California's New Employment Laws: Get Ready for 2027

Governor Newsom signed numerous bills this year that expand and modify employer obligations. They include a statutory definition of "sex discrimination," expanded protections against immigration-related retaliation, new harassment training content, a one-year delay of the stay-or-pay contract ban, expanded bereavement leave, higher pay data reporting penalties, and new workplace violence and workplace safety enforcement tools.

Below, we summarize the key employment laws Governor Newsom signed this session and highlight steps employers with California workers should consider now. Unless otherwise noted, each law takes effect January 1, 2027.

Discrimination, Harassment, and Retaliation

AB 2495 – Expanded Protections Against Unfair Immigration-Related Practices

What it does: AB 2495 was approved by the governor on September 29, 2026, and amends Labor Code § 1019. Existing law already barred employers from using unfair immigration-related practices to retaliate against workers who exercise rights under state labor law or local ordinances. AB 2495 extends that protection to rights under any local, state, or federal law or regulation that applies to employees. Protected activity includes filing a good-faith complaint, seeking information regarding whether an employer is complying with the law, and informing others of their rights and helping them in asserting their rights. The law also adds a separate prohibition on any conduct related to a person's perceived immigration status that would reasonably tend to discourage the person from exercising those rights.

Unfair immigration-related practices include: (1) requesting more or different documents than federal law requires, or refusing documents that reasonably appear genuine; (2) using E-Verify at a time or in a manner that federal law or the applicable agreement does not require or authorize; (3) threatening to file, or filing, a false police report or agency complaint; and (4) threatening to contact, or contacting, immigration authorities. Conduct taken at the express and specific direction of the federal government is excluded. The protections under Labor Code § 1019 cover applicants, current employees, and former employees.

Enforcement: A violation within 90 days after a person exercises a protected right creates a rebuttable presumption of retaliation. A person's actual immigration status is irrelevant to liability. Violators face:

• a civil penalty of up to $10,000 per employee or person for each violation, payable to the person harmed and in addition to other remedies;
• reasonable attorneys' fees and costs, including expert witness costs, for a prevailing plaintiff; and
• suspension of the business licenses for the location where the violation occurred, for up to 14, 30, or 90 days for a first, second, or third and later violation.

Practical considerations: Employers may wish to update their anti-retaliation policies to address immigration-related statements and conduct specifically. They may also wish to train managers and staff involved in hiring, I-9 verification, and E-Verify on the expanded prohibitions.

AB 2563 – Statutory Definition of "Sex Discrimination"

What it does: AB 2563 was approved by the governor on September 30, 2026. The bill adds a definition of "sex discrimination" across more than two dozen California codes. For employers, the most relevant changes are the addition of Government Code § 27 and Labor Code § 12.3, and the amendment of Government Code § 12926 (FEHA's definitions section). Under both the Labor Code and FEHA, any existing ban on sex or gender discrimination now covers every characteristic in the new definition below, which the Legislature stated clarifies existing law and does not expand or narrow any existing rights or obligations.

AB 2563 defines "sex discrimination" to include discrimination based on any of the following actual or perceived characteristics or actions: (1) assigned sex or gender category, including female, male, or nonbinary; (2) degree of conformity to sex or gender stereotypes; (3) gender, including gender identity, gender expression, and access to, and use of, gender affirming care and other related healthcare; (4) pregnancy or related medical conditions, including childbirth, abortion, lactation, miscarriage, fertility, and contraception; (5) decision making about, access to, or use of a drug, device, product, or service relating to pregnancy or related medical conditions; (6) sexual orientation; and (7) variations in sex characteristics, including intersex traits or differences in sex development.

Application: If this definition conflicts with another law addressing sex discrimination, the more protective standard applies.

Practical considerations: Employers may wish to review their EEO, anti-harassment, and accommodation policies and related training to confirm they reflect each characteristic in the new definition, including perceived characteristics.

AB 1928 – Support Persons and Advisors in Postsecondary Sexual Harassment Proceedings

What it does: AB 1928 was approved by the governor on August 27, 2026. It amends Education Code § 66281.8 and adds Education Code § 66281.10. The bill applies to campuses of the University of California, the California State University, and the California Community Colleges, and to private and independent colleges and universities that receive state financial assistance. Under existing law, these institutions' grievance procedures for sexual harassment complaints must let each student party be accompanied by a support person or an advisor. AB 1928 requires that each party be allowed both a support person and an advisor of their choice. Either may accompany the party at any stage of the process, including reporting, investigation, hearing, sanctioning, and informal resolution. This applies to proceedings under both state law and Title IX. The support person may not act as the advisor, and institutions are not required to provide a support person.

Practical considerations: Covered institutions may wish to update their sexual harassment grievance procedures and related notices to reflect the right to both a support person and an advisor.

AB 1803 – Anti-Hate Speech Training

What it does: AB 1803 was approved by the governor on September 27, 2026. It amends Government Code § 12950.1, which requires employers with five or more employees to provide sexual harassment prevention training every two years. Beginning January 1, 2028, that training must also include anti-hate speech training. The anti-hate speech component must give supervisors and employees practical guidance on recognizing, reporting, and confronting workplace speech that vilifies, humiliates, or incites hatred against people based on any characteristic protected under FEHA. Training that already covers unlawful harassment and the prevention of abusive conduct based on those protected characteristics satisfies the new requirement. The bill does not change the existing training hours: two hours for supervisors and one hour for nonsupervisory employees.

Practical considerations: Employers may wish to confirm that their training content or vendor will include the anti-hate speech component before January 1, 2028. Employers that provide training in 2027 may wish to consider adding the component early, so that employees on a two-year cycle are covered once the requirement takes effect.

Contracts and Dispute Resolution

AB 1697 – Stay-or-Pay Contract Restrictions Delayed to 2027

What it does: AB 692 added Business and Professions Code § 16608, which restricts "stay-or-pay" provisions requiring workers to repay employer-provided amounts if their employment ends. We discussed it in our June 2026 alert. AB 1697 was approved by the governor on September 30, 2026. It amends Business and Professions Code § 16608 and Labor Code § 926, and it took effect immediately as an urgency statute. The restrictions now apply only to contracts entered into on or after January 1, 2027, rather than January 1, 2026. No liability accrues for conduct between January 1, 2026, and AB 1697's effective date, and any pending claims based on that period are moot.

Changes to exceptions: AB 1697 broadens the existing exception for discretionary or unearned payments, such as bonuses, so it is no longer limited to payments made at the outset of employment. The exception's other conditions still apply. AB 1697 also adds three new exceptions:

1. recruitment or retention bonuses under government grant-funded programs, if repayment does not exceed the grant's service obligations;
2. inducement payments by securities broker-dealers, insurance producers, or investment advisors to registered or licensed agents, subject to specified conditions; and
3. repayment of advanced paid time off upon voluntary separation, if the terms are disclosed separately, repayment is capped at 40 hours, and no interest accrues.

Enforcement: Remedies under Labor Code § 926 are unchanged. A worker or worker representative may bring a civil action, including on behalf of similarly situated workers. A violator is liable for actual damages or $5,000 per worker, whichever is greater, plus injunctive relief and reasonable attorney's fees and costs.

Practical considerations: The drafting guidance in our June alert largely still applies, but the compliance date has moved to January 1, 2027. Employers may wish to complete their review of repayment agreements, bonus clawback provisions, and advanced-PTO repayment terms before that date.

AB 2155 – Arbitration Agreements Unenforceable Under State Law Where the FAA Would Not Enforce Them

What it does: AB 2155 was approved by the Governor on June 30, 2026, and amends Section 1281 of the Code of Civil Procedure, part of the California Arbitration Act. Under the amendment, a written arbitration agreement is not enforceable under California law to the extent it would not be enforceable under the Federal Arbitration Act (FAA). The Legislature stated that the purpose is to bring all of the FAA's exclusions into California law. The Legislature specifically identified two exclusions. The first is the FAA's exemption for "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce," commonly referred to as the transportation worker exemption. The second covers claims relating to sexual harassment or sexual assault disputes covered by the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. As a result, an arbitration agreement that falls within one of these exclusions is not enforceable under the California Arbitration Act either.

Practical considerations: Employers that have relied on the California Arbitration Act to enforce arbitration agreements that fall outside the FAA may wish to reassess those agreements. Examples include agreements with transportation workers who are exempt from the FAA and agreements covering sexual harassment or sexual assault claims. Because the Legislature stated that it wants to bring all of the FAA exclusions into California law, employers may wish to consider whether other FAA exclusions could also affect their agreements. Employers may also wish to review the choice-of-law and governing-statute provisions in their arbitration agreements.

AB 1950 – Expanded Court-Ordered Mediation in Los Angeles County

What it does: AB 1950 was approved by the governor on August 27, 2026, and adds Section 1775.16 to the Code of Civil Procedure. Beginning January 1, 2027, AB 1950 will allow the Superior Court of Los Angeles County to order any civil case into mediation, regardless of the amount in controversy. Cases must still meet all other existing conditions for court-ordered mediation. Parties receive up to three hours of no-cost mediation and may appear remotely. The mediation cannot delay the trial date or serve as grounds to continue it. The law is a pilot program that will be repealed on January 1, 2032.

Practical considerations: Employers litigating in Los Angeles County Superior Court may wish to continue preparing for trial while any court-ordered mediation is pending.

Pay Equity and Data Reporting

SB 1237 – Increased Penalties for Repeat Pay Data Reporting Failures

What it does: As we reported last year, SB 464 expanded California's pay data reporting requirements, including by making civil penalties mandatory for employers that fail to file the required report. Most of SB 464 took effect January 1, 2026. However, its expansion of the reportable job categories from 10 to 23 becomes operative January 1, 2027. SB 1237 was approved by the governor on September 30, 2026, and amends the version of Government Code § 12999 that SB 464 made operative January 1, 2027. Beginning on that date, it raises the maximum civil penalty for a subsequent failure to file a pay data report from $200 to $1,000 per employee. The penalty for a first failure to file remains up to $100 per employee. The reporting obligation still applies to private employers with 100 or more employees, and to private employers with 100 or more employees hired through labor contractors, with reports due by the second Wednesday of May each year.

SB 1237 also requires the Civil Rights Department to publish annually, in aggregate form, the total number of pay data reports submitted.

Practical considerations: Covered employers may wish to confirm they are prepared to report on the expanded 23 job categories for the May 2027 filing. Employers that use labor contractors may also wish to confirm the contractors will supply the required pay data on time. A court may apportion penalties to a labor contractor whose failure to provide data prevents a complete report, but the employer remains responsible for filing.

Workplace Safety

AB 1961 and AB 2179 – Making Workplace Violence Restraining Orders Easier to Obtain

What they do: AB 1961 and AB 2179 were approved by the governor on September 30, 2026, and they amend Code of Civil Procedure § 527.8 to make it easier for employers to seek and obtain workplace violence restraining orders. Existing law already lets an employer seek a workplace violence restraining order on behalf of an employee who has suffered harassment, unlawful violence, or a credible threat of violence. At the court's discretion, the order can also cover other employees. The bills expand this process in three ways:

1. Petitions for all employees at a location (AB 1961). Harassment, violence, or a threat may be directed at a workplace or a location where a group of employees performs their primary job duties, rather than at a specific employee. In that case, the employer may seek an order on behalf of all employees there without naming any individual employee. The resulting order may bar the respondent from contacting the workplace or location, directly or indirectly, and from coming within a specified distance of it.
2. Remote appearances (AB 2179). Beginning January 1, 2028, any party or witness may appear remotely at the hearing on a petition, and courts may not charge a fee for doing so.
3. Electronic filing (AB 2179). Beginning January 1, 2028, courts must accept petitions and related filings electronically and act on them based on when they are received. A petitioner who files electronically will receive the court's responsive documents electronically, including any temporary restraining order.

The Judicial Council must adopt or modify the necessary forms by January 1, 2028. AB 1961 also confirms that "employee" includes volunteers and independent contractors who perform services at the employer's worksite. The bill states that this clarification is declaratory of existing law.

Practical considerations: Employers may wish to update their workplace violence prevention plans and threat-response procedures to reflect the new option to petition on behalf of all employees at a location and to note the January 1, 2028 start date for remote appearances and electronic filing and provide this option to employees who are the targets of harassment or actual or threatened violence. Before filing a petition on behalf of a specific employee, employers must still give that employee an opportunity to decline to be named.

AB 2321 – Expanded Criminal Enforcement for Cal/OSHA Violations

What it does: AB 2321 was approved by the governor on September 30, 2026. It amends Labor Code §§ 6314, 6315, 6315.3, 6322, 6409.2, and 6425. The bill makes three main changes.

1. New misdemeanor. It is now a misdemeanor to willfully resist, prevent, impede, or interfere with Cal/OSHA inspections and investigations, or to willfully violate a related court order. The penalty is up to six months in county jail, a fine of up to $5,000, or both.
2. Broader criminal liability. Existing law makes it a crime to willfully violate a safety standard or order when the violation causes death or permanent or prolonged bodily impairment. AB 2321 adds violations that cause serious injury, illness, or exposure. Fines for corporations and limited liability companies can reach $1.5 million for a first conviction, and more for repeat convictions.
3. More prosecutor referrals. Cal/OSHA's Bureau of Investigations must now investigate any serious injury, illness, or exposure for which Cal/OSHA issues a willful-violation citation. Cal/OSHA must immediately notify the appropriate prosecutor of accidents involving serious injury, illness, or exposure to five or more employees, a death, or a request for prosecution. Fire and police agencies that respond to serious workplace accidents, now including serious exposures, must notify both Cal/OSHA and the county district attorney.

AB 2321 also allows Cal/OSHA to share confidential trade secret information with law enforcement and prosecutors in a law enforcement investigation or prosecution.

Practical considerations: Employers may wish to review their inspection-response procedures and train on-site managers, given the new misdemeanor for interfering with an inspection. Employers keep the right to require a warrant when permission to inspect is refused. Given that prosecutors are more likely to be notified of serious workplace incidents, employers may also wish to review their incident-response and documentation practices.

Labor Commissioner Enforcement and Procedure

SB 1316 – Records Not Timely Produced to the Labor Commissioner Cannot Be Used as Evidence

What it does: SB 1316 was approved by the governor on August 27, 2026. It amends Labor Code §§ 98.2 and 1174.1 and adds Labor Code § 1742.05.

1. Evidence preclusion. Under existing law, an employer that did not produce records on time after a written Labor Commissioner request could not introduce those records in certain citation proceedings. SB 1316 expands that rule in three ways:
   • Within those proceedings, employers now cannot "in any other way" use or rely on those records as evidence, including to impeach a witness.
   • The rule now also applies to proceedings contesting citations on retaliation or discrimination complaints.
   • It revises which records are covered. The rule now reaches payroll, time, and employment records the employer is required to maintain, including records required under Labor Code §§ 226, 247.5, 432.3, 1174, 1197.5, 1198.5, 2052, and 2673 and the records provisions of the Industrial Welfare Commission wage orders.

   The rule is limited to Labor Commissioner citation proceedings and related writ proceedings. SB 1316 does not extend it to private civil lawsuits.

2. Public works. When the Labor Commissioner finds a willful violation on a public works project, the Commissioner may issue a civil wage and penalty assessment, which the contractor or subcontractor may contest. A contractor or subcontractor that does not produce requested records on time can no longer use those records as evidence in that challenge.
3. Liens. To help collect unpaid wages awarded to employees, the Labor Commissioner may record a lien on an employer's real property. Previously, the lien expired after 10 years. The Labor Commissioner may now renew it for additional 10-year periods.

Exceptions: When the Labor Commissioner allows at least 15 days to respond, an employer that timely tells the Labor Commissioner, in good faith, that it needs more time to gather the records receives an automatic 15-day extension. In that situation, preclusion also does not apply if the late production resulted from an inadvertent clerical error and the employer produces the records within 20 days of the original request. Regardless of the response period, preclusion also does not apply if, before a citation issued under Labor Code § 98.74, 558, or 1197.1, the employer challenged the request in court and the court ruled the records need not be produced. The Labor Commissioner may also accept late records if the employer cooperated, substantially complied, and made good-faith efforts to comply.

Practical considerations: Employers may wish to make sure written Labor Commissioner records requests reach the right personnel promptly. If more time is needed, employers may wish to request it in good faith before the deadline.

SB 1444 – Electronic Service in Labor Commissioner Wage Claims and Employee Recovery of Misclassification Penalties

What it does: SB 1444 was approved by the governor on August 27, 2026, and amends several Government, Labor, and Unemployment Insurance Code sections. Two of its changes are notable for employers:

1. Electronic service. In wage claim proceedings before the Labor Commissioner, notices and decisions may now be served by first-class or registered mail, or by any method a party agrees to, including electronic service. A party represented by an attorney must give the Labor Commissioner the attorney's email address and must accept electronic service.
2. Misclassification penalties. Under existing law, the Labor Commissioner and public prosecutors may recover the civil penalties for willful misclassification as an independent contractor as damages payable to the employee. SB 1444 allows the employee to seek that recovery directly in a wage claim before the Labor Commissioner. The penalties remain $5,000 to $15,000 per violation, or $10,000 to $25,000 per violation for a pattern or practice of violations. As under existing law, the employee may recover either these damages or a Private Attorneys General Act (PAGA) penalty for the same violation, but not both.

Other Notable Developments

SB 1149 – Bereavement Leave Expanded to Include "Designated Persons"

What it does: SB 1149 was approved by the governor on September 27, 2026, and amends Government Code § 12945.7. Employers with five or more employees must already provide up to five days of bereavement leave when a family member dies. SB 1149 adds a "designated person" to the definition of family member. A "designated person" is anyone 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 leave, and employers may limit employees to one "designated person" per 12-month period.

The existing rules otherwise stay the same:

• The employee must have worked for the employer for at least 30 days before the leave begins.
• The days of leave need not be consecutive, and the leave must be completed within three months of the death.
• Unless the employer's policy provides paid leave, the leave may be unpaid. However, the employee may use available vacation, personal leave, sick leave, or compensatory time off.
• If the employer requests it, the employee must provide documentation of the death within 30 days of the first day of leave.

Practical considerations: Employers may wish to update their bereavement leave policies and leave request forms to include "designated persons." Employers that choose to limit employees to one "designated person" per 12-month period may also wish to state that limit in the policy.

AI and Workplace Technology

Governor Newsom also signed several bills addressing artificial intelligence and workplace technology:

Workplace AI and Surveillance

• SB 947 – "No Robo Bosses Act" – automated decision systems in discipline and termination (key provisions operative July 1, 2027)
• SB 951 – AI-related layoffs and Cal-WARN notices
• AB 1331 – Workplace surveillance in bathrooms
• AB 1883 – Workplace surveillance tools using neural data or emotion recognition

AI Audits

• AB 1405 – Registration of AI auditors
• SB 813 – Independent verification organizations for AI

AI in Advertising and Likeness

• SB 1050 – Disclosure of synthetic performers in advertising
• SB 1111 – Digital replicas under California's right of publicity statute

AI in Legal Practice

• SB 574 – Attorneys' and arbitrators' use of generative AI

DWT discusses these laws in a separate alert, available here.

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Julie Capell and Ben Gipson are partners and Frances Choi is an associate in DWT's Los Angeles office. DWT will continue to track these new laws, including the Judicial Council forms and other implementation steps still to come, and will share updates as they become available. Employers with California workers may wish to review their handbooks, workplace policies, agreements, and training programs before the effective dates discussed above. Some requirements take effect later, on January 1, 2028. For questions about these laws, please contact Julie, Ben, Frances, or another member of DWT's employment services group. To stay informed, sign up for our alerts.