California’s New Employment Laws For 2027: What Employers Need to Know and Do
By Fred W. Alvarez, Hannah L. Jones, Daniel M. Bruggebrew, Allison Moser, Hannah Withers, Stacey Zartler, and Maya Mercado
California’s 2026 legislative session has come to a close, and the Governor has signed a number of new employment measures that will affect California employers in 2027 and beyond. The new laws address a range of workplace issues, including AI and automation, pay practices and reporting, leaves of absence, discrimination and harassment, and workplace safety.
This update highlights the significant employment laws enacted during the recently concluded legislative session, explains their practical implications, and identifies steps employers should consider taking now. Our focus is not simply on what changed, but on what employers need to know and do to prepare for the year ahead.
AI, Automation & the Workplace
| New Law | What Employers Need to Know | What Employers Should Do |
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Beginning July 1, 2027, employers may not rely solely on an Automated Decision System (“ADS”) to make disciplinary or termination decisions in employment. If an ADS is the primary basis for the decision, a human must independently corroborate the decision using the same data relied upon by the ADS. Employers must also notify the employee in writing of the use of the ADS when communicating the decision and provide certain information about the ADS-based decision. Upon request, the employer must provide the employee with a “meaningful, objective description” of the data used by the ADS. |
Employers should identify any ADS used in discipline or termination decisions and establish a human-review process that satisfies the new requirements. Employers should also work with vendors now to understand what data their systems use to make decisions and ensure they are prepared to provide employees with the required information about an ADS-based decision.
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| SB 951 – WARN Notice Updates for Layoffs Resulting from AI
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California WARN notices are required when a mass layoff is caused, in whole or substantial part, by AI or other automated technology. The WARN notice must include additional information about the use of the technology, including the job functions being automated. These new requirements take effect on January 1, 2027.
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When planning a potentially covered mass layoff, employers should identify early whether AI or automation is the cause of the employment actions. HR should coordinate with business and technology teams to understand and document the role of the technology and ensure that any required WARN notice includes the necessary information.
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AB 1883 – AI Workplace Surveillance
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Beginning January 1, 2027, employers may not use workplace surveillance tools that use AI to recognize, infer, or predict an employee’s emotional state or that collect neural data.
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Employers should inventory workplace surveillance and monitoring technologies, including tools provided by third-party vendors, and determine whether any features analyze employees’ emotional states or collect neural data.
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Pay Practices & Pay Data Reporting
| New Law | What Employers Need to Know | What Employers Should Do |
AB 1697 – “Anti-TRAP” Updates
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California’s “anti-TRAP” law, AB 692, took effect on January 1, 2026, restricting employers’ use of training and retention repayment provisions and other “stay-or-pay” arrangements. AB 1697 gives employers additional time—until January 1, 2027—to bring existing agreements into compliance. AB 1697 also makes an important substantive change: it removes the requirement that certain bonus repayment agreements be entered into at the “outset of employment” to be enforceable, potentially expanding the exception to cover retention bonuses and other discretionary bonuses offered later in employment.
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Employers should use the additional compliance period to identify existing agreements and arrangements that require employees to repay bonuses, training costs, or other amounts if they leave employment, and determine whether they comply with the amended law. Employers considering new retention or discretionary bonus programs should also evaluate whether the expanded bonus exception provides additional flexibility in structuring repayment provisions.
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SB 1237 – Increased Penalty for Pay Data Reporting Violations
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For 2027, the penalty for repeated failure to submit required pay data reports increases from $250 to $1,000 per employee. Beginning in 2027, employers must also report employees using the 23 Standard Occupational Classification (SOC) major groups, rather than the EEO-1 job categories previously used for California pay data reporting.
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Employers subject to California’s pay data reporting requirements should update their reporting processes to use the new SOC classifications and begin mapping employees to the appropriate categories well before the filing deadline. Given the significant increase in penalties, employers should also confirm responsibility and timelines for collecting, reviewing, and submitting required pay data. |
Leaves of Absence
| New Law | What Employers Need to Know | What Employers Should Do |
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SB 1149 – Expanded Bereavement Leave for a “Designated Person”
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Beginning January 1, 2027, employees may now take up to five days of protected bereavement leave following the death of a “designated person,” which is added to the list of qualifying family relationships. Employers may limit employees to one designated person in a 12-month period.
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Employers should update bereavement-leave policies and leave procedures to include designated persons and train HR personnel and managers on the expanded eligibility requirements. Employers that limit employees to one designated person per 12-month period should also establish a process for tracking those designations. |
Discrimination, Harassment & Workplace Training
| New Law | What Employers Need to Know | What Employers Should Do |
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AB 1803 – Anti-hate Speech Training
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Beginning January 1, 2028, employers must incorporate anti-hate speech training and education into California’s required sexual-harassment prevention training. | Employers should update their sexual-harassment prevention training materials to incorporate the new anti-hate speech requirements before the January 1, 2028 effective date. |
Workplace Safety
| New Law | What Employers Need to Know | What Employers Should Do |
AB 1961 – Workplace Violence Restraining Orders
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Beginning January 1, 2027, employers may seek workplace violence restraining orders in broader circumstances. Previously, an employer was required to identify a specific employee who faced a credible threat of violence and name that employee as a protected party. Under the new law, employers may seek an order protecting the workforce more broadly without identifying a specific employee as the target of the threat. |
Employers should consider pursuing workplace violence restraining orders when threats are directed at the workplace or workforce generally, even if no individual employee has been specifically targeted.
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The Coblentz Employment team is available to answer any questions you may have about the impact of these regulations.