restrooms before Jan. 1, 2027.
Assembly Bill 1883 prohibits employers from using a workplace surveillance tool that uses AI to recognize, infer or predict an employee’s emotional state, or to collect neural data. The law applies to both private and public employers.
For example, AI tools may analyze facial expressions, tone of voice, heart rate or similar signals in an attempt to determine whether an employee is stressed, angry or engaged. Neural-monitoring technology measures activity in the central or peripheral nervous system; the statute’s definition excludes information inferred from nonneural data.
AB 1883 does not prohibit all AI-enabled monitoring. Employers may continue using tools for safety or other purposes if they do not perform the prohibited functions. A product’s safety, wellness or productivity label does not determine whether its features comply.
Violations may carry penalties of up to $500 per violation. The Labor Commissioner and public prosecutors may enforce the law.
The precise scope of the law remains somewhat unsettled. In his Sept. 30 signing statement, Newsom said AB 1883 “lacks key definitions,” which may create confusion about which workplace surveillance tools are covered. He encouraged lawmakers to clarify the measure to protect employees from harmful surveillance without preventing employers from using beneficial technology for security or other legitimate purposes.
Employers should review AI-enabled monitoring, wellness, productivity and safety tools to determine what employee information they collect and whether they attempt to infer emotional states or collect neural data before Jan. 1, 2027.
Assembly Bill 2495 broadens California’s prohibition on unfair immigration-related employment practices. Existing law already prohibits practices such as threatening to contact immigration authorities or improperly demanding additional work-authorization documents for retaliatory purposes.
The new law extends protections to the exercise and attempted exercise of workplace rights under local, state or federal statutes and regulations. It also prohibits conduct related to perceived immigration status that would reasonably discourage someone from exercising those rights, or pressure someone to do something they have a legal right to refuse to do.
For example, a manager who threatens to contact immigration authorities to stop an employee from asking about unpaid overtime can violate the law even before the employee files a wage complaint. Violations can carry a civil penalty of up to $10,000 per employee or person per violation, payable to the affected person, in addition to other remedies.
The employee’s actual immigration status is irrelevant, and protections include applicants and former employees.
Employers should update anti-retaliation policies, train managers on immigration-related threats and comments, and review I-9 and E-Verify practices. Federal employment-verification requirements continue to apply.
Signed September 30, 2026, and effective immediately, Assembly Bill 1697 changes the both the timing and exceptions for California’s restrictions on employment-related repayment provisions, sometimes called “stay-or-pay” provisions. The restrictions enacted through AB 692 now apply to contracts entered into on or after January 1, 2027, rather than January 1, 2026. AB 1697 also makes the prior provisions inoperative for 2026 and moots pending claims based on alleged violations occurring between January 1 and September 30, 2026.
The law also adds conditional exceptions for certain government-funded recruitment and retention programs, repayment of advanced paid time off upon voluntary separation, and specified securities and insurance affiliation agreements. The advanced-PTO exception requires the repayment terms to be disclosed separately, caps the repayment obligation at 40 hours and prohibits interest. B 1697 also broadens the existing exception for certain discretionary or unearned bonus payments by removing the requirement that the payment be made at the outset of employment. Those bonus agreements remain subject to detailed requirements, including a separate agreement, notice of the right to consult an attorney, proration and limits on the retention period.
Employers should review signing bonuses, relocation and training repayment agreements, and advanced-PTO policies before 2027. The new exceptions do not make every repayment provision enforceable; wage-deduction, expense-reimbursement and other applicable laws still require separate analysis.
Assembly Bill 2563 standardizes the meaning of “sex discrimination” across California law, including the Fair Employment and Housing Act.
Existing law already protects against discrimination based on sex, gender identity and expression, sexual orientation, pregnancy and related characteristics, but those protections are defined differently across various statutes. AB 2563 creates a common definition and generally requires the broader protection to control when laws conflict.
The definition covers sex and gender stereotypes, gender identity and expression, sexual orientation, pregnancy and related medical conditions, reproductive health decision-making, and variations in sex characteristics. Pregnancy-related conditions include childbirth, abortion, lactation, miscarriage, fertility and contraception.
The Legislature characterized the measure as a clarification of existing law, not an expansion of existing rights or duties. AB 2563 takes effect Jan. 1, 2027.
Employers should review equal employment opportunity and harassment policies and ensure manager training reflects the statute’s protections.
Senate Bill 1149 expands California’s bereavement leave law to cover a “designated person” in addition to the family members already protected under existing law.
Current law generally gives eligible employees up to five days of job-protected bereavement leave after the death of a spouse, child, parent, sibling, grandparent, grandchild, domestic partner or parent-in-law.
SB 1149 expands that list to include a designated person, defined as someone related to the employee by blood or whose relationship with the employee is the equivalent of a family relationship. That can include extended family members or chosen family who do not fall within the existing statutory list. The employee may identify the designated person when requesting leave, and the employer may limit the employee to one designated person per 12-month period.
The existing rules governing the amount, timing and potential unpaid status of bereavement leave otherwise remain in place.
The law generally covers private employers with five or more employees and public employers, subject to statutory eligibility requirements and exceptions. Employers should update bereavement policies and leave-request forms to include designated persons before January 1, 2027.
Assembly Bill 1803 expands California’s existing harassment-prevention training requirements to include anti-hate speech training beginning Jan. 1, 2028.
Current law requires employers with five or more employees to provide sexual harassment training every two years: at least two hours for supervisors and one hour for nonsupervisory employees. The training already must address abusive conduct and certain forms of protected-class harassment.
AB 1803 also requires the training to address recognizing, reporting and confronting workplace speech that vilifies, humiliates or incites hatred based on characteristics protected by FEHA. It does not increase the required training hours. Existing training also satisfies the new requirement if it already addresses unlawful harassment and abusive conduct based on protected characteristics.
Employers should confirm that their training materials and vendors will satisfy the new content requirement beginning in 2028.
Assembly Bill 2321 expands when a willful workplace-safety violation can result in criminal prosecution. Under existing law, an employer or an employee with management or control responsibilities may face criminal liability when a willful safety violation causes an employee’s death or permanent or prolonged bodily impairment. AB 2321 extends that criminal liability to willful violations that cause a serious injury or illness or serious exposure, even when the employee does not die or suffer permanent or prolonged impairment.
The law also strengthens Cal/OSHA investigations and coordination with prosecutors. The law requires the Bureau of Investigations to investigate accidents involving serious injury, illness or exposure when Cal/OSHA issues a citation for a willful violation. The law also strengthens Cal/OSHA investigations and coordination with prosecutors. Willfully resisting, impeding or interfering with an authorized Cal/OSHA investigation is now a misdemeanor. Existing procedures for inspection warrants remain in place.
Employers should review procedures for reporting serious incidents, preserving evidence and responding to inspections. Managers and safety personnel should know who to contact immediately after a serious workplace accident and how to handle an inspector’s requests.
Assembly Bill 2646 establishes a $19.75 base minimum hourly wage for certain agricultural workers, with adjustments tied to the Social Security cost-of-living adjustment beginning January 1, 2027.
The law does not raise wages for all farmworkers. It applies to agricultural workers who live outside California and are brought into the state for temporary or seasonal work through an approved job order or application, a definition that effectively targets H-2A workers.
The higher wage also applies to California-resident employees of the same employer who, during the same period and in the same county, perform the same or substantially similar work as those workers. Thus, an employer using covered temporary workers cannot pay comparable California workers a lower wage.
Other agricultural workers remain subject to otherwise applicable wage requirements. Covered employers should confirm the adjusted rate and identify corresponding California-resident employees before setting 2027 payroll.
Newsom vetoed Assembly Bill 1940, which would have expressly added perimenopause, menopause, postmenopause and related medical conditions to FEHA’s definition of sex.
The proposal would not have changed current law. Menopause-related symptoms may nevertheless qualify for protection under existing disability or other applicable laws, and employers should continue evaluating accommodation requests based on the employee’s circumstances.
Employers should begin reviewing workplace technology and repayment agreements now, update leave and anti-retaliation policies for 2027, and confirm that payroll and training providers are preparing for the applicable changes. AI-supported discipline and termination procedures must be ready by July 1, 2027; the new harassment-training content applies beginning January 1, 2028.
Our Employment Law Department can help assess how these laws affect your organization, review policies and agreements, and guide implementation.
Authors:
Eric De Wames
Senior Partner, MS&A
SHRM California Legislative Director
Joshua Stewart
Associate Attorney, MS&A
VP of Legislation, SHRM San Diego