California Employers Face a New Round of Workplace Laws for 2027

From artificial intelligence and workplace surveillance to leave policies and pay reporting, California employers have several employment-law changes to prepare for heading into the new year.

Another year means another round of compliance changes for California employers.

A collection of recently enacted workplace laws will introduce new requirements affecting how businesses use artificial intelligence, monitor employees, handle certain leave requests, approach workplace safety investigations and meet pay-data reporting obligations. Most of the changes are scheduled to take effect January 1, 2027, although some have different implementation dates.

For employers, the months ahead provide an opportunity to review policies before the new requirements arrive. Here are several changes businesses should have on their radar.

As artificial intelligence becomes more common in the workplace, California is putting additional guardrails around its use in employment decisions.

Under SB 947, an employer cannot rely exclusively on an automated decision system to discipline or terminate an employee. When such a system contributes to one of those decisions, a person must corroborate it. Affected employees must also receive separate written notice and can request information describing their own data that was used by the system.

For employers experimenting with AI-powered workforce tools, the takeaway is important: automation doesn’t eliminate the need for human involvement in consequential personnel decisions.

Another measure, SB 951, addresses situations in which technology eliminates jobs. When a mass layoff, relocation or termination covered by California’s WARN Act results wholly or substantially from AI or another automation technology replacing positions, employers will face additional disclosure requirements. The Employment Development Department is also directed to publish summaries of those notices.

Together, the measures reinforce the need for businesses to think about compliance alongside efficiency when introducing new workplace technology.

Wearables, electronic badges and other tracking technologies can provide businesses with useful operational information, particularly in workplaces where employees move between different areas throughout the day.

But employers will need to pay closer attention to where that monitoring stops.

AB 1331 generally prohibits the use of workplace surveillance technology to monitor employees inside workplace bathrooms. Employees are also permitted to leave carried surveillance devices behind when entering those spaces.

Companies using badges, wearable technology or other tracking systems should evaluate whether their existing practices align with the new privacy requirements.

California employers already operate under extensive workplace safety requirements, but another law increases the consequences for interfering with certain Cal/OSHA activities.

Under AB 2321, willfully interfering with specified Cal/OSHA investigative duties can constitute a misdemeanor, carrying the possibility of a fine of up to $5,000, up to six months in jail, or both.

For industrial employers in particular, the change is another reminder that safety responsibilities extend beyond written programs and employee training. Management and supervisors should understand their obligations when regulators conduct an investigation.

Employers should also review their leave policies.

SB 1149 expands California’s existing bereavement leave protections to include a “designated person.” That person may be related to the employee by blood or have an association considered equivalent to a family relationship.

Employees can identify the designated person when requesting leave, while employers may limit an employee to one designated person during a 12-month period.

HR teams should consider whether employee handbooks, manager guidance and leave-request procedures need to be updated before the law takes effect.

Employers subject to California’s demographic pay-data reporting requirements have another reason to make compliance a priority.

SB 1237 raises the maximum court-imposed penalty for a subsequent failure to submit a required report from $200 to $1,000 per employee.

For a company with a substantial workforce, that increase can quickly become significant. Employers subject to reporting requirements should make sure responsibilities, deadlines and internal processes are clearly established.

Not every change creates an immediate new obligation.

AB 1697, effective upon its September 30, 2026 enactment, delays previously enacted restrictions involving certain employment-related repayment provisions. Those restrictions will now generally apply to contracts entered into on or after January 1, 2027.

The additional time gives employers an opportunity to examine agreements involving areas such as bonuses and tuition repayment before the restrictions apply.

One change gives employers additional preparation time.

Beginning January 1, 2028, AB 1803 requires covered employers to add anti-hate-speech instruction to existing harassment-prevention training.

The required material is intended to provide practical guidance for recognizing, reporting and confronting workplace speech that vilifies, humiliates or encourages hatred based on protected characteristics.

Although implementation is still more than a year away, employers can begin considering how the requirement will fit into existing training programs.

The new legislation reaches other areas of employment law as well.

AB 2039 establishes protections against retaliation for qualifying good-faith disclosures of suspected attorney misconduct. Its reach isn’t limited to current employees and can include applicants, former employees, contractors, vendors, clients and others with certain professional relationships. AB 2155 addresses the enforceability of certain arbitration agreements, while AB 2563 establishes a broad and consistent interpretation of sex-discrimination protections across California statutes.

For employers, these changes provide another reason to periodically review employment agreements, policies and HR procedures with qualified legal counsel.

The number of changes can make California employment compliance seem like a moving target. Instead of waiting until January, employers can use the remainder of 2026 to identify which new laws apply to their organization and determine what needs to change.

That could include reviewing AI and automated decision-making practices, employee monitoring technology, leave policies, pay-data reporting procedures, repayment agreements and safety investigation protocols.

Managers and supervisors also need to know when policies change. Updating an employee handbook accomplishes little if the people responsible for implementing those policies aren’t aware of the new requirements.

For ICR clients and other California employers, the broader lesson is straightforward: workforce planning isn’t only about recruiting and retaining employees. It also means staying prepared as the rules governing the workplace evolve.

This article is intended for general informational purposes and should not be considered legal advice. Employers should consult qualified employment counsel regarding how specific laws apply to their organization.