New California Employment Laws

As the California legislative session came to an end, several employment-related bills were sent to Governor Gavin Newsom’s desk for a signature by Sept. 30.

Below are highlights of some of the new laws.

• AI-related restrictions. , known as the “No Robo Bosses Act,” will take effect July 1, 2027, and prohibit employers from relying solely on an automated decision system (ADS) when making employment-related decisions, requiring a human reviewer to conduct an independent investigation and compile corroborating information for disciplinary and termination decisions. In addition, employers may not use an ADS to infer a worker’s protected status under the Fair Employment and Housing Act (FEHA) and predict or take adverse action against a worker for exercising their legal rights. Pursuant to the new law, employers must provide affected employees with post-use notice of an ADS and a right to obtain a description of employee data primarily used by an ADS in a disciplinary or termination decision. Enforcement includes the Labor Commissioner and public prosecutors, as well as a private right of action with civil penalties up to $500 per violation. Gov. Newsom also signed , which mandates a Cal/WARN notice of a mass layoff, relocation or termination caused in whole or substantial part by an artificial intelligence (AI) system, and , which establishes limitations on AI use by attorneys and requires attorneys to disclose their use of generative AI in court filings.
• Definitional changes. In definitional updates, established a consistent definition of “sex discrimination” across various statutory codes, aligning the meaning in laws including FEHA and the Unruh Act and adds a “designated person” to the list of persons that an employee can take up to five days of unpaid bereavement leave for, pursuant to . Employees can make the designation at the time they take leave, and employers may limit an employee to one designated person per 12-month period. The new law takes effect Jan. 1, 2027.
• Additional training. Pursuant to , employers with five or more employees must provide “anti-hate speech training” as part of their existing harassment prevention training. The new training must include practical guidance on recognizing, reporting and confronting workplace speech that “vilifies, humiliates, or incites hatred” against individuals based on characteristics protected under FEHA. The new law – set to take effect Jan. 1, 2028 – does not increase the existing one- and two-hour training requirements or necessitate a separate training course but may be incorporated into existing harassment training programs.
• Surveillance tools banned. A pair of new laws created prohibitions on the use of surveillance tools by employers. bans employers from using a “workplace surveillance tool” for monitoring or surveilling employees in a workplace bathroom, while under , employers may not use a workplace surveillance tool that uses AI to recognize or make inferences or predictions about an individual’s emotional state, or that collects neural data (such as emotion recognition software and neural monitoring devices). Exempt from the law are employers engaged in the development of aircraft for use in the national airspace and the development of products or services for national security, military, space or defense purposes where the use of a workplace surveillance tool is reasonably necessary to comply with a federal statute, a regulation or binding federal contract. The Labor Commissioner or a public prosecutor is authorized to enforce the new laws (with civil penalties of up to $500 for each violation), and employees also have a private right of action for injunctive relief, punitive damages and attorney’s fees and costs.
• Stay-or-pay updates. Taking effect on Jan. 1, 2027, tweaks the restrictions on stay-or-pay provisions, adding new exceptions to those already in the statute. One of the new exceptions allows for certain compensation agreements between securities broker-dealers, insurance providers or investment advisers and their affiliates, agents or representatives who are registered with the appropriate federal agency or licensed under the applicable state law. The new law also expands the exception for certain bonuses awarded later in the employment relationship, potentially bringing retention bonuses and relocation bonuses for current employees subject to the exception if certain requirements are met.

Why it matters: Employers should familiarize themselves with the new laws in California and prepare for the various effective dates.