New California Employment Laws for 2027: An Employer's Checklist, by Effective Date

September 30, 2026 was Governor Newsom's last bill-signing deadline — the final signing season of his term. Over the season he signed roughly eighteen employment bills and vetoed two. The 2027 class isn't the biggest California has produced, but it reaches into payroll, handbooks, HR technology, and the template agreements most companies haven't reread in years.

Most roundups list these bills alphabetically. This one is organized the way you'll actually work through them: by the date each obligation starts, with the employee-count thresholds that determine whether a given law applies to your company at all. Plain-English orientation for California employers — not legal advice for your specific situation.

Already in effect: the stay-or-pay reset (AB 1697)#

One bill in the class took effect the day it was signed. AB 1697, an urgency statute signed September 30, 2026, resets last year's AB 692 — the law that banned most “stay-or-pay” terms: training-repayment agreements, sign-on-bonus clawbacks, and similar provisions that charge an employee for leaving.

The reset does two things. It moves the ban's start line so that it applies only to contracts entered into on or after January 1, 2027 — eliminating the liability cloud over agreements signed during 2026 — and it adds exceptions, including compliant retention bonuses, repayment of advanced paid time off at voluntary separation, government-grant-funded recruitment programs, and certain regulated-industry sign-on arrangements.

• Applies to: every employer that uses training-repayment, relocation-clawback, tuition, or retention-bonus agreements.
• Do now: any such agreement you intend to sign on or after January 1, 2027 must fit one of the exceptions. Rewrite the templates this quarter — don't discover the problem inside a signed offer letter in February.

January 1, 2027 — the big batch#

Minimum wage: $17.40, and a $72,384 exempt-salary floor#

California's statewide minimum wage rises to $17.40 per hour on January 1, 2027 (from $16.90), per the Department of Finance's July 2026 inflation certification under Labor Code section 1182.12. Because the white-collar exemptions require a salary of at least twice the state minimum wage for full-time work, the exempt-salary floor rises to $72,384 per year ($6,032 per month).

• Applies to: every employer, every size.
• Do now: update payroll for January 1; audit every exempt employee against the new floor — a white-collar-exempt manager at $70,000 loses the exemption on New Year's Day; post the new wage notice; and remember that local ordinances and the fast-food and healthcare industry minimums run higher than the state rate.

Bereavement leave for a “designated person” (SB 1149)#

California's existing five-day bereavement-leave law (Government Code section 12945.7) extends on January 1 to the death of a “designated person” — someone related by blood, or whose association with the employee is the equivalent of a family relationship. The employee identifies the person when requesting leave, and you may limit employees to one designated person per 12-month period.

• Applies to: employers with 5 or more employees.
• Do now: update the handbook's bereavement policy and your leave-request form to add the designated-person category and the once-per-12-months limit.

Two workplace-surveillance bans (AB 1331 and AB 1883)#

AB 1331 bans workplace-surveillance tools in workplace bathrooms — including tracking how often employees use them — and lets employees set aside tracking devices before entering, with narrow exceptions including voluntary use, badges and personal alarms without audio-video recording or embedded AI, one-time entry and exit checks, and legally required surveillance. AB 1883 bans workplace surveillance tools that purport to detect or predict emotional state, or that collect neural data, with an exception for tools used to ensure worker safety. Both carry civil penalties of up to $500 per violation, enforced by the Labor Commissioner and public prosecutors — and commentators flag potential PAGA exposure on top.

• Applies to: employers using monitoring technology — which, once you count badge systems, fleet trackers, and productivity software, is most of them.
• Do now: inventory every monitoring tool: where cameras point, whether badges or phones track location continuously, and whether any vendor product advertises “sentiment analysis” or emotion detection — a common feature in contact-center and collaboration analytics that needs review (and likely disabling) before January 1.

Immigration-related retaliation penalties (AB 2495)#

Labor Code section 1019's protections expand to cover retaliation based on perceived immigration status against workers who exercise employment rights, with civil penalties of up to $10,000 per employee per violation.

• Applies to: every employer.
• Do now: update the anti-retaliation policy and train frontline managers — the exposure is per employee, and the subject matter is not hypothetical in the current enforcement climate.

Misclassification penalties become employee-recoverable (SB 1444)#

Labor Code section 226.8's willful-misclassification penalties — $5,000 to $15,000 per violation, and up to $25,000 for a pattern or practice — have historically flowed to the state. Starting January 1, a worker bringing a wage claim before the Labor Commissioner can recover those amounts personally, as damages. That changes the settlement math on every contractor dispute.

• Applies to: every business that engages independent contractors.
• Do now: audit your 1099 relationships against the ABC test before the new leverage arrives. Converting a misclassified contractor is itself delicate — do it with counsel, not by quietly flipping them to W-2.

The rest of the January 1 class, briefly#

• AB 2155 — arbitration agreements: California law now mirrors the Federal Arbitration Act's limits, codifying that agreements are unenforceable for transportation workers and for sexual-harassment and assault claims covered by the federal EFAA. Have your arbitration agreement reviewed for carve-out language.
• AB 2563 — sex-discrimination definition: harmonizes and broadens the definition across FEHA and related codes, expressly covering actual or perceived nonconformity with sex or gender stereotypes. Review dress and grooming codes and EEO policy language. (FEHA's discrimination provisions apply at 5+ employees.)
• SB 1237 — pay-data reporting penalties: for employers with 100 or more employees (including labor-contractor workers), the court-imposed penalty for a repeat failure to file the annual pay-data report rises from up to $200 to up to $1,000 per employee. First affected cycle: the report due in spring 2027. If you've never filed and should have, cure it now.
• SB 951 — layoffs caused by AI: Cal-WARN notices (generally: employers with 75+ employees at a covered establishment) must now disclose when a mass layoff results in whole or substantial part from artificial intelligence or automation, and identify the affected functions. Update the notice template before you need it.
• SB 1316 — Labor Commissioner proceedings: extends the Commissioner's wage liens and bars employers from introducing payroll or employment records at Labor Commissioner hearings that weren't timely produced. The compliance lesson is record hygiene: produce contemporaneously, keep records in California.
• AB 1961 — workplace-violence restraining orders: an employer-favorable one — you can now seek a single restraining order protecting an identifiable group of employees without naming each individual.
• Sector-specific: AB 2646 sets a $19.75 minimum wage for H-2A agricultural workers and those in corresponding employment, and AB 2321 creates a Cal/OSHA criminal-referral pilot in Alameda and Santa Clara counties covering workplace fatalities and serious multi-employee injuries — Bay Area employers should fold it into their inspection-response protocol.

July 1, 2027 — the No Robo Bosses Act (SB 947)#

The headline bill of the class, and a first-in-the-nation law. SB 947 regulates “automated decision systems” — AI, machine-learning, or statistical tools that score, classify, or recommend in ways that assist or replace human decision-making about workers. Newsom vetoed the broader 2025 version; the narrowed 2026 bill got his signature on the final day. Its obligations begin July 1, 2027, which is exactly the runway most companies will need:

• No sole reliance. You cannot discipline or terminate an employee based exclusively on an automated system's output.
• Human corroboration. Where an automated system's output is the primary basis for discipline or termination, a human must review it and corroborate it with independent evidence — managerial evaluations, personnel records, work product, witness interviews. Output that is uncorroborated, inaccurate, or misleading can't be used.
• Written notice. The affected employee gets a standalone, plain-language notice explaining the system's role, confirming human review, providing a contact, and describing the right to request a meaningful description of the employee data the system used.
• Prohibited uses. Systems may not be used to infer protected characteristics, predict or act on the exercise of legal rights, or evade labor and civil-rights compliance.

On enforcement, the final law is narrower than its earlier drafts: the express private right of action was dropped before passage. Enforcement runs through the Labor Commissioner — by citation or civil action — and public prosecutors, with civil penalties of up to $500 per violation plus injunctive relief, attorney's fees, and other remedies, and once an employee shows an automated system was used, the burden shifts to the employer to show either that it didn't primarily rely on the system or that it complied with the review-and-notice requirements. Commentators are already flagging possible PAGA exposure on top. The practical first step is an inventory: list every HR tool that scores, ranks, or flags employees — productivity monitoring, scheduling optimizers, performance analytics — then build the documented human-review step and the notice template before summer.

January 1, 2028 — two with a long runway#

• AB 1803 — harassment-training content: the required sexual-harassment prevention training (employers with 5+ employees) must add a module on recognizing and reporting speech that vilifies protected characteristics. Confirm your training vendor's 2028 curriculum covers it; no separate program is required.
• AB 2179 — restraining-order procedure: no-cost remote appearances and mandatory e-filing for workplace-violence restraining-order petitions become required court capabilities.

What didn't happen#

• PAGA stayed quiet — legislatively. No 2026 statutory amendments; the operative framework remains the July 2024 reform package, though the LWDA's PAGA rulemaking stayed active during 2026 and is worth watching.
• Vetoed: AB 1940, which would have added perimenopause and menopause to FEHA's definition of sex (expect reintroduction under the next administration), and AB 2721, which would have required hotels to disclose immigration-enforcement reservations.

The five documents to update before January 1#

If you strip the class down to what actually has to change on paper, it's five documents:

• 1. The handbook. Bereavement policy (designated person), anti-retaliation policy (immigration status), EEO and dress-code language (sex-stereotyping), and — if you have one — the monitoring-technology policy.
• 2. Payroll and the compensation plan. $17.40 floor, $72,384 exempt-salary audit, local-ordinance check, new posters.
• 3. Template agreements. Stay-or-pay, training-repayment, and retention-bonus terms against AB 1697's exceptions; arbitration agreements against AB 2155's carve-outs.
• 4. The Cal-WARN notice template. AI-causation disclosure fields, even if you never expect to use them.
• 5. The AI and monitoring-tool inventory. Not a document you have — a document to create. List every system that watches, scores, or ranks your people; it drives both the January surveillance compliance and the July No Robo Bosses build-out.

Most of this is handbook-and-templates work — exactly the kind of fixed-scope project that benefits from being done once, correctly, in the fall rather than piecemeal through 2027.