New California Laws for 2027 and Beyond: What Employers Should Know

At a Glance

• California Governor Gavin Newsom signed several laws impacting California employers in 2026, some of which became effective in 2026 and others that will take effect during 2027 or later.
• New minimum wage ordinances have been enacted by many city and local governments, and the state minimum wage is increasing to $17.40 per hour on January 1, 2027, for all employers.
• AB 692 builds upon California law that can void contracts prohibiting competition after an employee’s employment ends by prohibiting certain contracts with “workers” (not only employees) which may have that effect but do not explicitly block competition.

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California Governor Gavin Newsom signed several laws impacting California employers in 2026. Some of the new laws became effective in 2026, and others take effect January 1, 2027, or later. These new laws address several topics, including restraint of trade, state holidays, artificial intelligence, workplace rights, and arbitrations.

As a reminder, the minimum wage in California is increasing to $17.40 per hour on January 1, 2027, for all employers — regardless of the number of workers employed by an employer. This also means that the minimum salary threshold for overtime exemption will increase to $72,384. Also, many city and local governments in California have enacted minimum wage ordinances exceeding the state minimum wage.

All employers with operations in California should be aware of these new laws, understand how these laws may affect their operations, and consult with counsel to address any compliance questions, including whether existing employment policies should be updated or whether new employment policies should be created. The effective date and/or operative date of each new law is indicated in the heading of the Assembly Bill (AB) or Senate Bill (SB). Unless otherwise indicated, the list below is in numerical order by AB or SB.

Please note that the summary below does not address all new California laws that impact employers or employees; rather, it is a summary of the new California laws that we believe to be the most significant in terms of scope and impact on individuals or employers with business operations in California.

AB 1198 — Public Works: Prevailing Wages (Effective January 1, 2027)

Current law requires workers on public works projects to receive at least the general prevailing per diem wage rate determined by the Director of Industrial Relations (DIR). Updated rates do not apply to contracts for which notice to bidders has been published, effectively locking rates.

AB 1198 changes this framework for large public works projects (prime contracts valued at $35 million or more) beginning July 1, 2027, by applying qualifying new prevailing wage determinations to contracts awarded or for which notice to bidders is published after that date. It also moves DIR's rate-determination cycle from quarterly to semiannual and creates a petition-for-review process.

This bill amends, repeals, and adds Section 1773.6 of the Labor Code and adds Section 1773.65 to the Labor Code.

AB 1331 — Workplace Surveillance (Effective January 1, 2027)

AB 1331 makes it unlawful for an employer to use a workplace surveillance tool to monitor or surveil employees in a workplace bathroom (unless directed by a court order). That said, employees have the right to leave workplace surveillance tools that are on their person or in their possession outside the bathroom before entering.

Employees required by federal or existing state law to remain available during meal or rest periods may be required to keep tools on their person. Employers may check surveillance tools only for a one-time bathroom entry and exit.

This bill authorizes the California Division of Labor Standards Enforcement (Labor Commissioner) to enforce this bill’s provisions and authorizes a public prosecutor to bring specified enforcement actions. This bill also subjects an employer who violates this bill to a civil penalty of up to $500 for each violation.

This bill adds Part 5.8 (commencing with Section 1560) to Division 2 of the Labor Code.

AB 1697 — Stay-or-Pay Contracts Redux (Effective September 30, 2026, and Modifies and Defers to January 1, 2027, the Effect of Prior Law)

In 2025, AB 692 built upon California law that can void contracts prohibiting competition after an employee’s employment ends. AB 692 prohibited any contract that:

1. Requires to pay an employer, a training provider, or a debt collector for any debt if the worker’s employment or work relationship with a specific employer terminates
2. Authorizes the employer, training provider, or debt collector to resume or initiate collection of or end forbearance on a debt if the worker’s employment or work relationship with a specific employer terminates
3. Imposes any penalty, fee, or cost on a worker if the worker’s employment or work relationship with a specific employer terminates

Some contracts were excluded. For example, a contract for tuition repayment for transferable credentials is excluded if several criteria are met: the contract is offered separately from the employment contract; the credential is not required for the job; the repayment amount is specified before the worker agrees and does not exceed the employer’s cost; repayment is prorated and cannot be accelerated upon separation; and repayment is not required if the worker is terminated for a reason other than misconduct (Discretionary Bonus/Loan Exception).

Another exception is a contract for the receipt of a discretionary or unearned monetary payment, including a financial bonus, at the outset of employment, that is not tied to specific job performance, if the following criteria are met: (a) repayment terms are set forth in an agreement separate from the primary employment contract; (b) the employee is notified of the right to consult an attorney before signing the agreement and is provided with at least five business days to do so; (c) any repayment obligation for early separation from employment is not subject to interest accrual and is prorated based on the remaining term of any retention period, which cannot exceed two years from the receipt of payment; (d) the worker has an option to defer receipt of the payment to the end of a fully served retention period without any repayment obligation; and (e) separation from employment prior to the retention period was at the sole election of the employee, or at the election of the employer for misconduct.

Also excepted are contracts for loan repayment or forgiveness provided by the government; for enrollment in apprenticeship programs approved by the Division of Apprenticeship Standards; and those related to the lease, financing, or purchase of residential property.

AB 692 contains expansive definitions of terms, including contract; debt; employer; misconduct; penalty, fee, or cost; person; training provider; transferable credential; and worker. Any person found liable for a violation is liable for actual damages sustained by the worker or workers on whose behalf the case is brought, or $5,000 per worker, whichever is greater, in addition to injunctive relief and reasonable attorney’s fees and costs. A worker or a worker representative may bring the action on behalf of the worker, others similarly situated, or both.

Passed as an urgency statute, AB 1697 retroactively delays these rules to apply only to contracts entered into on or after January 1, 2027, effectively making 2026 a safe-harbor period. AB 1697 also expands exceptions. The Discretionary Bonus/Loan Exception now applies anytime during employment, not just upon hire. In addition, this bill also adds three new exceptions:

1. Contracts entered into under a recruitment and retention program funded by a federal, state, or local government grant that offers recruitment or retention bonuses, if the repayment obligations comply with the grant and do not exceed its service obligations
2. Contracts between a securities broker-dealer, insurance producer or investment adviser (including their affiliates), and agents or representatives registered with the SEC or Financial Industry Regulatory Authority or licensed under specified California law, for a discretionary or unearned payment that induces the worker to affiliate with or remain with the employer, if (a) repayment terms are in a separate agreement; (b) the payment is in addition to the worker’s regular compensation; (c) the worker is notified of the right to consult an attorney and given at least five business days to do so; and (d) any interest on a postseparation repayment obligation does not exceed the IRS applicable federal rate
3. Repayment obligations arising from voluntary separation for paid time off advanced beyond the worker’s accrued balance, if the terms are disclosed separately from the employment contract when the worker requests the advance, the obligation does not exceed 40 hours, and no interest accrues

This bill amends section 16608 of the Business and Professions Code and section 926 of the Labor Code.

AB 1784 — Extends Pregnancy/Family-Status Protections under the Equity in Higher Education Act (Effective September 1, 2027)

AB 1784 adds ancestry, national origin, medical condition, marital status, familial status, citizenship, and primary language to the characteristics protected under the Equity in Higher Education Act and expands the definition of “gender” to include pregnancy or pregnancy-related conditions.

Commencing September 1, 2027, postsecondary educational institutions may not discriminate against any student or applicant based on familial status, marital status, or pregnancy or pregnancy-related conditions, and must provide reasonable accommodations to pregnant students, including undergraduates. Current pregnancy protections apply only to graduate students.

Undergraduate students who are pregnant, have recently given birth, or are nonbirth parents will be able to take a leave of absence and receive extra time to complete their degree or certificate — the same rights graduate students have today.

Institutions must designate at least one employee to coordinate compliance; require certain employees who learn of a student’s pregnancy to inform the student of accommodation rights and provide the coordinator’s contact information; revise pregnancy discrimination policies to cover undergraduates and share them at all student orientations; and post notice of these protections online and through on-campus medical centers.

The Board of Governors of the California Community Colleges must adopt systemwide regulations by July 1, 2027, and each community college district governing board must adopt them by September 1, 2027.

This bill amends Sections 66251 and 66260.7, amends and repeals Section 66281.7, and adds Sections 66260.8, 66261.6, 66262.3, 66281.75, and 66281.76 of the Education Code.

AB 1803 — Sexual Harassment Training to Include Anti-Hate Speech Training (Effective January 1, 2028)

AB 1803 expands the mandatory sexual harassment training that California employers with five or more employees must provide under the California Fair Employment and Housing Act (at least two hours for supervisors and one hour for nonsupervisory employees every two years, which already includes abusive conduct prevention). Beginning January 1, 2028, the required training must also include anti-hate speech training.

This bill amends Section 12950.1 of the Government Code.

AB 1883 — Workplace Surveillance Tools (Effective January 1, 2027)

AB 1883 prohibits employers from using AI-powered workplace surveillance tools on employees to recognize, infer, or predict emotional states or collect neural data. This bill targets emotion recognition and brain- or nervous-system data collection while permitting surveillance tools without those features.

This bill does not bar a workplace surveillance tool used to ensure safety. It also includes narrow exemptions for specific federal compliance contexts (such as aircraft development in national airspace or products/services for national security, military, space, or defense purposes where legally required.)

This bill authorizes the Labor Commissioner to enforce this bill’s provisions and authorizes a public prosecutor to bring specified enforcement actions. This bill also subjects an employer who violates this bill to a civil penalty of up to $500 for each violation.

This bill adds Part 5.8 (commencing with Section 1580) to Division 2 of the Labor Code.

AB 1928 — Sex Equity: Sexual Harassment Complaints (Effective January 1, 2027)

AB 1928 strengthens procedural protections for students in sexual harassment grievance proceedings at postsecondary institutions that receive state financial assistance. Current law lets each student party have a support person or an adviser. Each complainant and respondent may have both a support person and an advisor of their choice at any stage of the grievance process, including proceedings under state procedural protections or Title IX.

This bill amends Section 66281.8 of — and adds Section 66281.10 to — the Education Code.

AB 1950 — Civil Actions: Mediation (Effective January 1, 2027)

Pursuant to a prior year’s bill effective January 1, 2027, a court may not order a case into mediation unless all of the following conditions are met: (1) the amount in controversy does not exceed $75,000; (2) the case has been set for trial; (3) at least one party has notified the court of its interest in mediation; (4) there are no ongoing discovery disputes impacting the case; (5) the parties have been notified of their option to stipulate to a mutually agreeable mediator; and (6) the parties have the ability to mediate remotely upon the stipulation of all parties. If the parties do not stipulate to a mediator within 15 days, the court selects one at no cost to the parties. The mediation must conclude in an agreement or a statement of nonagreement no later than 120 days before trial and may not delay the trial date.

AB 1950 permits the Superior Court of Los Angeles County to order any case into mediation, notwithstanding the $75,000 limit. All of the other conditions above continue to apply. Cases ordered to mediation are entitled to up to three hours of no-cost mediation through a court-sanctioned program, and parties may appear remotely. The mediation may not delay or serve as grounds to continue the trial date or any expedited procedures.

This bill adds section 1775.16 to the Code of Civil Procedure which will sunset on January 1, 2032.

AB 1961 and 2179 — Workplace Violence Restraining Orders Sought by Employers (Effective January 1, 2027)

California law allows an employer or collective bargaining representative to seek a temporary restraining order and an order after hearing on behalf of an employee who has suffered harassment, unlawful violence, or a credible threat of violence at the workplace.

AB 1961 permits an employer to seek an order on behalf of all employees at a workplace, without naming a specific employee, when the harassment, violence, or threat is directed at the workplace rather than at a particular employee.

AB 2179 provides that, beginning January 1, 2028, a party or witness may appear remotely at the hearing on a petition at no charge; each superior court must post local rules for remote appearances on its website; courts must permit petitions and related filings to be submitted electronically; and the Judicial Council must develop the necessary forms and rules.

This bill amends section 527.8 of the Code of Civil Procedure and section 6103.2 of the Government Code.

AB 2017 — State Holidays: Eid al-Fitr and Eid al-Adha (Effective January 1, 2027)

AB 2017 adds “Eid al-Fitr” and “Eid al-Adha” to California’s list of state holidays. Eid al-Fitr falls on the first day of the month of Shawwal and Eid al-Adha on the 10th day of the month of Dhu al-Hijjah, both in the Islamic lunar calendar. Neither one will be a judicial holiday.

The bill allows public schools and community colleges to close on both holidays if the governing board agrees to do so in a memorandum of understanding with represented employees. Classified school and community college employees may receive these days as paid holidays under the same kind of agreement. State employees may choose to take eight hours of holiday credit on either Eid holiday for their personal holiday credit.

This bill amends section 135 of the Code of Civil Procedure, sections 37220.7, 45203, 79020, and 88203 of the Education Code, and sections 6700, 19853, and 19853.1 of the Government Code.

AB 2155 — Arbitrations (Effective January 1, 2027)

Existing state law, the California Arbitration Act (CAA), provides that written agreements to arbitrate are valid and enforceable. Existing federal law, the Federal Arbitration Act (FAA), also deems arbitration agreements valid and enforceable, except for specific types of claims (e.g., sexual harassment).

This bill makes arbitration agreements under the CAA unenforceable where the agreement would not be enforceable under the FAA. In practice, this means that employers can no longer rely on the CAA to compel arbitration of sexual harassment and sexual assault claims, and of claims by exempt transportation workers, because the FAA does not permit doing so.

AB 2155 amends section 1281 of the Code of Civil Procedure.

AB 2156 and SB 1394 — State Holidays: Farmworkers Day (Effective March 26, 2026, and January 1, 2027, respectively)

AB 2156 renamed the March 31 state holiday, previously known as Cesar Chavez Day, “Farmworkers Day.” The bill was passed as an urgency measure and took effect immediately when it was signed on March 26, 2026.

SB 1394 now moves Farmworkers Day from March 31 to April 10. It repeals the separate “California Farmworker Day” that had been observed on August 26. It also ends the use of March 31 as Cesar Chavez Day for the purpose of school and community college closures.

For state employees, April 10 replaces March 31 on the list of paid holidays. Public schools and community colleges may close on April 10 under a memorandum of understanding. Classified employees may receive it as a paid holiday under the same kind of agreement. If April 10 falls on a Sunday, the following Monday is the holiday.

For school and higher education employers with collective bargaining agreements that were entered into before January 1, 2027, and that conflict with these changes, the changes do not apply until the agreement expires or is renewed.

These bills amend sections 37220.5, 45203, 79020 and 88203 of the Education Code, amends sections 6700, 6701, 6717, 19853 and 19853.1 of the Government Code, and repeal section 6731 of the Government Code.

AB 2157 — Extension of the Displaced Oil and Gas Worker Pilot Program (Effective January 1, 2027)

Under current law, the Displaced Oil and Gas Worker Pilot Program is to be administered by the Employment Development Department for the purpose of addressing employment dislocations associated with oil, gas, and related industries until July 1, 2027.

This bill extends the program indefinitely by removing the July 1, 2027, repeal date.

This bill amends Section 9921 of the Unemployment Insurance Code and repeals and adds Section 9925 of the Unemployment Insurance Code.

AB 2212 — Postsecondary Education: Sexual Harassment, Harassment, Intimidation, and Bullying Policies: Student Training (Operative August 1, 2027)

AB 2212 updates the Equity in Higher Education Act, which guarantees students the right to participate in education free from discrimination and harassment and treats sexual harassment of students as prohibited sex discrimination.

Beginning August 1, 2027, the bill adds new defined terms, including “digitized sexually explicit material,” “sextortion,” “technology-facilitated sexual harassment,” and “affirmative consent.” The bill revises the definitions of “sexual harassment” to include “sexual exploitation,” sexual violence, stalking, sextortion, and technology-facilitated sexual harassment.

This bill amends Sections 66281.9, 87604.5, 89521, and 92612.1, and amends, repeals, and adds Section 66262.5, of the Education Code.

AB 2294 — State Holidays: Sylvia Mendez Day (Effective January 1, 2027)

AB 2294 makes April 14 of each year a state holiday known as “Sylvia Mendez Day.” April 14 is the anniversary of the ninth circuit’s decision in Mendez v. Westminster, a ruling that the segregation of Mexican American students in California schools was unlawful. Like the Eid holidays mentioned above, Sylvia Mendez Day is not a judicial holiday.

This bill amends section 135 of the Code of Civil Procedure and section 6700 of the Government Code.

AB 2311 — Health Care Districts: Physician Employment (Effective January 1, 2027, Addressing Provisions Operative Until July 1, 2037)

Existing law, the Medical Practice Act, restricts the employment of physicians and surgeons or doctors of podiatric medicine by a corporation or other artificial legal entity to entities that do not charge for professional services rendered to patients and are approved by the Medical Board of California, subject to specified exemptions. AB 2311 creates a temporary exception to California's general restriction on corporations employing physicians.

Until January 1, 2037, AB 2311 authorizes health care districts, and nonprofit corporations whose sole corporate member is a health care district, that own or control a general acute care hospital, to employ physicians and charge for their professional services, provided all of the following conditions are met:

• The hospital is a licensed acute care hospital that (1) was awarded a loan under the Distressed Hospital Loan Program before January 1, 2025, or (2) has a combined Medicare and Medi-Cal payor mix (for the hospital and any health care system to which it belongs, if any) above 75% as of January 1, 2025
• The medical staff votes that each physician's employment is in the best interest of the communities the hospital serves
• The health care district or nonprofit corporation, and any hospital under its ownership or control, may not interfere with a physician's professional judgment
• New employed positions must add to, not replace, physician positions on the medical staff as of January 1, 2026
• Prospective physician employees must be offered the option to contract with the facility instead of becoming employees

AB 2311 also requires, starting January 1, 2028, qualifying employers to publish an annual report on their websites by July 1 of each year that includes data on their hospitals' ability to recruit and retain physicians and the total number recruited and retained since January 1, 2027, with employed and contracted positions reported separately.

The changes in California law pursuant to AB 2311 will become inoperative on July 1, 2037, and repealed as of January 1, 2038.

AB 2311 amends, and adds a new version of, section 2401 of the Business and Professions Code.

AB 2321 — Occupational Safety and Health Investigations (Effective January 1, 2027)

AB 2321 strengthens criminal enforcement of workplace safety violations investigated by the Division of Occupational Safety and Health (Cal/OSHA). Specifically, the new law creates a new misdemeanor for willfully resisting, preventing, impeding, or interfering with Cal/OSHA inspectors performing their duties, or willfully violating a related court order. The penalty is up to six months in county jail, a fine of up to $5,000, or both. AB 2321 also expands the existing crime for willful safety violations by employers and supervisors by covering violations that cause serious injury, illness, or exposure (in addition to violations that caused death or permanent or prolonged bodily impairment, per current law).

AB 2321 also expands the duties of Cal/OSHA and its Bureau of investigations (the Bureau) by requiring:

• The Bureau to investigate any accident involving serious injury, illness, or exposure for which Cal/OSHA issues a citation for a willful violation
• The Bureau to adopt written policies for deciding whether to investigate a case or refer it for prosecution, and to document its reasons for not investigating or referring a case
• Cal/OSHA to set up a routine or automated process for sending information on serious incidents to the Bureau
• Cal/OSHA to immediately notify the appropriate prosecuting authority of accidents involving serious injury, illness, or exposure to five or more employees, a death, or a request for prosecution by a Cal/OSHA representative

In addition, when police or fire agencies respond to a workplace accident involving serious injury, illness, exposure, or death, they must notify both Cal/OSHA and the county district attorney's office.

AB 2321 also requires the Bureau to submit an annual report on its activities to the California legislature, with such report including information relating to fatality cases that prosecutors declined because the Bureau's referral lacked sufficient evidence, the specifics of which are to be kept confidential.

AB 2321 amends sections 6314, 6315, 6315.3, 6322, 6409.2, and 6425 of the Labor Code.

AB 2448 — Medical Information: Confidentiality (Effective January 1, 2027)

AB 2448 tightens existing digital privacy rules regarding disclosure of medical care records without authorization. This bill covers medical information about gender-affirming care, abortion and abortion-related services, and contraception. Previously, the Confidentiality of Medical Information Act (CMIA) required businesses that electronically store sensitive medical information to develop security capabilities. Violations of CMIA that resulted in economic loss or personal injury to a patient were punishable as a misdemeanor. AB 2448 goes further and now requires those businesses not just to develop these capabilities but to turn those protections on.

Covered businesses must have four active protections for medical information about gender-affirming care, abortion and abortion-related services, and contraception: (1) limit user access privileges to information systems to authorized persons only; (2) prevent disclosure of this information to persons and entities outside of California; (3) segregate this information from the rest of the patient’s medical record; and (4) provide the ability to automatically disable access to the segregated information by individuals and entities in another state.

These protections apply to businesses that store or maintain this medical information on behalf of a health care provider, health plan, pharmaceutical company, contractor, or employer.

AB 2448 also expands the scope of potential liability for CMIA violations because covered businesses are no longer in compliance by simply having these protections available.

This bill amends Section 56.101 of the Civil Code.

AB 2563 — Sex Discrimination (Effective January 1, 2027)

AB 2563 establishes a uniform, broad definition of “sex discrimination” across all California law, grounded in the state and federal constitutional guarantees of equal protection, privacy, and reproductive freedom. Any state law prohibiting discrimination based on sex, gender, or similar grounds must be interpreted to prohibit “sex discrimination,” defined to include discrimination based on specified actual or perceived characteristics, including degree of conformity to sex or gender stereotypes. The provisions are to be liberally construed.

AB 2563 expands the definition of “sex” in both the Unruh Civil Rights Act and the California Fair Employment and Housing Act to include all characteristics within the new definition of “sex discrimination.”

This bill impacts 28 distinct California codes, including the Business and Professions Code, the Civil Code, the Code of Civil Procedure, the Corporations Code, and the Labor Code.

AB 2599 — Slavery & Corporate Disclosures (First Filings Due January 15, 2029)

AB 2599 requires large, long-established companies doing business in California to search their historical records for any involvement in slavery and disclose what they find. It applies to any business doing business in California that has annual worldwide gross receipts over $100 million, if the business or a predecessor company existed on or before December 31, 1964. These businesses must complete an affidavit, under penalty of perjury, verifying that they searched all records held by them and their related entities. Businesses operating in California as of January 1, 2028, must file by the later of January 15, 2029, or January 15 of the year after the Civil Rights Department's digital platform is developed. Businesses that start operating in California after January 1, 2028, must file by the later of January 15 of the second year after they are established or one year after the legislature makes an appropriation. The requirements take effect only once the legislature appropriates funding.

In addition, any business bidding on, or proposing to renew, a contract with a state agency in the amount of $100,000 or more must certify, under penalty of perjury, that: (1) they are in compliance with the Unruh Civil Rights Act; (2) they are in compliance with the California Fair Employment and Housing Act; (3) any policy against any sovereign nation or peoples recognized by the US government, including the nation and people of Israel, is not used to discriminate in violation of the Unruh Civil Rights Act or the California Fair Employment and Housing Act; and (4) if they are a covered entity having annual worldwide gross receipts that exceed $100,000,000, they have submitted the affidavit described above.

This bill adds section 1714.44 to the Civil Code and amends section 2010 of the Public Contract Code.

AB 2624 — Privacy for Immigration Support Services Providers (Effective October 1, 2027)

AB 2624 expands confidentiality and anti-doxxing protections for individuals who work with designated immigration support services and face threats or harassment because of their affiliation. This bill prohibits soliciting, selling, or trading these individuals’ personal information or images online with intent of inciting or threatening harm. Additionally, it bars individuals from posting personal information of protected workers or support providers online with intent to use the information to commit or threaten violence against them.

AB 2624 also provides, among other things, that eligible individuals who have faced documented threats within the past year will be issued a substitute mailing address by the Secretary of State, shielding their real home, work, or school addresses from public records.

This bill adds Chapter 3.26 (commencing with Section 6218.10) to Division 7 of Title 1 of the Government Code.

AB 2646 — Minimum Wages for Agricultural Workers (Effective January 1, 2027)

AB 2646 sets a minimum wage of $19.75 per hour for agricultural employees who live outside California and work in-state temporarily or seasonally through a state-approved application or job order. This wage floor also applies to in-state residents who perform the same or substantially similar work as the out-of-state workers employed by the same in-state employer, in the same county.

This bill adds Section 1208 to the Labor Code.

AB 2682 — Transportation Network Company Drivers (Effective January 1, 2027)

As we reported in 2025, AB 1340 gave transportation network company (TNC) drivers the right to organize and bargain collectively, with oversight by the Public Employment Relations Board (PERB).

AB 2682 creates a path for judicial review (i.e., writ of extraordinary relief) of PERB’s unfair practice decisions under that law.

This bill adds section 7470.18.5 to the Business and Professions Code.

SB 574 — Attorneys, Arbitrators, Judicial Officers, and Alternative Resolution Providers (Effective January 1, 2027)

SB 574 is one of California’s first broad efforts to govern how attorneys and neutrals may use generative artificial intelligence (AI). This bill addresses client confidentiality expectations by requiring that attorneys not enter any confidential, personal identifying, and other nonpublic information into a generative AI system. Furthermore, it emphasizes that nothing in these new rules weakens a lawyer’s existing duty of reasonable competence and diligence.

Attorneys must take reasonable steps to check the accuracy of AI output and correct any errors or “hallucinated” content. In court proceedings, every brief, pleading, motion, or other filing may cite only authorities the attorney has personally verified, particularly any citations suggested by AI.

This bill also regulates arbitration providers’ AI use. SB 574 prohibits arbitrators from delegating any part of their decision-making to a generative AI tool. Additionally, arbitrators may not rely on AI-generated information from outside the record without first making appropriate disclosures to the parties. These new rules build on arbitrators’ existing duty to disclose any information that could raise doubts about their impartiality.

Finally, SB 574 adopts new accountability procedure requirements for alternative dispute resolution (ADR) providers. Previously, existing law required the state bar to verify that each certified ADR firm had its own procedures for receiving and resolving complaints against its arbitrators or mediators. Now, the state bar must adopt procedures for the state bar itself, or an approved professional organization, to receive, investigate, and resolve ethical complaints against mediators and arbitrators.

All complaint proceedings will be private and confidential. Once a decision is reached, the state bar may publicly disclose information that does not reveal confidential or privileged communications. Records from the complaint proceedings will be exempt from the Public Records Act.

This bill amends Section 6173 of, and adds Section 6068.1 to, the Business and Professions Code, and amends Section 128.7 of, and adds Sections 180 and 1282.1 to, the Code of Civil Procedure.

SB 909 — Public Works (Effective January 1, 2027)

SB 909 raises penalties and fees for public works contractors. It also sends more of the resulting money toward the state's own public works enforcement.

Summary of key changes:

• Registration fees: The cap on DIR contractor registration and renewal fees rises from $800 to $1,000.
• Prevailing wage underpayment:
  • The maximum penalty is now $280 per worker per day.
  • The minimum is $56 per worker per day, unless the violation was a good-faith mistake that was promptly corrected.
  • The minimum is $112 per worker per day if the contractor was assessed prevailing wage penalties in the prior three years.
  • The minimum is $168 per worker per day for willful violations.
• Late certified payroll records: A contractor that misses the 10-day deadline to produce records forfeits $140 per worker per day until it complies.
• Apprenticeship violations: Knowing violations carry up to $140 per day. Repeat violations within three years carry up to $420 per day.
• Skilled and trained workforce violations: Penalties are up to $5,000 per month of noncompliant work, or up to $10,000 per month for a repeat violation within three years.

All civil penalties the Labor Commissioner collects under these provisions go into the State Public Works Enforcement Fund. The fund may now also pay for adequate labor commissioner staffing for public works enforcement. When an awarding body's labor compliance program resolves a matter without litigation, the penalties stay with that awarding body.

This bill amends Sections 1725.5, 1771.3, 1775, 1776, and 1777.7 of the Labor Code, and amends Section 2603 of the Public Contract Code.

SB 947 — Automated Decision Systems in Employment (Effective July 1, 2027)

Subject to limited exemptions, SB 947 prohibits California employers from using automated decision systems (ADS), defined as any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, such as a score, classification, or recommendation, that is used to assist or replace human decision-making, to do any of the following:

• Prevent compliance with or violate any federal, state, or local labor, occupational health and safety, employment, or civil rights laws or regulations
• Infer an employee’s protected status
• Predict and take adverse action against a worker for exercising their legal rights, including, but not limited to, rights guaranteed by state and federal employment and labor law

In addition, an employer may not rely solely on an ADS when making any disciplinary or termination decision and, if an employer relies primarily on ADS output to make such a decision, a human must corroborate the decision using supporting information such as supervisory evaluations, personnel files, work product, peer reviews, or witness interviews. If the output cannot be corroborated, or the human reviewer finds it inaccurate, incomplete, or misleading, then the employer may not use it.

SB 947 also grants employees the right to request a meaningful, objective description of their own data that the ADS used, with other individuals' personal information anonymized.

If an employer primarily relies upon an ADS to make a disciplinary or termination decision, then the employer must provide the affected employee with a written postuse notice at the time the employer informs the employee of the decision. Such notice shall comply with all of the following:

• It must be written in plain language as a separate, stand-alone written notice in an easy to use format in the same language the employer generally uses to communicate to employees.
• It must state that an ADS was primarily relied upon and that a human corroborated the output.
• It must also provide a human contact and state that retaliation is prohibited.

SB 947 prohibits retaliation against employees who exercise their rights under the bill. The Labor Commissioner and public prosecutors may enforce it. Once it is shown that an ADS was used, the employer bears the burden of proving it complied. Remedies include injunctive relief, punitive damages, attorney's fees, and a $500 civil penalty per violation.

SB 947 applies to all cities, including charter cities. The law does not preempt local ordinances that give employees equal or greater protection. Complying with its notice requirements satisfies substantially similar ADS notice requirements under other state law. However, employers covered by the California Consumer Privacy Act remain subject to the California Privacy Protection Agency's automated decision-making regulations.

SB 947 includes the following exemptions:

• Parties to a collective bargaining agreement that explicitly waives the bill and provides protection from algorithmic management.
• ADS use required by, or reasonably necessary to comply with, federal law or a binding federal contract relating to aircraft development or national security, military, space, or defense purposes.

SB 947 adds Part 5.5.5 (commencing with section 1520) to Division 2 of the Labor Code.

SB 951 — Cal/WARN Technological Displacement Notice (Effective January 1, 2027)

The Cal/WARN Act already requires employers to give 60 days' written notice of a mass layoff, relocation, or termination at a covered establishment. That notice goes to affected employees, the Employment Development Department (EDD), the local workforce development board, and local officials. Under SB 951, when a mass layoff, relocation, or termination is caused in whole or in substantial part by an artificial intelligence (AI) or other automated technology replacing or automating positions, the notice must also include:

• The number, classification or occupation, and work location of the layoffs substantially due to AI or automation
• The job functions performed by the replaced workers that will be automated
• The specific category or type of AI system or automating technology that substantially caused the displacement
• The statement “This notice is for a technology displacement” at the top of the notice

SF 951 defines “artificial intelligence” as an engineered or machine-based system that, with varying levels of autonomy, infers from its input how to generate outputs that can influence physical or virtual environments.

Employers that fail to give the required notice remain subject to the existing civil penalty of up to $500 for each day of the violation.

The Employment Development Department (EDD) must publish a summary of technology displacement notices on its website and post a quarterly statewide summary of reported technology displacements.

By January 1, 2028, EDD must also submit a report to the legislature on AI's effects on business hiring practices, including its impact on industries and occupations at the state and regional level. The report must include one or more of the following:

• Recommendations on a public notice requirement for “technological cessation in hiring,” meaning the permanent end of hiring for an occupation or position caused in whole or in part by the employer's use of AI
• A summary of trends in hiring demand based on exposure to AI
• A summary of how businesses use AI and how that affects hiring
• A summary of existing research on AI's effects on hiring

SB 951 amends sections 1400.5 and 1401 of the Labor Code and adds section 1402.7.

SB 1046 — Occupational Safety: Transboundary Pollution (Effective January 1, 2027)

Existing law, the California Occupational Safety and Health Act of 1973 (Cal/OSHA), assures safe and healthful working conditions for all California workers by authorizing the enforcement of effective standards, assisting and encouraging employers to maintain safe and healthful working conditions, and providing for research, information, education, training, and enforcement in the field of occupational safety and health. Existing law also establishes the Occupational Safety and Health Standards Board, which adopts occupational safety and health standards, and the Division of Occupational Safety and Health in that department, which enforces those standards.

SB 1046 requires that Cal/OSHA propose a standard by January 1, 2030, to the Occupational Safety and Health Standards Board to protect employees at risk of high or prolonged exposure to transboundary pollution (i.e., pollutants or toxins from Baja California that enter California through the Tijuana River, the Pacific Ocean, or the New River and threaten public or environmental health) in outdoor work environments. The board will then consider it for possible adoption.

The standard will apply to lifeguards, park rangers, and other employees Cal/OSHA determines are at high risk. It covers those who work within 10 miles of the Tijuana River Valley Regional Park, the Tijuana Slough National Wildlife Refuge, the Tijuana River, or the New River.

The standard may include:

• Personal protective equipment, including respiratory protection
• Medical surveillance
• Hazard communication, such as notice of expected wet-weather events
• Reporting and recordkeeping
• Training for employees and supervisors

Cal/OSHA must also consider identifying an exposure threshold for hydrogen sulfide at which acute or chronic health effects occur to reference in the standards and may consider exposure thresholds for other relevant pollutants.

The standards board may adopt emergency regulations to implement these provisions.

This bill adds section 6726 to the Labor Code.

SB 1111 — Digital Replicas (Effective January 1, 2027)

Existing law creates a civil cause of action against any person who knowingly uses the name or likeness of another person, without their consent, for specified purposes. When an employer incidentally uses the name or likeness of an employee for an advertisement or other publication, existing law establishes a rebuttable presumption that failure to obtain the consent of an employee was not a knowing use.

SB 1111 amends Civil Code section 3344, so that a “voice or likeness” includes a digital replica. A digital replica is a computer-generated, highly realistic electronic representation readily identifiable as a person’s voice or visual likeness. It covers recordings of a performance or appearance the person never actually gave, as well as real ones that have been materially altered.

This bill removes the rebuttable presumption that an employer’s failure to get consent was not a knowing use when an employee’s photograph or likeness is incidental to an advertisement or publication. Violators remain liable for the greater of $750 or actual damages, plus attributable profits, punitive damages, and attorney’s fees and costs.

This bill also adds a penal code provision. For any offense that requires false impersonation, the use of a digital replica with intent to impersonate another person now qualifies.

Employers should get written consent before using an employee’s name, image, voice, or AI-generated likeness in marketing, even when the use appears incidental.

This bill amends section 3344 of the Civil Code and adds Chapter 9 (commencing with section 540) to Title 13 of Part 1 of the Penal Code.

SB 1149 — Bereavement Leave: Designated Persons (Effective January 1, 2027)

Under existing law, it is an unlawful employment practice for an employer to refuse an employee’s request for up to five days of bereavement leave after the death of a family member. The law applies to employers with five or more employees and to public employers and covers employees who have worked for the employer for at least 30 days before the leave begins.

SB 1149 expands the definition of “family member” to include a “designated person,” defined as any individual related to the employee by blood, or whose association with the employee is the equivalent of a family relationship. The employee may identify the designated person when requesting bereavement leave. Employers may limit employees to one designated person per 12-month period. This is just the latest law in California adding “designated person” to the list of covered family members for purposes of leaves of absence.

Employers should update their bereavement leave policies and train staff to handle requests that involve designated persons.

This bill amends section 12945.7 of the Government Code.

SB 1237 — Civil Rights Department (Effective January 1, 2027)

SB 1237 increases penalties for repeat pay data reporting failures. Existing law requires private employers with 100 or more employees to file an annual data report with the Civil Rights Department (CRD). Employers with 100 or more workers hired through labor contractors must also file a separate required report. The report must break down employees and their pay by race, ethnicity, and sex.

The penalty for the first failure to file the pay data will remain at $100 per employee. However, SB 1237 raises the penalty for subsequent failures to report up to an amount not to exceed $1,000. The CRD will also now publish each year how many pay data reports were submitted for further transparency and accountability.

This bill amends Section 12999 of the Government Code.

SB 1316 — Labor Commissioner Proceedings; Exclusion of Employer Evidence (Effective January 1, 2027)

SB 1316 strengthens the Labor Commissioner’s enforcement tools in three ways. First, when the Labor Commissioner records a lien on an employer’s real property to secure a final order, the lien lasts 10 years. SB 1316 allows the lien to be renewed for additional 10-year periods at any time before it expires.

Second, an employer that fails to produce requested records within the Labor Commissioner’s deadline is already barred from introducing those records as evidence in certain citation proceedings. SB 1316 expands this rule so the employer also may not use or rely on the records as evidence, including to impeach a witness. The rule now also applies to proceedings contesting citations for retaliation or discrimination under section 98.74. The covered records are payroll, time, and employment records required to be maintained under sections 226, 247.5, 432.3, 1174, 1197.5, 1198.5, 2052 and 2673 and the Industrial Welfare Commission wage orders. Existing exceptions remain for inadvertent errors corrected within 20 days and for reasonable extension requests, as does the automatic 15-day extension for good-faith requests for more time.

Third, SB 1316 creates a similar preclusion rule for public works. Contractors and subcontractors challenging a civil wage and penalty assessment may not introduce or rely on payroll, time, and employment records they failed to produce in response to the Labor Commissioner request. The rule generally applies where the Labor Commissioner allowed at least 10 days to respond. No extension alters the deadline for producing certified payroll records under section 1776.

This bill amends sections 98.2 and 1174.1 of — and adds section 1742.05 to — the Labor Code.

SB 1342 — Criminal Records Relief (Effective January 1, 2027)

SB 1342 expands California’s “clean slate” system to include arrests for felony offenses that meet certain requirements. Existing state law requires the Department of Justice to review state criminal databases and automatically clear eligible arrest records.

Beginning on October 1, 2029, this relief will extend to arrests where (1) the arrest was for a felony offense; (2) all charges arising from the arrest were dismissed; (3) one year has elapsed since the date the most recent arrest was dismissed; and (4) no charge arising from the arrest was refiled or is pending during that period. Once relief is granted, the arrest is treated as though it never happened, and the person is released from its penalties and disabilities.

This bill also makes it easier for individuals to qualify for automatic conviction relief. Under existing law, a conviction can only be cleared if records show the person is not serving a sentence and has no pending charges. However, incomplete records often block access to this relief because the state lacks the required information to provide it. SB 1342 now states that if three years have passed with no new activity on their record, the Department of Justice must conclude there are no pending charges. This bill also states that if the department cannot tell whether a sentence was completed and at least seven years have passed since the conviction, it must treat the sentence as finished.

This bill amends, repeals, and adds Sections 851.93 and 1203.425 of the Penal Code.