Yesterday, California’s annual legislative cycle ended. This year, after the California Legislature sent over a thousand bills on a variety of issues to Governor Gavin Newsom, he signed most of the bills — the last of which he signed yesterday while standing on top of the Golden Gate Bridge!
California’s incoming new laws include several labor- and employment-related statutes that will impact employers’ compliance efforts, including laws related to the use of artificial intelligence (AI) and automated decision systems (ADS) in employment practices, discrimination and harassment, recruiting and hiring, leaves of absence and wage-and-hour requirements. Here’s a quick summary of what’s ahead in 2027. Unless otherwise noted, new laws take effect January 1, 2027.
Artificial Intelligence and Automated Decision Systems
This year, California considered several bills addressing the use of AI and ADS in various employment contexts, including workplace surveillance as well as discipline and termination decisions
One of the most notable bills is SB 947. Informally referred to as the “No Robo Bosses Act,” this law prohibits employers from relying solely on an ADS, including AI, when making disciplinary or termination decisions. It also prohibits employers from using an ADS to:
- Prevent compliance with any federal, state or local labor laws;
- Not comply with occupational health and safety, employment or civil rights laws or regulations;
- Infer an employee’s protected status under the Fair Employment and Housing Act (FEHA); or
- Predict or take adverse action against a worker for exercising their legal rights.
Employers may still use an ADS when making disciplinary or termination decisions, but the law now requires a person to independently corroborate the decision if the employer is “primarily relying” on an ADS, including reviewing the data that produced the ADS output or other relevant information, such as supervisory evaluations, personnel files, work product, peer reviews and witness interviews.
Additionally, if the employer primarily relies on ADS when making the decision, the employer must provide a post-use notice at the time they inform the employee of the decision.
A related bill, SB 951, amends the California Worker Adjustment and Retraining Notification (CalWARN) requirements. Under the new law, if a WARN-triggering event (mass layoff, relocation or termination) is caused in whole or in substantial part by an AI system or other automated technology replacing or automating employment positions, employers must include additional information in the required employee notice.
Finally, the Governor signed two additional bills, AB 1331 and AB 1883, that place restrictions on the use of workplace surveillance tools, which they define broadly to encompass a wide range of technology, such as wearable devices.
Under these new laws, employers cannot use workplace surveillance tools that use artificial intelligence to collect employees’ neural data or recognize their emotional state. Additionally, employers are generally prohibited from using these tools to monitor employees in a workplace bathroom, and employees will have the right to leave behind workplace surveillance tools that are on their person or in their possession when entering a bathroom.
Discrimination and Harassment
California law prohibits an employer from engaging in unfair immigration-related practices against a worker in retaliation for exercising certain legal rights. AB 2495 expands those protections to expressly prohibit an employer from engaging in any conduct related to any person’s perceived immigration status that would:
- “Reasonably tend to dissuade” the person from exercising or attempting to exercise their rights; or
- Induce a person to engage in conduct that they have the right to abstain from.
AB 2495 also clarifies that actual immigration status is irrelevant to liability under Section 1019 and that these protections apply to applicants, employees and former employees.
Next, two changes are coming to California’s pay data requirements. First, enacted last year but taking effect in 2027, SB 464 increases the number of job categories in employers’ pay data reports from 10 to 23, so employers subject to pay data reporting should keep an eye out for updated reporting templates in 2027. Second, signed this year, SB 1237 increases the penalty for employees that have subsequent failures to file their pay data reports from $200 to $1000 per employee.
Then, AB 2563 revises the definition of “sex” in California’s FEHA. Currently, FEHA defines “sex” to include pregnancy, childbirth, breastfeeding and related medical conditions. It also includes a person’s gender as well as their gender identify and expression. Beginning next year, the definition will also expressly include the following:
- Assigned sex or gender category, including female, male or nonbinary.
- Degree of conformity to sex or gender stereotypes.
- Access to, and use of, gender affirming care and other related health care.
- Decision-making, access to care, or potential or actual use of a drug, device, product, or service relating to pregnancy or related medical conditions.
- Variations in sex characteristics, including intersex traits or differences in sex development.
Employers should review and update their company policies to account for the expanded definition.
Lastly, AB 1803 adds to California’s harassment prevention training requirements. Current law requires employers to provide harassment prevention training covering several topics to employees and supervisors. AB 1803 adds anti-hate speech training to the list of required topics and requires employers to provide supervisors and employees with “practical guidance on recognizing, reporting, and confronting workplace speech that vilifies, humiliates, or incites hatred against people based on FEHA-protected characteristics.” This requirement does not take effect until January 1, 2028.
Recruiting and Hiring
AB 2155 changes California law governing the enforceability of arbitration agreements. This bill amends the California Arbitration Act (CAA) to expressly incorporate Federal Arbitration Act (FAA) exemptions into state law, including the FAA exemption for transportation workers engaged in interstate commerce and the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA). In circumstances where the CAA applies to an arbitration agreement and the FAA doesn’t, the FAA exemptions will apply under California law, making certain agreements unenforceable.
Another recruiting- and hiring-related bill affects a new law from 2026. Last year, Governor Newsom signed AB 692, which impacted certain voluntary employer benefits like monetary bonuses or educational tuition assistance that employers offer to incentivize and keep employees, often in exchange for an employee’s promise to pay the employer back if the employment ends before a specified term. AB 692 placed restrictions on these types of agreements, commonly referred to as stay-or-pay agreements, and specified certain exceptions.
Though AB 692 went into effect on January 1, 2026, this year’s AB 1697 pushed the effective date back to January 1, 2027, to provide employers with an additional year to structure their employment agreements and collective bargaining agreements in accordance with the law.
Leaves of Absence
SB 1149 revises California’s bereavement leave law, which allows an employee to take up to five days of protected leave upon the death of a family member. Beginning in 2027, employees will be able to take leave upon the death of a “designated person,” which the law defines as “any individual related to the employee by blood or whose association with the employee is the equivalent of a family relationship.”
The designated person may be identified by the employee at the time they request leave. Employers may limit an employee to one designated person per 12-month period for bereavement leave.
Minimum Wage and Exempt Salary Thresholds
AB 2646 creates another California industry-specific minimum wage rate. The new law will increase the minimum wage for a broad range of agricultural employees to $19.75 per hour. The California agricultural minimum wage applies to “approved agricultural employees” and “corresponding employees,” as the law defines those terms.
Generally, approved agricultural employees are non-resident agricultural workers approved by the California Labor and Workforce Development Agency or Employment Development Department (often H-2A visa workers) and corresponding employees are California residents doing the same or similar work even if not employed by an H-2A employer.
The agricultural minimum wage applies broadly to many employers and will increase on January 1 of each year based on an amount equal to the cost-of-living adjustment for social security benefits.
In addition to this new industry specific minimum wage, the general California state minimum wage is increasing to $17.40 per hour. This hourly increase also affects the minimum salary requirements for full-time exempt employees, which, beginning January 1, 2027, will be $72,384 per year ($6,032 per month).
Finally, several cities and counties in California have their own local minimum wage rates, many of which will increase on January 1, 2027. If the locality where employees are performing work requires a higher minimum wage rate than the state minimum wage rate, the local rate must be paid.
James W. Ward, J.D., Employment Law Subject Matter Expert/Legal Writer and Editor, CalChamber
CalChamber employment law experts will cover the new 2027 employment laws in more detail in the October issue of our HRCalifornia Extra newsletter (subscribe to HRCalifornia Extra) and in our annual new laws whitepaper (coming in November). Not a member? See how CalChamber can help you.
