View the complete 2027 California law updates hub.
California’s 2027 employment-law changes are now settled. Governor Newsom acted on the remaining bills of the 2026 legislative session by the September 30, 2026 deadline, signing nearly every major employment bill and vetoing one: AB 1940, which would have added menopause to FEHA’s definition of “sex.” Unless a law says otherwise, the new rules take effect January 1, 2027.
Updated October 21, 2026 with the Governor’s final actions. When this page was first published on September 17, 2026, many of these bills were still awaiting his signature or veto.
This roundup is written for workers. It covers the 2027 wage and overtime numbers, new limits on AI-driven discipline and workplace surveillance, expanded bereavement leave, sex-discrimination and immigration-retaliation changes, stay-or-pay contracts, and other new laws. For last year’s landscape, see our 2026 California employment law updates and 2024 roundup.
Confirmed: Statewide Minimum Wage Rises to $17.40
Effective January 1, 2027, California’s statewide minimum wage increases to $17.40 per hour, up from $16.90 in 2026. The Department of Finance certified the inflation adjustment on July 31, 2026; the Department of Industrial Relations announced the rate in August.
Key worker points:
- Piece-rate and most other non-exempt workers must still receive at least the applicable minimum wage for all hours worked.
- Many cities and counties already require a higher local rate. You are entitled to the higher of the state or local minimum wage where you work.
- Fast-food and certain health-care workers remain subject to separate industry minimums that can exceed the statewide rate.
- Paystubs must list the wage rate. Shorting the new rate can support claims for unpaid wages, liquidated damages, and penalties.
If your employer keeps paying 2026 rates after January 1, document hours and paystubs and get advice promptly. Underpayment is often paired with overtime, meal-break, and rest-break issues. See our overview of overtime violations.
Confirmed: Exempt Salary Threshold Rises to $72,384
The white-collar overtime exemptions (executive, administrative, and professional) require a salary of at least twice the state minimum wage for full-time work. DIR’s formula for 2027 is:
$17.40 × 2 × 40 hours × 52 weeks = $72,384 per year (about $1,392 per week).
That is up from $70,304 in 2026. Meeting the dollar threshold is only one part of the test. The employee must also perform exempt duties. A “manager” title and a salary just over $72,384 do not make someone exempt if they spend most of their time on non-exempt work.
If you are classified as salaried-exempt but your pay will fall below $72,384 on January 1, 2027—or your job duties never matched the exemption—you may be owed overtime, missed-break premiums, and related penalties. Local minimum wages do not raise this statewide salary test.
Signed: Stronger Misclassification and Retaliation Tools (SB 1444, SB 1316)
Two enforcement bills were signed on August 27, 2026 and take effect January 1, 2027:
- SB 1444 lets an individual worker recover the civil penalties for willful independent-contractor misclassification under Labor Code section 226.8—not only the Labor Commissioner or a public prosecutor. If you were labeled a 1099 contractor while treated like an employee, this adds a direct penalty path on top of unpaid wages and expense reimbursement. See employee misclassification lawsuits.
- SB 1316 bars an employer from using payroll or time records at a Labor Commissioner retaliation or discrimination hearing if it failed to produce them when asked, and lets the Labor Commissioner renew wage-judgment liens on an employer’s real property for additional 10-year periods.
Signed: “No Robo Bosses” and Workplace AI (SB 947, SB 951, AB 1883, AB 1331)
SB 947, the “No Robo Bosses Act,” was signed on September 30, 2026. Beginning July 1, 2027, an employer may not rely solely on an automated decision system to discipline or fire a worker; a human must make the decision with independent corroborating information. When an employer primarily relies on such a system for discipline or termination, a human must review its output and the worker must receive written notice afterward. The law also bars using these systems to infer protected characteristics or to retaliate. It is a narrower successor to SB 7, which the Governor vetoed in 2025.
Attendance-point software that auto-generates write-ups, scheduling tools that flag “unreliable” workers, and camera analytics that score productivity are the kinds of tools workers should watch. Keep copies of any automated warnings, scores, or notices you receive.
Three related laws take effect January 1, 2027:
- SB 951 amends the California WARN Act. When a covered mass layoff, relocation, or termination is caused substantially by AI or automation, the 60-day WARN notice must say so and identify the affected job functions and the technology involved.
- AB 1883 bars employers from using AI-driven surveillance tools that rely on facial, gait, or emotion recognition or that collect neural data, and from using surveillance to infer protected characteristics. It is enforced by the Labor Commissioner and includes a private right of action.
- AB 1331 prohibits surveillance tools in workplace bathrooms and bars employers from requiring workers to wear tracking devices in those areas, with limited exceptions, and carries civil penalties of up to $500 per violation.
FEHA: Menopause Bill Vetoed, Sex-Stereotype Protections Signed (AB 1940, AB 2563, AB 1803)
- AB 1940 was vetoed on September 30, 2026. It would have added perimenopause, menopause, postmenopause, and related conditions to FEHA’s definitions of “sex” and “medical condition.” Menopause is therefore not a separately listed FEHA category in 2027. Depending on the facts, workers facing menopause-related mistreatment may still have claims under FEHA’s existing protections, such as sex, disability, medical condition, or age.
- AB 2563 was signed and takes effect January 1, 2027. It sets a uniform definition of sex discrimination across California codes and confirms that it includes discrimination based on nonconformity with sex or gender stereotypes. Its menopause provision depended on AB 1940 and did not take effect.
- AB 1803 was signed and adds an anti-hate-speech component to California’s mandatory harassment-prevention training beginning January 1, 2028.
Recent FEHA case law is covered in our FEHA legal update.
Signed: Bereavement Leave for a Designated Person (SB 1149)
SB 1149, signed September 27, 2026, expands California’s job-protected bereavement leave—up to five days for employees of employers with five or more employees—to cover the death of a “designated person” chosen by the employee, similar to CFRA and paid sick leave. Employers may limit employees to one designated person per 12-month period. Bereavement leave can be unpaid, but employees may use available vacation, personal leave, sick leave, or compensatory time. The change takes effect January 1, 2027.
Signed: Immigration-Related Retaliation Penalties (AB 2495)
Labor Code section 1019 already forbids unfair immigration-related practices used to retaliate against workers. AB 2495, signed September 29, 2026 (Chapter 748), expands that prohibition to conduct tied to a person’s actual or perceived immigration status that would reasonably tend to dissuade someone from exercising legal workplace rights. It covers applicants and former employees, and the worker’s actual status does not matter. The law adds a civil penalty of up to $10,000 per person per violation, payable to the person harmed, beginning January 1, 2027.
Comments about “papers,” threats to call immigration authorities during a wage dispute, or extra I-9 demands after a complaint can carry this new statutory exposure. California labor claims already do not turn on immigration status; this law targets the intimidation that keeps people from asserting those claims.
Signed: Stay-or-Pay Restrictions Now Apply to Contracts From January 1, 2027 (AB 1697)
AB 692 (2025) restricted “stay-or-pay” terms—training-repayment clauses, bonus clawbacks, and similar debts that come due when employment ends. AB 1697, an urgency measure signed September 30, 2026 and effective immediately, moves those restrictions to contracts entered into on or after January 1, 2027, instead of January 1, 2026. It also expands the new-hire bonus exception to cover certain bonuses offered after hire and adds exceptions for grant-funded programs, specified securities and insurance producer agreements, and repayment of advanced paid time off.
If you were asked to sign a training-repayment or bonus-clawback agreement, the contract date and its exact terms matter. Do not assume every clawback is void, and do not assume a 2026 agreement is automatically enforceable—have it reviewed.
Signed: Higher Pay Data Reporting Penalties (SB 1237)
Larger California employers must file annual pay data reports with the Civil Rights Department. SB 1237, signed September 30, 2026, raises the civil penalty for a subsequent failure to file from up to $200 per employee to up to $1,000 per employee, starting January 1, 2027. The penalty for a first failure remains up to $100 per employee. Pay data reports help CRD identify pay disparities by sex, race, and ethnicity.
Signed: Arbitration Agreements Follow Federal Carve-Outs (AB 2155)
AB 2155, signed June 30, 2026 and effective January 1, 2027, makes a California arbitration agreement unenforceable to the same extent it would be unenforceable under the Federal Arbitration Act. That brings federal carve-outs, such as the exemption for transportation workers engaged in interstate commerce, into state law, so employers cannot use California’s arbitration statute to compel arbitration that federal law would not allow. If your employer is trying to force a claim into arbitration, the type of work you do may now matter under California law as well.
Other New Laws Workers May See
- AB 2646 sets a $19.75 hourly minimum for approved agricultural employees (largely H-2A workers) and corresponding employees doing similar work, with annual cost-of-living adjustments.
- AB 2321 requires Cal/OSHA’s Bureau of Investigations to promptly investigate a wider range of serious incidents, including serious illnesses and exposures, and to notify prosecutors sooner. Willfully resisting or interfering with Cal/OSHA becomes a misdemeanor. Effective January 1, 2027.
- AB 1961 lets an employer seek a workplace-violence restraining order on behalf of all employees at a location when threats are directed at the workplace generally. AB 2179 allows free remote appearances and electronic filing in those proceedings beginning January 1, 2028.
- AB 2150 requires employers that mandate CPR training to also require a short approved video module on administering naloxone for opioid overdoses.
What This Means for California Workers
- Check your rate on January 1, 2027. The statewide floor is $17.40; local and industry rates may be higher. Salaried “exempt” workers generally need at least $72,384 and exempt duties.
- Misclassification has a new penalty path. SB 1444 lets workers pursue section 226.8 civil penalties themselves.
- Software cannot be the only boss. After July 1, 2027, discipline or firing based solely on an automated system violates SB 947, and AI emotion-recognition and neural-data surveillance is banned starting January 1, 2027.
- Bereavement leave widens; menopause protections did not pass. You can designate one non-family person for bereavement leave each year. AB 1940 was vetoed, but existing FEHA protections may still apply to menopause-related mistreatment.
- Immigration-status threats are a legal issue, not just a scare tactic. AB 2495 adds up to $10,000 per violation on top of existing retaliation law.
- Read any repayment agreement carefully. Stay-or-pay limits apply to contracts signed on or after January 1, 2027.
If your pay, classification, leave, or termination does not match these rules—or if your employer is using automated write-ups, workplace surveillance, stay-or-pay contracts, or immigration-related threats—contact Jonny Law to discuss your situation. This post is general information about California employment law as of October 21, 2026. It is not legal advice about any specific case.
Sources: DIR News Release 2026-66 (statewide minimum wage and exempt salary formula); chaptered 2026 legislation including SB 1444, SB 1316, SB 947, SB 951, SB 1149, SB 1237, AB 1331, AB 1697, AB 1803, AB 1883, AB 1961, AB 2150, AB 2155, AB 2179, AB 2321, AB 2495, AB 2563, and AB 2646; Governor’s September 30, 2026 veto of AB 1940.
