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Rand L. Stephens & Richard Koss

California Employment Law Legislative Roundup: Key 2026 Changes for Employees

California Employment Law Legislative Roundup: Key 2026 Changes for Employees California lawmakers concluded the 2025–2026 legislative session on September 1 with a number of measures affecting workplace rights, discrimination and retaliation protections, pay equity, leave, arbitration, workplace surveillance, and the growing role of artificial intelligence in employment decisions. Some of these measures are already law and have gone into effect. Others have passed the Legislature but are still awaiting action from the Governor. For California employees, several of the changes could be particularly important because they affect how workers can challenge pay discrimination, exercise workplace rights, respond to immigration-related retaliation, and understand how employers use technology in the workplace. Here is a look at some of the most significant employment-related developments. SB 642: Expanded Pay Equity and Equal Pay Protections Senate Bill 642 was signed by Governor Gavin Newsom on October 8, 2025, and took effect January 1, 2026. The law makes several changes to California's Equal Pay Act and pay-transparency requirements. Among other changes, SB 642 revised California's definition of a "pay scale" for job postings to mean a good-faith estimate of the salary or hourly wage range an employer reasonably expects to pay when hiring for the position. It also changed the Equal Pay Act's language from comparing employees of the "opposite sex" to employees of "another sex." One of the more significant changes for employees is the expansion of the period in which an Equal Pay Act lawsuit may be brought. The statute of limitations was extended from two years to three years after the last date the cause of action occurs. The law also allows an employee who timely brings a claim to seek relief for the entire period during which the violation continued, subject to a six-year limit. For employees who believe they have been paid less because of sex, these changes can affect both the information available to them and the amount of compensation potentially at issue. SB 294: California's Workplace Know Your Rights Act Another law already in effect is Senate Bill 294, the Workplace Know Your Rights Act. Governor Newsom signed the measure on October 12, 2025, and it became effective January 1, 2026. The law requires California employers to provide employees with a standalone written notice describing specified workplace rights. The notice must be provided to current employees annually and to new employees upon hire. Among other subjects, the notice addresses workers' compensation, immigration-agency inspections, protections against unfair immigration-related practices, the right to organize or engage in concerted activity, and constitutional rights when interacting with law enforcement at the workplace. SB 294 also requires employers to give employees an opportunity to designate an emergency contact and, under specified circumstances, notify that person if the employee is arrested or detained. For employees, the law is significant because it is designed to make information about existing workplace rights more accessible rather than leaving workers to discover those rights only after a dispute develops. AB 406: Changes Affecting Crime Victim Leave Crime victim leave is another area where California's law changed in stages. Assembly Bill 2499, enacted in 2024, substantially expanded protections for employees who are victims of qualifying acts of violence and, in certain circumstances, employees whose family members are victims. The law first took effect January 1, 2025. Among other protections, it provides qualifying employees with protected time away from work for purposes such as obtaining medical or mental-health care, victim services, safety planning, and certain legal proceedings. In 2025, AB 406 was enacted as an urgency measure to correct and clarify aspects of AB 2499, including the transition of enforcement responsibilities between the Labor Commissioner's Office and the Civil Rights Department. Some crime-victim protections moved to the FEHA framework for violations occurring on or after January 1, 2026. It is worth noting that crime-victim protections are not limited to traditional workplace injuries or wage disputes. Depending on the circumstances, an employee dealing with domestic violence, sexual assault, stalking, or another qualifying act of violence may have rights to leave, accommodations, and protection from retaliation. AB 2155: A Change to California Arbitration Law Assembly Bill 2155 was signed by Governor Newsom on June 30, 2026, and becomes effective January 1, 2027. The measure amends California Code of Civil Procedure section 1281 to provide that an arbitration agreement is unenforceable under California's arbitration law to the extent that the agreement would be unenforceable under the Federal Arbitration Act. The practical significance is particularly relevant to certain employees whose work or claims fall within exclusions from the FAA. The new law also incorporates federal restrictions that can affect arbitration of sexual assault and sexual harassment disputes. Arbitration agreements can affect where and how an employment dispute is resolved. Employees should not assume that signing an arbitration agreement necessarily answers every question about whether a particular claim must be arbitrated. California's Minimum Wage Will Increase Again in 2027 The statewide minimum wage will increase from $16.90 to $17.40 per hour on January 1, 2027. This change is not the result of a bill passed during the 2026 legislative session; rather, California law provides for annual inflation-based adjustments to the statewide minimum wage. The increase also affects the salary threshold applicable to certain employees classified as exempt from overtime. Beginning January 1, 2027, the minimum salary for those exemptions will generally rise to $72,384 per year, although meeting the salary threshold alone does not establish that an employee is properly classified as exempt. There are also industry-specific and local minimum wages that may be higher than the statewide rate. Separately, Assembly Bill 2646 was sent to the Governor and would establish a $19.75 hourly minimum wage for specified agricultural employees and corresponding employees beginning January 1, 2027, with annual cost-of-living adjustments thereafter. SB 947: What Happens When AI Makes a Workplace Decision? One of the most closely watched employment measures of the session is Senate Bill 947, concerning automated decision systems. As of this writing, SB 947 has passed the Legislature and is awaiting the Governor's action. The measure was presented to the Governor on September 9. If enacted, SB 947 would restrict employers from relying solely on an automated decision system when disciplining or terminating a worker. Where an automated system plays a primary role, the bill would require human review and corroboration using relevant supporting information. It also contains restrictions concerning the use of automated systems to infer protected characteristics and to predict or retaliate against workers for exercising legal rights. If enacted, the measure would take effect July 1, 2027. This issue could become particularly relevant for employees as employers increasingly use software to screen applicants, monitor productivity, evaluate performance, flag employees for potential discipline, or make other employment-related decisions. AB 1883: Restrictions on AI-Powered Workplace Surveillance Assembly Bill 1883 is another technology-focused measure awaiting the Governor’s signature. The Legislature enrolled the bill on September 3 and presented it to the Governor on September 10. The measure focuses on workplace surveillance tools that use artificial intelligence to recognize or infer an employee's emotional state or collect "neural data," meaning information generated by measuring activity of the central or peripheral nervous system. The bill provides specified exceptions and authorizes enforcement by the Labor Commissioner or a public prosecutor. If enacted, the measure would generally take effect on January 1, 2027. This is an unusually forward-looking employment issue. Workplace monitoring has traditionally involved cameras, timekeeping systems, GPS tracking, or productivity software. AI creates the possibility of employers attempting to draw conclusions about an employee's emotions, behavior, or physiological responses from data collected at work. AB 1331: Surveillance in Workplace Bathrooms and Other Private Areas Assembly Bill 1331 addresses another aspect of workplace surveillance. The measure passed the Legislature and was presented to the Governor on September 14. The bill would generally prohibit employers from using workplace surveillance tools to monitor or surveil employees in workplace bathrooms, subject to specified exceptions. It also addresses employees' ability to leave certain surveillance devices behind when entering covered areas. If enacted, the law would generally take effect January 1, 2027. AB 1331 and AB 1883 are related but distinct. AB 1331 focuses on where workplace surveillance may occur, while AB 1883 focuses on particular AI-driven surveillance capabilities involving emotional-state recognition and neural data. AB 2495: Expanded Protection Against Immigration-Related Retaliation Assembly Bill 2495 is particularly relevant to employees who may be vulnerable to immigration-related retaliation. Existing California law already prohibits certain unfair immigration-related practices when used to retaliate against someone exercising rights protected by state labor and employment laws. AB 2495 would expand those protections to cover the exercise of rights under federal, state, and local laws and regulations applicable to employees. The bill also addresses conduct related to a person's actual or perceived immigration status that would reasonably tend to dissuade an employee from exercising a legal right, or induce an employee to refrain from exercising a right. The enrolled bill was presented to the Governor on September 3 and remains pending as of September 16. If enacted without a different operative date, the measure would generally take effect January 1, 2027. The measure could matter in disputes involving wage complaints, discrimination complaints, workplace safety rights, or other protected activity where immigration status or threats concerning immigration enforcement become part of the employer's response. SB 1149: Bereavement Leave for a "Designated Person" California already provides eligible employees with up to five days of bereavement leave following the death of specified family members. Senate Bill 1149 would expand the definition of family member for this purpose to include a "designated person" identified by the employee. An employer could limit an employee to one designated person in a 12-month period. The bill passed both houses and was presented to the Governor on August 24. It remains pending as of September 16. If enacted, the measure would generally become effective January 1, 2027. For employees, the practical importance is straightforward: the law would recognize that the person whose death causes an employee to grieve is not necessarily a person who fits within the traditional legal definition of immediate family. SB 951: Notice When AI or Automation Causes Job Loss Senate Bill 951 would expand California's WARN Act requirements in situations involving technological displacement. The measure would require specified additional information when a covered mass layoff, relocation, or termination results substantially from artificial intelligence or other automation. The proposal also creates reporting requirements concerning technological displacement. SB 951 has passed the Legislature and was presented to the Governor on September 9. It is therefore another measure to watch as the September 30 deadline approaches. For workers, the significance is that an AI-driven workforce reduction could carry different notice obligations than a conventional layoff. The measure reflects a broader question that is likely to become increasingly important: what rights should employees have when technology, rather than a traditional business restructuring, is the principal reason their jobs disappear? What Happens Next? The California Legislature's work for the 2025–2026 regular session is largely complete, but several employment bills are still on the Governor's desk. The Governor's deadline for acting on measures passed during the final portion of the session is September 30, 2026. Bills that become law without an urgency provision will generally take effect January 1, 2027, although some measures provide their own operative dates. That means the status of several measures discussed here could change before the end of September. Employees and employers should distinguish between a bill that has passed the Legislature and an enacted statute; an enrolled bill awaiting gubernatorial action is not yet law. For help with a California employment law issue affecting your rights in the Bay Area, contact San Francisco employment lawyer Richard Koss to discuss your situation and find out how we can help.

California lawmakers concluded the 2025–2026 legislative session on September 1 with a number of measures affecting workplace rights, discrimination and retaliation protections, pay equity, leave, arbitration, workplace surveillance, and the growing role of artificial intelligence in employment decisions.

Some of these measures are already law and have gone into effect. Others have passed the Legislature but are still awaiting action from the Governor. For California employees, several of the changes could be particularly important because they affect how workers can challenge pay discrimination, exercise workplace rights, respond to immigration-related retaliation, and understand how employers use technology in the workplace.

Here is a look at some of the most significant employment-related developments.

SB 642: Expanded Pay Equity and Equal Pay Protections

Senate Bill 642 was signed by Governor Gavin Newsom on October 8, 2025, and took effect January 1, 2026. The law makes several changes to California’s Equal Pay Act and pay-transparency requirements.

Among other changes, SB 642 revised California’s definition of a “pay scale” for job postings to mean a good-faith estimate of the salary or hourly wage range an employer reasonably expects to pay when hiring for the position. It also changed the Equal Pay Act’s language from comparing employees of the “opposite sex” to employees of “another sex.”

One of the more significant changes for employees is the expansion of the period in which an Equal Pay Act lawsuit may be brought. The statute of limitations was extended from two years to three years after the last date the cause of action occurs. The law also allows an employee who timely brings a claim to seek relief for the entire period during which the violation continued, subject to a six-year limit.

For employees who believe they have been paid less because of sex, these changes can affect both the information available to them and the amount of compensation potentially at issue.

SB 294: California’s Workplace Know Your Rights Act

Another law already in effect is Senate Bill 294, the Workplace Know Your Rights Act. Governor Newsom signed the measure on October 12, 2025, and it became effective January 1, 2026.

The law requires California employers to provide employees with a standalone written notice describing specified workplace rights. The notice must be provided to current employees annually and to new employees upon hire. Among other subjects, the notice addresses workers’ compensation, immigration-agency inspections, protections against unfair immigration-related practices, the right to organize or engage in concerted activity, and constitutional rights when interacting with law enforcement at the workplace.

SB 294 also requires employers to give employees an opportunity to designate an emergency contact and, under specified circumstances, notify that person if the employee is arrested or detained.

For employees, the law is significant because it is designed to make information about existing workplace rights more accessible rather than leaving workers to discover those rights only after a dispute develops.

AB 406: Changes Affecting Crime Victim Leave

Crime victim leave is another area where California’s law changed in stages.

Assembly Bill 2499, enacted in 2024, substantially expanded protections for employees who are victims of qualifying acts of violence and, in certain circumstances, employees whose family members are victims. The law first took effect January 1, 2025. Among other protections, it provides qualifying employees with protected time away from work for purposes such as obtaining medical or mental-health care, victim services, safety planning, and certain legal proceedings.

In 2025, AB 406 was enacted as an urgency measure to correct and clarify aspects of AB 2499, including the transition of enforcement responsibilities between the Labor Commissioner’s Office and the Civil Rights Department. Some crime-victim protections moved to the FEHA framework for violations occurring on or after January 1, 2026.

It is worth noting that crime-victim protections are not limited to traditional workplace injuries or wage disputes. Depending on the circumstances, an employee dealing with domestic violence, sexual assault, stalking, or another qualifying act of violence may have rights to leave, accommodations, and protection from retaliation.

AB 2155: A Change to California Arbitration Law

Assembly Bill 2155 was signed by Governor Newsom on June 30, 2026, and becomes effective January 1, 2027.

The measure amends California Code of Civil Procedure section 1281 to provide that an arbitration agreement is unenforceable under California’s arbitration law to the extent that the agreement would be unenforceable under the Federal Arbitration Act.

The practical significance is particularly relevant to certain employees whose work or claims fall within exclusions from the FAA. The new law also incorporates federal restrictions that can affect arbitration of sexual assault and sexual harassment disputes.

Arbitration agreements can affect where and how an employment dispute is resolved. Employees should not assume that signing an arbitration agreement necessarily answers every question about whether a particular claim must be arbitrated.

California’s Minimum Wage Will Increase Again in 2027

The statewide minimum wage will increase from $16.90 to $17.40 per hour on January 1, 2027. This change is not the result of a bill passed during the 2026 legislative session; rather, California law provides for annual inflation-based adjustments to the statewide minimum wage.

The increase also affects the salary threshold applicable to certain employees classified as exempt from overtime. Beginning January 1, 2027, the minimum salary for those exemptions will generally rise to $72,384 per year, although meeting the salary threshold alone does not establish that an employee is properly classified as exempt.

There are also industry-specific and local minimum wages that may be higher than the statewide rate.

Separately, Assembly Bill 2646 was sent to the Governor and would establish a $19.75 hourly minimum wage for specified agricultural employees and corresponding employees beginning January 1, 2027, with annual cost-of-living adjustments thereafter.

SB 947: What Happens When AI Makes a Workplace Decision?

One of the most closely watched employment measures of the session is Senate Bill 947, concerning automated decision systems. As of this writing, SB 947 has passed the Legislature and is awaiting the Governor’s action. The measure was presented to the Governor on September 9.

If enacted, SB 947 would restrict employers from relying solely on an automated decision system when disciplining or terminating a worker. Where an automated system plays a primary role, the bill would require human review and corroboration using relevant supporting information. It also contains restrictions concerning the use of automated systems to infer protected characteristics and to predict or retaliate against workers for exercising legal rights. If enacted, the measure would take effect July 1, 2027.

This issue could become particularly relevant for employees as employers increasingly use software to screen applicants, monitor productivity, evaluate performance, flag employees for potential discipline, or make other employment-related decisions.

AB 1883: Restrictions on AI-Powered Workplace Surveillance

Assembly Bill 1883 is another technology-focused measure awaiting the Governor’s signature. The Legislature enrolled the bill on September 3 and presented it to the Governor on September 10. The measure focuses on workplace surveillance tools that use artificial intelligence to recognize or infer an employee’s emotional state or collect “neural data,” meaning information generated by measuring activity of the central or peripheral nervous system. The bill provides specified exceptions and authorizes enforcement by the Labor Commissioner or a public prosecutor. If enacted, the measure would generally take effect on January 1, 2027.

This is an unusually forward-looking employment issue. Workplace monitoring has traditionally involved cameras, timekeeping systems, GPS tracking, or productivity software. AI creates the possibility of employers attempting to draw conclusions about an employee’s emotions, behavior, or physiological responses from data collected at work.

AB 1331: Surveillance in Workplace Bathrooms and Other Private Areas

Assembly Bill 1331 addresses another aspect of workplace surveillance. The measure passed the Legislature and was presented to the Governor on September 14. The bill would generally prohibit employers from using workplace surveillance tools to monitor or surveil employees in workplace bathrooms, subject to specified exceptions. It also addresses employees’ ability to leave certain surveillance devices behind when entering covered areas. If enacted, the law would generally take effect January 1, 2027.

AB 1331 and AB 1883 are related but distinct. AB 1331 focuses on where workplace surveillance may occur, while AB 1883 focuses on particular AI-driven surveillance capabilities involving emotional-state recognition and neural data.

AB 2495: Expanded Protection Against Immigration-Related Retaliation

Assembly Bill 2495 is particularly relevant to employees who may be vulnerable to immigration-related retaliation.

Existing California law already prohibits certain unfair immigration-related practices when used to retaliate against someone exercising rights protected by state labor and employment laws. AB 2495 would expand those protections to cover the exercise of rights under federal, state, and local laws and regulations applicable to employees.

The bill also addresses conduct related to a person’s actual or perceived immigration status that would reasonably tend to dissuade an employee from exercising a legal right, or induce an employee to refrain from exercising a right.

The enrolled bill was presented to the Governor on September 3 and remains pending as of September 16. If enacted without a different operative date, the measure would generally take effect January 1, 2027.

The measure could matter in disputes involving wage complaints, discrimination complaints, workplace safety rights, or other protected activity where immigration status or threats concerning immigration enforcement become part of the employer’s response.

SB 1149: Bereavement Leave for a “Designated Person”

California already provides eligible employees with up to five days of bereavement leave following the death of specified family members. Senate Bill 1149 would expand the definition of family member for this purpose to include a “designated person” identified by the employee. An employer could limit an employee to one designated person in a 12-month period.

The bill passed both houses and was presented to the Governor on August 24. It remains pending as of September 16. If enacted, the measure would generally become effective January 1, 2027.

For employees, the practical importance is straightforward: the law would recognize that the person whose death causes an employee to grieve is not necessarily a person who fits within the traditional legal definition of immediate family.

SB 951: Notice When AI or Automation Causes Job Loss

Senate Bill 951 would expand California’s WARN Act requirements in situations involving technological displacement. The measure would require specified additional information when a covered mass layoff, relocation, or termination results substantially from artificial intelligence or other automation. The proposal also creates reporting requirements concerning technological displacement.

SB 951 has passed the Legislature and was presented to the Governor on September 9. It is therefore another measure to watch as the September 30 deadline approaches.

For workers, the significance is that an AI-driven workforce reduction could carry different notice obligations than a conventional layoff. The measure reflects a broader question that is likely to become increasingly important: what rights should employees have when technology, rather than a traditional business restructuring, is the principal reason their jobs disappear?

What Happens Next?

The California Legislature’s work for the 2025–2026 regular session is largely complete, but several employment bills are still on the Governor’s desk. The Governor’s deadline for acting on measures passed during the final portion of the session is September 30, 2026. Bills that become law without an urgency provision will generally take effect January 1, 2027, although some measures provide their own operative dates.

That means the status of several measures discussed here could change before the end of September. Employees and employers should distinguish between a bill that has passed the Legislature and an enacted statute; an enrolled bill awaiting gubernatorial action is not yet law.

For help with a California employment law issue affecting your rights in the Bay Area, contact San Francisco employment lawyer Richard Koss to discuss your situation and find out how we can help.

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By Bay Area Employment Lawyers | Posted on September 25, 2026