California employers face many legislative and regulatory changes in 2027. New requirements may affect workplace safety, employment practices, labor costs, artificial intelligence, employee monitoring, insurance programs, and workers compensation management.
This edition of The Advisor summarizes key California employment law changes and emerging compliance issues for employers to monitor.
For a complete list of legislation signed by Governor Gavin Newsom on September 30, 2026, review the official update from the Governor’s Office:
Governor Newsom Issues Legislative Update – September 30, 2026
Please note: This overview provides general information, not legal advice. Employers should consult qualified legal counsel or an appropriate compliance resource to understand how these developments may apply to their organizations.
Key Takeaways for California Employers
California employers should begin preparing for changes involving:
- Cal/OSHA investigations and enforcement
- Workplace violence prevention programs
- Workplace first aid requirements
- Discrimination and harassment prevention policies
- Bereavement leave
- Pay data reporting
- Training repayment and stay-or-pay agreements
- Artificial intelligence in employment decisions
- Electronic monitoring and employee privacy
- Workers compensation policy audits
- Property insurance and the California FAIR Plan
Many changes take effect January 1, 2027. Others have different effective dates or depend on pending rulemaking.
Cal/OSHA and Workplace Safety Changes for 2027
AB 2321: Expanded Cal/OSHA Enforcement
AB 2321 expands Cal/OSHA’s enforcement authority in matters involving serious workplace injuries, illnesses, and exposures. It also increases coordination with prosecutors and makes interference with certain Cal/OSHA investigations a misdemeanor offense.
Why it matters: Serious workplace incidents may draw greater regulatory scrutiny, create possible criminal consequences, and increase liability.
Effective date: January 1, 2027
Employer considerations
California employers should review:
- Serious injury and illness response procedures
- Internal investigation protocols
- Cal/OSHA reporting responsibilities
- Document-retention practices
- Management training for regulatory inspections
AB 1961: Workplace Violence Restraining Orders
AB 1961 allows employers to seek workplace violence restraining orders that protect an entire workplace or group of employees without requiring the employer to identify one specific employee.
Employers should monitor the rulemaking process and avoid making assumptions about the final requirements before Cal/OSHA adopts the standard.
Effective date: January 1, 2027
Employer considerations
Employers should consider how restraining orders fit within their broader workplace violence prevention, emergency response, security, and employee communication procedures.
Pending Cal/OSHA Standards
Workplace Violence Prevention Standard
Cal/OSHA continues to develop a workplace violence prevention standard for non-health care employers. State law directs the Standards Board to complete the rulemaking process before January 1, 2027.
Once the final standard is adopted, employers should compare it with their existing workplace violence prevention programs. The final rule may include obligations beyond the current requirements associated with SB 553.
Effective date: To be determined
What employers should do now
- Review the current workplace violence prevention plan.
- Confirm that responsible employees understand their roles.
- Evaluate incident-reporting and recordkeeping processes.
- Employers should compare the final standard with their existing workplace violence prevention programs after Cal/OSHA adopts it. The final rule may include requirements beyond those associated with SB 553.
- Be prepared to revise the program, training, and related documentation.
First Aid Standards for General Industry and Construction
Cal/OSHA is also considering updates to first aid requirements under the General Industry and Construction Safety Orders.
The proposed changes could affect:
- Required first aid supplies
- Employee training
- Worksite first aid capabilities
- Cal/OSHA is considering updates to first aid requirements under the General Industry and Construction Safety Orders.
The proposal appears to be in the later stages of rulemaking and is expected to be finalized within the next several months.
Effective date: To be determined
Employers should monitor the rulemaking process rather than make assumptions about final requirements before the standard is adopted.
California HR and Employment Law Changes
AB 2563: Clarification of Sex Discrimination Protections
Employers should monitor the rulemaking process and prepare to review their programs after Cal/OSHA adopts the final requirements.
Why it matters: Employers should review their policies, training, accommodation procedures, and employment practices for alignment with the clarified standards.
Effective date: January 1, 2027
Employer considerations
Review the following areas with qualified employment counsel:
- Equal employment opportunity policies
- Anti-discrimination training
- Pregnancy-related accommodations
- Hiring and promotion practices
- Complaint-reporting and investigation procedures
AB 1803: Anti-Hate Speech Education in Harassment Training
AB 1803 requires California harassment prevention training to include anti-hate speech education and guidance on recognizing, reporting, and confronting workplace hate speech.
Why it matters: Employers may need to update training materials, facilitator guidance, reporting procedures, and employee communications.
Effective date: January 1, 2027
SB 1149: Expanded Bereavement Leave Protections
SB 1149 expands California bereavement leave protections to include the death of a designated person, including certain individuals whose relationship with the employee is equivalent to family.
Why it matters: Employers may need to update leave policies, employee handbooks, manager guidance, and leave-administration procedures.
Effective date: January 1, 2027
SB 1237: Increased Pay Data Reporting Penalties
SB 1237 significantly increases penalties for repeat failures to submit required California pay data reports. Maximum penalties for subsequent violations will rise from $200 to $1,000 per employee.
Why it matters: A repeat reporting failure could create substantial financial exposure, particularly for organizations with larger workforces.
SB 1237 increases penalties for repeat failures to submit required California pay data reports. Maximum penalties for subsequent violations will rise from $200 to $1,000 per employee.
Why it matters: A repeat reporting failure could create considerable financial exposure, especially for organizations with larger workforces.
Employers should review:
- Responsibility for preparing the report
- Data-collection procedures
- Internal review and approval timelines
- Reporting calendars
- Documentation of timely submissions
AB 2017: Additional California State Holidays
AB 2017 adds Eid al-Fitr and Eid al-Adha to California’s list of state holidays. State employees may use personal holiday credits for these observances, while public schools and community colleges may close based on local decisions.
Effective date: January 1, 2027
Employers should distinguish between requirements applying to private employers and provisions specifically affecting public employees or educational institutions.
AB 2646: Minimum Wage for Covered Agricultural Workers
AB 2646 establishes a minimum wage of $19.75 per hour for covered agricultural workers, with future annual adjustments.
Why it matters: Agricultural employers may need to reevaluate labor budgets, pricing, staffing strategies, payroll procedures, and workforce planning.
Effective date: January 1, 2027
AB 1697: Stay-or-Pay and Training Repayment Agreements
AB 1697 delays the implementation of certain restrictions involving stay-or-pay and training repayment agreements while creating additional exceptions.
The change gives employers more time to review:
- Training repayment provisions
- Sign-on and retention incentives
- Reimbursement agreements
- Other covered contractual arrangements
Employers should ask qualified California employment counsel to review existing and proposed agreements.
Employers should have existing and proposed agreements reviewed by qualified California employment counsel.
California Artificial Intelligence and Workplace Monitoring Laws
The use of artificial intelligence in hiring, performance management, attendance tracking, discipline, and workforce planning continues to create new compliance responsibilities for California employers.
SB 947: “No Robo Bosses Act”
SB 947 prohibits employers from relying primarily on artificial intelligence to make disciplinary or termination decisions without independent human review.
Employers must also provide notice when AI contributes to an adverse employment action.
Who should pay attention: Employers using AI-supported performance management, productivity monitoring, attendance tracking, disciplinary review systems, or automated human resources tools.
Effective date: July 1, 2027
Employer considerations
Employers should inventory AI-enabled employment tools and determine:
- Which systems influence disciplinary or termination decisions
- Where meaningful human review occurs
- Whether decision-making responsibilities are clearly assigned
- How required notices will be provided and documented
- Whether vendors can explain how their systems contribute to employment decisions
SB 951: AI-Related Layoff Disclosures
SB 951 requires additional disclosures when AI or automation contributes to layoffs covered by California WARN requirements.
Who should pay attention: Employers implementing automation, workforce restructuring, or technology-driven efficiency initiatives.
Effective date: January 1, 2027
Employers contemplating a workforce reduction should evaluate the role of automation early in the planning process and obtain appropriate legal guidance regarding WARN obligations.
AB 1883: AI Emotion Recognition and Neural Data
AB 1883 prohibits employers from using AI tools to recognize, infer, or predict an employee’s emotional state. It also prohibits the collection of neural data generated by an employee’s nervous system.
Who should pay attention: Employers using advanced monitoring systems, behavioral analytics, wearable technology, wellness platforms, or emerging AI surveillance tools.
Effective date: January 1, 2027
AB 1331: Workplace Surveillance and Employee Privacy
AB 1331 requires employers to allow employees to discontinue electronic monitoring while using workplace restrooms.
The law applies broadly to technologies such as:
- GPS systems
- Wearable devices
- Badge systems
- Time-tracking tools
- Employee monitoring platforms
Who should pay attention: Employers using GPS tracking, wearable safety technology, badge access systems, electronic timekeeping, or other employee surveillance tools.
Employers planning a workforce reduction should evaluate the role of automation early and seek legal guidance about applicable WARN obligations.
Employer considerations
Employers should inventory their monitoring technologies, identify where monitoring continues during restroom use, and coordinate any required technical or policy changes with qualified counsel and technology vendors.
California Insurance and Property Updates
AB 1680: California FAIR Plan Reform
AB 1680 improves California FAIR Plan accountability, expands opportunities for higher policyholder limits, and establishes requirements intended to support more timely claims handling.
Why it matters: Employers insured through the FAIR Plan may benefit from greater accountability, expanded coverage options, and enhanced claims-handling standards.
Effective date: January 1, 2027
AB 2038: Property Insurance Cancellations and Nonrenewals
AB 2038 updates requirements applying to residential property insurance cancellations and nonrenewals.
Effective date: January 1, 2027
Businesses and property owners should work with their insurance advisors to determine whether the changes affect properties associated with their operations.
AB 2061: California FAIR Plan Data
AB 2061 expands reporting and transparency requirements for the California FAIR Plan.
Employers should inventory their monitoring technologies, identify where monitoring continues during restroom use, and coordinate required technical or policy changes with qualified counsel and technology vendors.
AB 2724: Insurance in Distressed Areas
AB 2724 addresses insurance challenges in regions where coverage is difficult to obtain.
Effective date: January 1, 2027
Insurance planning considerations
Organizations operating in wildfire-prone or difficult-to-insure regions should review:
- Property valuations
- Coverage limits
- Deductibles
- Organizations in wildfire-prone or difficult-to-insure regions should review:
- Risk-control documentation
- Alternative insurance-market options
- Renewal timelines
California Workers Compensation Update
Court Upholds Policy Cancellation Following Failure to Cooperate with Audit
In Employers Preferred Insurance Co. v. WCAB (2026), the California Court of Appeal upheld the cancellation of a workers compensation policy after the employer did not respond to multiple payroll audit requests over several months.
Why it matters: Employers should respond promptly to insurance company audit requests and maintain records required under their policy’s audit provisions. Failure to cooperate may jeopardize coverage and create an uninsured exposure.
Workers compensation audit considerations
Employers should establish a reliable process for:
- Routing carrier communications to the appropriate person
- Responding to payroll audit requests
- Maintaining payroll and classification records
- Tracking submission deadlines
- Documenting communications with carriers and brokers
- Escalating unresolved audit questions
Workers’ Compensation Trends to Watch in 2027
California employers should continue monitoring:
- Discussions involving potential permanent disability reform
- SIBTF reform following recent legislative activity
- Implementation of Utilization Review regulations
- Medical Fee Schedule updates issued by the Division of Workers’ Compensation
- Upward cost pressure associated with wage growth, medical inflation, and administrative expenses
These topics can support educational resources about workers compensation audits, rising costs, OSHA inspections, claims management, and employer safety programs. They also align with content opportunities identified in Leavitt_Pacific_Content_Topics.xlsx.
2027 California Employer Compliance Checklist
Employers should consider the following actions:
- Review serious injury response and investigation procedures.
- Prepare to update workplace violence prevention programs after Cal/OSHA adopts its final standard.
- Monitor proposed changes to Cal/OSHA first aid requirements.
- Review sign-on bonuses, retention incentives, and training repayment agreements.
- Inventory AI-enabled HR, monitoring, productivity, attendance, and disciplinary systems.
- Confirm that independent human review is part of covered employment decisions.
- Review discrimination, harassment, bereavement leave, and accommodation policies.
- Update required employee and supervisor training.
- Confirm that pay data reporting procedures are compliant and timely.
- Evaluate electronic monitoring and workplace privacy practices.
- Respond promptly to carrier payroll audit requests.
- Monitor workers compensation reform proposals.
- Reassess property insurance strategies in wildfire-prone or difficult-to-insure regions.
- Coordinate legal, HR, safety, technology, risk management, and insurance responsibilities.
Looking Ahead
California employers continue to operate in a changing regulatory environment involving workplace safety, employment practices, artificial intelligence, employee privacy, workers compensation, and property insurance.
Employers should continue monitoring expanded Cal/OSHA enforcement, pending safety standards, new AI requirements, and possible workers compensation reforms throughout 2027.
Employers should review their policies, training programs, workplace technology, insurance programs, and compliance procedures. A coordinated review involving human resources, safety, legal, information technology, risk management, and insurance representatives can help identify gaps before new requirements take effect.
Need Help Evaluating Your 2027 Risk Strategy?
New employment requirements can affect more than an employee handbook. They may also change an organization’s safety obligations, employment practices liability, workers compensation exposure, technology risks, and insurance strategy.
Our team can help California employers evaluate:
- Workplace safety and risk-control programs
- Workers compensation strategies
- Employment practices liability exposures
- AI and employee monitoring risks
- Property insurance challenges
- Broader commercial insurance needs
Contact our team to discuss your organization’s risk and insurance priorities.
Frequently Asked Questions
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What California employment law changes take effect in 2027?
The changes summarized in this guide address Cal/OSHA enforcement, workplace violence, discrimination, harassment training, bereavement leave, pay data reporting, agricultural wages, employment agreements, AI-supported decisions, employee monitoring, property insurance, and workers compensation management.
Effective dates vary. Employers should verify the final statutory language and applicable implementation guidance.
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Can California employers use AI to make disciplinary decisions?
Under the legislation summarized above, employers may not rely primarily on AI for disciplinary or termination decisions without independent human review beginning July 1, 2027. Notice is also required when AI contributes to an adverse employment action.
Employers should seek legal guidance about how the rule applies to specific technologies and employment processes.
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Are California workplace violence prevention requirements changing?
Cal/OSHA continues to develop a workplace violence prevention standard for non-health care employers. The final standard may contain requirements beyond existing SB 553 obligations.
Employers should continue following current requirements while monitoring the final rulemaking.
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What should employers do when they receive a workers compensation audit request?
Employers should respond promptly, maintain complete payroll and classification records, document communications, and follow the audit provisions in their insurance policies. Employers can direct audit questions to their insurance advisor, insurance company, legal counsel, or another qualified resource.
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Do the new California laws affect employee monitoring?
The legislation summarized above addresses electronic monitoring during restroom use and includes technologies such as GPS systems, wearables, badge systems, time-tracking tools, and employee monitoring platforms.
Employers should review both their monitoring policies and the technical configuration of affected systems.