• Most of California’s new requirements take effect 01.01.27, but the automated decision law takes effect 07.01.28 and certain training, court-procedure and Paid Family Leave laws have later implementation dates.
• Technology is a central focus, and employers should inventory their automated decision systems and surveillance tools, identify vendors that access employee data and document when and how people review technology-generated recommendations.
• Employers should also review leave policies, arbitration agreements, repayment and bonus arrangements, Cal-WARN procedures, harassment-prevention training, pay data reporting controls and protocols for immigration-related complaints and workplace threats.

California’s 2026 legislative session produced numerous significant changes affecting employers’ use of artificial intelligence (AI), employee monitoring, workforce reductions, leave administration, employment agreements, and other workplace practices.

Although most of the measures take effect in 2027, several provisions’ later implementation dates give employers more time to update policies, procedures, training, and technology controls.

“Stay-or-Pay” Related Agreements

Assembly Bill (AB) 1697 revises California’s limits on “stay-or-pay” provisions. The law generally prohibits employment-related terms that require a worker to repay a debt or pay a penalty, fee, or cost when the worker’s relationship with a particular employer ends. The prohibition applies to contracts entered...

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