New California Employment Laws for 2027: What Employees and Employers Need to Know

Most of California’s new employment laws take effect January 1, 2027. They bring a $17.40 minimum wage, limits on AI and surveillance at work, a ban on most stay-or-pay contracts, and broader bereavement leave. One major AI law, SB 947, follows on July 1, 2027.

Key takeaways

California’s statewide minimum wage rises to $17.40 per hour on January 1, 2027. The minimum salary for most exempt employees rises to $72,384 per year.

Several laws address technology at work. Starting January 1, 2027, employers may not use AI surveillance tools to read employees’ emotions or collect neural data, and surveillance tools are barred from workplace bathrooms. Starting July 1, 2027, an employer may not discipline or fire an employee based solely on an automated decision system, and a human must review the decision.

Contracts, retaliation and leave change too. Most contract terms that make a worker repay the employer for leaving are barred in contracts signed on or after January 1, 2027. Penalties of up to $10,000 per person apply to conduct tied to a worker’s perceived immigration status that discourages them from using workplace rights. Employees may also take bereavement leave for a “designated person,” not only listed family members.

Governor Newsom’s deadline to sign or veto 2026 bills was September 30, 2026. The laws below were signed unless this article says otherwise.

California employment laws taking effect in 2027, at a glance

What is California’s minimum wage in 2027?

California’s statewide minimum wage is $17.40 per hour starting January 1, 2027, up from $16.90. The rate applies to employers of every size. The increase is an automatic inflation adjustment under existing law, certified on July 31, 2026.

The exempt salary figure matters because California requires most exempt employees to earn at least twice the state minimum wage for full-time work. An employee paid less is generally owed overtime, whatever the job title. Salary is only one part of the test. The employee’s actual duties must also qualify.

Several other rates sit above the state floor.

Many cities and counties set higher local minimum wages, and several adjust on January 1 or July 1. The City of Los Angeles rate has been $18.42 since July 1, 2026. The higher rate applies where the work is performed.

Covered health care facilities follow a separate schedule, with rates from $19.28 to $25 per hour depending on the facility type. In agriculture, AB 2646 covers “approved agricultural employees,” largely H-2A visa workers, and California residents doing the same work for the same employer in the same county. That rate adjusts each January by the Social Security cost-of-living figure.

For employees: check your first January pay stub. If you are salaried and paid under $72,384, ask whether you are still classified as exempt.

For employers: update payroll, wage notices and postings before January 1. Review every exempt employee near the new threshold.

Can an employer use AI to discipline or fire an employee in California?

Yes, but not on AI alone. Starting July 1, 2027, SB 947, known as the “No Robo Bosses Act,” bars an employer from relying solely on an automated decision system to discipline or terminate an employee. The law applies to public and private employers of every size. It covers current employees, not job applicants.

An automated decision system is broader than what vendors label “AI.” It includes any computational process that produces a score, classification or recommendation used to assist or replace a human decision. Productivity scores, attendance flags and performance dashboards can qualify.

When an employer relies primarily on a system’s output, SB 947 requires three things.

The first is human review. A person must corroborate the output using the underlying data or other information, such as supervisor evaluations, personnel files, work product or witness interviews. If the reviewer cannot corroborate it, the employer may not use it.

The second is written notice. When the employee is told of the decision, the employer must give a separate plain-language notice. It must say an automated system was primarily relied on, that a human reviewed it, that retaliation is prohibited, and whom to contact.

The third is access to data. An employee may ask once a year for a description of their own data the system used over the prior 12 months.

SB 947 also bars using these systems to infer a protected characteristic or to predict that a worker will exercise legal rights and then act against them. Once it is shown that a system was used, the employer must prove it did not primarily rely on it or that it complied.

The Labor Commissioner and public prosecutors enforce SB 947, with a civil penalty of $500 per violation. The final law has no express right for employees to sue directly, and how courts will treat private claims is not yet settled.

Layoffs caused by AI: SB 951

Starting January 1, 2027, a Cal/WARN notice must say so when a mass layoff, relocation or closure is caused in whole or substantial part by AI or other automation. Cal/WARN generally covers facilities with 75 or more employees. The notice must label the event a technology displacement and identify the affected positions, the job functions automated and the technology involved. The 60-day notice period does not change. Violations carry penalties of up to $500 per day, plus back pay and benefits.

Emotion recognition, neural data and bathrooms: AB 1883 and AB 1331

Starting January 1, 2027, two laws limit workplace surveillance tools. These are devices or software that collect employee data, activity, communications or biometrics by means other than a person’s direct observation.

AB 1883 bars AI-powered tools that recognize, infer or predict an employee’s emotional state, or that collect neural data. Software that scores mood or stress from email, chat or call recordings is likely covered. The law keeps an exception for safety monitoring, and its scope is not yet clear.

AB 1331 bars surveillance tools in workplace bathrooms, with limited exceptions. Employees may leave employer-issued tracking devices behind when they enter.

Each law carries a civil penalty of up to $500 per violation, enforced by the Labor Commissioner and public prosecutors. Published commentary differs on whether employees may also sue directly under AB 1883.

A January 1, 2027 privacy deadline

A separate set of rules also arrives January 1, 2027. Businesses covered by the California Consumer Privacy Act that already use automated decisionmaking technology for significant employment decisions must comply with state privacy regulations by that date. Those rules require a pre-use notice, an opt-out right in many cases, and risk assessments. Complying with SB 947 does not satisfy them.

For employees: if you are disciplined or fired after July 1, 2027, you can ask whether an automated system was used and request the data it relied on.

For employers: inventory every tool that scores or flags employees. Ask vendors in writing what each tool infers. Build a documented human review step and a notice template before July 1, 2027.

Are stay-or-pay agreements legal in California in 2027?

Mostly no. For contracts signed on or after January 1, 2027, California bars most terms that make a worker pay the employer, a training provider or a debt collector when the job ends. The ban comes from AB 692, passed in 2025. It was first set to apply to 2026 contracts.

AB 1697, signed September 30, 2026, moved the start date to January 1, 2027, effective immediately. It also removed liability for conduct during 2026. Contracts signed before 2027 are not covered by the new ban, though other California laws may still limit them.

The ban reaches three kinds of terms: repayment of a debt on separation, restarting collection on separation, and any penalty, fee or cost for leaving. Training repayment agreements are the common example.

The main exceptions each have conditions:

A covered term that fits no exception is void. A worker may sue and recover the greater of actual damages or $5,000, plus attorney’s fees.

For employees: before you sign a repayment term in 2027, read the conditions above. An employer relying on the bonus exception must give you five business days to consult a lawyer.

For employers: revise offer letters, bonus agreements, relocation agreements and training agreements before January 1.

What changes for arbitration agreements?

Starting January 1, 2027, AB 2155 makes an arbitration agreement unenforceable under California’s arbitration statute to the extent it is unenforceable under the Federal Arbitration Act. Two groups are most affected: transportation workers engaged in interstate commerce, and people bringing sexual harassment or sexual assault claims. Employers can no longer fall back on state law to compel arbitration when a federal exemption applies.

Can an employer use immigration status against a worker?

Not to retaliate against a worker or to discourage the use of workplace rights. California already bars unfair immigration-related practices used to retaliate against workers. Starting January 1, 2027, AB 2495 widens that rule in Labor Code section 1019.

It will be unlawful to engage in conduct related to a person’s perceived immigration status that would reasonably tend to dissuade them from exercising a workplace right. The same applies to conduct that pushes a person into something they have a right to refuse. The worker’s actual immigration status is irrelevant to liability.

The protection covers applicants, employees and former employees. The civil penalty is up to $10,000 per person for each violation, payable to the person harmed.

For employees: California’s labor protections apply to workers regardless of immigration status.

For employers: train supervisors never to raise immigration status, documents or immigration authorities in a wage, attendance or complaint dispute.

How is California’s discrimination law changing?

Starting January 1, 2027, AB 2563 expands the definition of “sex” in the Fair Employment and Housing Act. The definition will expressly include several additions.

It will cover a person’s assigned sex or gender category, including female, male or nonbinary, and the degree to which a person conforms to sex or gender stereotypes. It will cover access to and use of gender-affirming care and related health care. It will also cover decisions about, and use of, care, drugs or services relating to pregnancy and related conditions, and variations in sex characteristics, including intersex traits.

One related bill did not become law. The Governor vetoed AB 1940, which would have added menopause and related conditions to the definition.

A training change follows a year later. Starting January 1, 2028, AB 1803 requires employers’ harassment prevention training to cover recognizing, reporting and confronting workplace hate speech. That training already applies to employers with five or more employees.

What is changing in pay data reporting?

Two changes apply to private employers with 100 or more employees, which must file annual pay data reports with the Civil Rights Department.

First, under SB 464, reports move from 10 job categories to 23 starting January 1, 2027. The first report on the new categories is due May 12, 2027.

Second, under SB 1237, the penalty for a repeat failure to file rises from up to $200 to up to $1,000 per employee. The first-failure penalty stays at up to $100 per employee.

Who counts for bereavement leave in 2027?

Starting January 1, 2027, SB 1149 lets an employee take bereavement leave after the death of a “designated person.” That means any individual related by blood, or whose association with the employee is the equivalent of a family relationship. Until now, the law listed only a spouse, child, parent, sibling, grandparent, grandchild, domestic partner or parent-in-law.

The rest of the law stays the same.

It applies to employers with five or more employees, and the employee must have worked there for at least 30 days. Leave is up to five days, which need not be consecutive, taken within three months of the death. Leave is unpaid unless the employer’s policy pays for it, and employees may use accrued vacation or sick leave.

The employee may name the designated person when requesting leave. An employer may limit an employee to one designated person per 12-month period.

For employers: update the bereavement policy and leave request form before January 1.

What else changes for workplace safety and enforcement?

Workplace violence restraining orders become easier to obtain. Starting January 1, 2027, AB 1961 lets an employer seek a restraining order protecting all employees at a workplace when a threat targets the site generally. No individual employee needs to be named. A companion law, AB 2179, adds electronic filing and remote appearances starting January 1, 2028.

Wage judgments become easier to collect. Starting January 1, 2027, SB 1316 lets the Labor Commissioner renew a wage judgment lien on an employer’s real property for further 10-year periods. An employer that fails to produce payroll or time records on time may not use them later in a retaliation hearing.

Two narrower laws also start January 1, 2027. AB 2150 requires employers that mandate CPR certification to also require an approved online module on naloxone. AB 1838 requires contractors bidding on local public works to disclose wage and hour violations from the prior five years.

What should California employers do before January 1, 2027?

Start with pay. Raise hourly pay to at least $17.40, or the higher local or industry rate, and update wage notices and postings. Re-test every exempt classification against the $72,384 salary minimum and the duties test.

Next, update contracts and policies. Revise repayment terms in offer letters and in bonus, relocation and training agreements. Add the designated person rule to the bereavement policy and leave forms. Update anti-discrimination policies for the expanded definition of sex, and train supervisors on immigration-related conduct and retaliation. Review arbitration agreements, especially for drivers and other transportation workers.

Then review workplace technology. Inventory monitoring tools, turn off emotion inference and neural data features, and confirm nothing monitors bathrooms. Add an AI and automation question to every layoff plan that could trigger Cal/WARN. A business covered by the CCPA should complete notices, opt-out processes and risk assessments for automated decisionmaking tools.

Finally, employers with 100 or more employees should map jobs to the 23 new pay data categories before the May 2027 filing.

By July 1, 2027, employers that use scoring or flagging tools also need a documented human review process and a written notice template for SB 947.

What should California employees do?

Check your pay first. Look at your first pay stub in January 2027 and compare it with the state rate and your city or county rate. If you are salaried, paid under $72,384 and not paid overtime, ask how you are classified.

Read before you sign. Look for any term that requires repayment if you leave, and ask for time to review it.

Keep records. Save discipline notices, schedules, pay stubs and messages, and write down dates, names and what was said.

Know where to go. The Labor Commissioner’s Office handles wage and retaliation claims. The Civil Rights Department handles discrimination, harassment and protected leave. Employment claims have filing deadlines, and some are short. A lawyer can tell you which deadline applies to your situation.

Frequently asked questions

When do California’s new employment laws take effect?

Most take effect January 1, 2027. SB 947, the law on AI in discipline and termination, takes effect July 1, 2027. The stay-or-pay ban applies to contracts signed on or after January 1, 2027. The anti-hate speech training requirement in AB 1803 starts January 1, 2028.

What is the California minimum wage in 2027?

The statewide minimum wage is $17.40 per hour starting January 1, 2027, for employers of every size. Some cities, counties and industries require more. Fast food, health care and covered agricultural employees have separate, higher rates.

What is the minimum salary for exempt employees in California in 2027?

The minimum is $72,384 per year, or $6,032 per month, starting January 1, 2027. That equals twice the state minimum wage for full-time work. An exempt employee must also meet a duties test. Computer software professionals and hourly physicians have separate thresholds that the state sets each year.

Can AI fire me in California?

Not by itself after July 1, 2027. Under SB 947, an employer may not rely solely on an automated decision system to discipline or terminate an employee. If the employer relies primarily on the system, a human must review the decision and the employee must receive written notice.

Can my employer make me repay training costs if I quit?

For contracts signed on or after January 1, 2027, usually not. California bars most terms that require repayment when a job ends. Exceptions exist for certain bonuses, tuition for transferable credentials, advanced paid time off and a few other programs, each with conditions. Earlier contracts are judged under prior law.

Can I take bereavement leave for someone who is not a relative?

Yes, starting January 1, 2027, if your employer has five or more employees and you have worked there at least 30 days. You may take up to five days for a designated person whose relationship to you is the equivalent of family. Your employer may limit you to one designated person every 12 months.

Do the 2027 laws apply to small businesses?

Many do. The minimum wage, the AI and surveillance laws, the stay-or-pay ban and the immigration-related protections have no minimum employee count. Bereavement leave and harassment prevention training apply at five employees. Cal/WARN generally applies at 75 employees, and pay data reporting at 100.

Sources

The minimum wage and exempt salary figures come from the California Department of Industrial Relations, News Release 2026-66, dated August 13, 2026. The Governor’s office announced the signing of SB 947, SB 951, AB 1331 and AB 1883 in a September 30, 2026 news release. The text of each bill is linked in the table above and is published by the California Legislature at leginfo.legislature.ca.gov. The automated decision making regulations are published by the California Privacy Protection Agency.

Legal Disclaimer and Contact Information

The information provided in this article is for educational and informational purposes only and does not constitute formal legal advice. Reading this material does not create an attorney-client relationship. Every case involves unique facts, and individuals seeking guidance on their case should consult an experienced attorney for legal advice. For a free phone consultation with Attorney Thomas Lee, please call (213) 251-5533.