Labor & Employment Law Daily Wrap Up, EXPERT INSIGHTS—Last call! 13 bills California employers should watch as Governor Newsom’s final term comes to an end, (Sep 2, 2026)
Law Firms Mentioned:Fisher Phillips
Organizations Mentioned:Fisher & Phillips
By Benjamin M. Ebbink of Fisher Phillips, LLC
Artificial intelligence has dominated legislative attention in California (and beyond) in recent years – especially regarding its use in the employment context.
The California legislature just adjourned and sent a flurry of workplace-related bills related to Governor Newsom to either sign or veto by September 30 – his last go-around before his final term concludes in January. Unless otherwise noted, any measures signed into law will take effect on January 1, 2027. What key bills should employers be watching? This Insight will review the most significant workplace-related proposals, covering topics ranging from AI to surveillance to wage and hour.
Table of Contents
Artificial Intelligence Remains in the Spotlight
No Robo Bosses Act (SB 947)
AI Layoff Notices (SB 951)
More Attempts to Restrict Workplace Surveillance
No Surveillance in Bathrooms (AB 1331)
Privacy Protections for Employees’ Emotional States and Neural Data (AB 1883)
Increased Penalties for Pay Data Reporting Failures (SB 1237)
Expanded Employment Discrimination and Leave Requirements
Bereavement Leave (SB 1149).
Anti-Hate Speech Training (AB 1803).
Menopause-Related Protections (AB 1940).
Artificial Intelligence Remains in the Spotlight
Artificial intelligence has dominated legislative attention in California (and beyond) in recent years – especially regarding its use in the employment context. Bills currently on the Governor’s desk include:
No Robo Bosses Act (SB 947). Sound familiar? This bill is a revised version of legislation vetoed by Governor Newsom last year. While changes were made to address some of Newsom’s concerns, the core concept remains: employers would be prohibited from relying solely on an “automated decision system” (ADS) when making a disciplinary or termination decision. Plus, if an employer primarily relied on ADS output to make a disciplinary or termination decision, it would be required to direct a human reviewer to corroborate the decision, as well as provide workers with a written “post-use” notice. We covered SB 947 when it was first introduced in February – but note that the bill has since been amended several times. If enacted, the No Robo Bosses Act would take effect on July 1, 2027.
AI Layoff Notices (SB 951). This bill reflects growing concerns about AI-related job loss and would amend California’s WARN Act to require employers to provide specified information in WARN notices when a layoff, relocation, or termination is caused “in whole or substantial part” by an AI system or when other automated technology replaces or automates employment positions. In addition, the bill requires the Employment Development Department to submit a report by 2028 on AI’s effects on business hiring practices, including recommendations for a notice requirement for employers engaged in a “technological cessation in hiring” (ending hiring or contracting for a particular position rather than laying workers off). We covered an earlier version of SB 951 (although the final version of the bill was significantly amended).
More Attempts to Restrict Workplace Surveillance
Another series of legislative proposals seeks to limit employers’ use of surveillance in the workplace in certain contexts:
No Surveillance in Bathrooms (AB 1331). Employers would be prohibited from using a “workplace surveillance tool” – which includes any system that collects employee data (including video or audio surveillance, time-tracking, geolocation or other means) – to monitor or surveil employees in a bathroom. In addition, employees would have the right to leave behind a workplace surveillance tool when entering a bathroom. While these limitations seem reasonable, the broad scope of the bill will create significant challenges regarding employer use of common tools related to entry, identification, and safety (though narrow exceptions would be available).
Privacy Protections for Employees’ Emotional States and Neural Data (AB 1883). AB 1883 uses the same broad definition of “workplace surveillance tool” as AB 1331 but focuses on two prohibited uses. Specifically, the bill prohibits an employer from using a workplace surveillance tool that uses AI to: (1) recognize or make inferences or predictions about an employee’s emotional state; or (2) collect “neural data” (generated by measuring an employee’s central or peripheral nervous system).
Effort to Curb Digital Wiretapping Lawsuits (SB 690)
If you’ve followed our Insights lately, you are likely familiar with the flood of litigation in recent years against businesses for using standard website tools like analytics and cybersecurity software. Aggressive plaintiffs and their attorneys have filed over 4,000 lawsuits statewide alleging that these common practices violate the California Invasion of Privacy Act (CIPA). Courts are grappling with how to handle this trend, which you can track on FP’s Digital Wiretapping Litigation Map.
California lawmakers passed SB 690 in an attempt to rein in this abusive litigation – though the bill would only solve part of the problem. The bill removes the private right of action only for claims under CIPA’s “pen register” provision (which has been used to bring claims related to metadata-tracking tools), and this would applyretroactively to any pending lawsuits filed on or after January 1, 2025. However, the bill does not address the wiretapping provision of CIPA (Section 631), which is the source of most current litigation abuse.
FP Privacy and Cyber Co-Chair Usama Kahf testified on SB 690 before the California Assembly Privacy Committee on July 1.
Increased Penalties for Pay Data Reporting Failures (SB 1237)
Employers currently can face a civil penalty of up to $200 per employee for repeated failures to file a required annual pay data report with California’s Civil Rights Department (CRD). SB 1237 would significantly increase the maximum penalty for repeated failures to $1,000 per employee. Penalties for failures to file are now mandatory upon CRD’s request, thanks to a law enacted last year.
More Time to Prepare for Stay-or-Pay Ban (AB 1697)
Last year, Governor Newsom signed AB 692 to prohibit many “stay-or-pay” contracts entered into on or after January 1, 2026, as part of a growing trend of states to address employee mobility. However, this year the same author introduced a follow-up measure (AB 1697) to delay implementation of the law until January 1, 2027, to provide employers with an additional year to restructure such contracts and to provide a sufficient transition period to accommodate employers operating under collective bargaining agreements.
AB 1697 also establishes new exemptions (in addition to the existing ones enacted with SB 692) related to:
Contracts related to recruitment and retention programs funder by a federal, state or local grant;
Repayment obligations arising from a voluntary separation of employment related to advance PTO payments in excess of a workers’ paid time off; and
Specified affiliation contracts involving securities broker-dealers, insurance producers, or investment advisors.
If signed into law, AB 1697 would take effect immediately as an urgency measure.
Major Wage Hike in Agricultural Industry (AB 2646)
In recent years, California has adopted industry-specific minimum wages that exceed the general statewide minimum wage, including for fast food workers and certain healthcare workers. The agriculture industry would be next if AB 2646 is ultimately enacted, as it would impose a statewide minimum wage of $19.75 per hour for certain ag workers – essentially, H-2A employees and their local-worker counterparts. Learn more here.
AB 2646 is largely a response to the Trump administration’s changes to how the H-2A program’s minimum wage (the Adverse Effect Wage Rate) is calculated (read the latest here). If signed into law, there will likely be legal challenges (including based on federal preemption) to California’s efforts to impact H-2A worker wages.
Expanded Employment Discrimination and Leave Requirements
Every year, a number of bills seek to expand California prohibitions against employment discrimination and employee leave rights. This year is no exception:
Bereavement Leave (SB 1149). This bill would expand California’s existing bereavement leave law to allow employees to take up to five days of bereavement leave upon the death of a “designated person” (any person related to the employee by blood or whose association with the employee is the equivalent of a family relationship). This is consistent with similar recent changes made to California’s paid sick leave law, the California Family Rights Act, and the Paid Family Leave program.
Anti-Hate Speech Training (AB 1803). AB 1803 would expand California’s sexual harassment training prevention requirement, effective January 1, 2028, to also include “anti-hate speech training” as a component. Such training would need to provide supervisors and employees with practical guidance on recognizing, reporting and confronting workplace speech that “vilifies, humiliates, or incites hatred against people” based on protected characteristics. Trainings that include information about the prohibition against unlawful harassment and prevention of abusive conduct based on prohibited characteristics would satisfy this requirement.
Menopause-Related Protections (AB 1940). This measure amends the California Fair Employment and Housing Act to specify that “sex” for purposes of unlawful employment discrimination includes perimenopause, menopause, or postmenopause, or other related medical conditions. Employer groups sought amendments to this bill to instead require employers to provide reasonable accommodations to menopause and related conditions (rather than add them as protected category under “sex”), but these efforts were unsuccessful.
Revamped Cal/OSHA Investigations (AB 2321)
Worker advocates introduced this bill in response to alleged concerns regarding how Cal/OSHA’s Bureau of Investigations (BOI) was handling cases and referring them to county district attorneys for criminal investigation and prosecution. If enacted, AB 2321 would:
require BOI to investigate any incident in which there is a serious injury, illness or exposure for which Cal/OSHA issues a citation for a willful violation (under current law, BOI investigates cases only when there is a serious injury to five or more employees or a death);
require Cal/OSHA to “immediately” make certain referrals to county prosecutors; and
make it a misdemeanor for any person who (1) willfully resists, prevents, impedes, or interferes with Cal/OSHA in the performance of their duties, or (2) in any manner willfully violates an order of the court relating to those duties.
This last provision raises significant concerns about an employer’s ability to lawfully object to a Cal/OSHA inspection (such as objecting when an inspector refusing to provide a reason for the inspection or when applicable warrant requirements are not satisfied). If the bill is signed into law, it will likely be challenged as unconstitutional under the Fourth Amendment.
High-Profile Fight Over Anti-Trust Law Changes (AB 1776)
The business community’s largest legislative fight this year was not an employment-related measure but centered on proposed changes to California’s anti-trust law (the Cartwright Act). Most notably, AB 1776 would:
expand the law to regulate “single firm” conduct (unilateral actions by one business that monopolize or restrain trade, rather than the conduct of two or more entities); and
depart from federal law by requiring that a plaintiff merely demonstrate “substantial market power” rather than actual “monopoly power.”
If enacted, these changes would not apply to businesses that are independently owned and operated, have 100 or fewer employees, and average annual gross receipts of $10 million or less. And while the bill as passed did not include a private right action – a major win for the business community – the legislation remains deeply concerning for businesses and all eyes will be on Governor Newsom to see if he signs or vetoes it.
Conclusion
We will continue to monitor each of these bills to see if they are approved or vetoed by Governor Newsom, and we’ll provide further analysis and compliance assistance for any bills that are enacted. Make sure you are subscribed to Fisher Phillips’ Insight System to get the most up-to-date information. In the meantime, for more information about these pieces of legislation, feel free to contact your Fisher Phillips attorney, the author of this Insight, or any attorney in our California offices.
Benjamin M. Ebbink
Fisher Phillips, LLC
URL: https://www.fisherphillips.com/
Attorneys: (Fisher Phillips).
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