On September 30, 2026, Governor Gavin Newsom signed a group of measures that change how California employers use artificial intelligence, handle immigration-related issues, structure repayment agreements, enforce arbitration agreements, and report pay data. He also vetoed several closely watched proposals, including a bill that would have added menopause and other similar issues as disabilities to the Fair Employment and Housing Act (FEHA).
Most of the new laws take effect January 1, 2027. A few work on different timelines as detailed below. Below, we explain what changed, when each law takes effect, and efforts for employers to undertake now.
Operative July 1, 2027. Employers may not rely solely on an automated decision system (ADS) to discipline or terminate employees. ADS is broadly defined and covers tools built on machine learning, statistical modeling or data analytics, not just products marketed as AI. When ADS primarily supports a discipline or termination decision, a human must corroborate its output. The employer must give the employee a written notice that ADS was used. The law also bars using ADS to infer an employee’s protected status under Section 12940 of the Government Code or to predict and take adverse action against a worker for exercising their legal rights. Employees may request a description of the data the system relied on. The Labor...
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