The last California legislative session ended on September 13, 2025 and Governor Newsom must sign or veto bills passed during the legislative session by October 13, 2025, or they will automatically become law. Here’s a brief summary of what to watch over the next two weeks:
Aims to regulate the use of automated decision systems (ADS) in the workplace for the purpose of making employment-related decisions. Employers must provide detailed advance notice whenever it uses AI to make hiring or employment-related decisions, or post-action notice if it primarily relies on AI to make a decision related to discipline or termination. Employers would be prohibited from relying solely on an ADS when making a discipline, termination or deactivation decision and must use a human reviewer to review the ADS output and other information relevant to the decision. The bill carries an anti-retaliation provision and violations carry a civil penalty of $500 per violation. If signed, SB 7 will take effect on January 1, 2026 and would require businesses using AI to quickly review their current practices.
SB 642 Pay Equity Enforcement Act
Current law prohibits an employer from paying employees at wage rates less than the rates paid to employees of the opposite sex. This bill modifies the language to delete “opposite sex” and utilize “another sex” and also clarifies that “pay scale,” for the purposes of job-posting disclosures, means “good faith” estimate of the salary or hourly wage range that the employee reasonably expects to pay for the position upon hire. It also extends the statute of limitations from two years to three years after the last date the cause of action occurs.
SB 464 Employer Pay-Data reporting
The bill would require employers to store pay equity data, including demographic information related to race, ethnicity, or gender, separately from personnel records. It also would create a civil penalty for employers that fail to submit pay data reports to the CRD. Enrolled and presented to Governor on September 22, 2025
SB 294 Workplace Know Your Rights Act
This bill creates another new posting requirement (Labor Commissioner to post the template notice on its website on or before January 1, 2026, and to post an updated template notice annually thereafter) and would require a stand-alone written notice to each employee addressing independent contractor misclassification protections, heat illness prevention, workers’ compensation, paid sick days, protections against unfair immigration-related practices, the right to notice of federal immigration inspections, the right to organize a union in the workplace, and constitutional rights when interacting with law enforcement at the workplace. This obligation would commence on or before February 1, 2026, and continue annually thereafter. Further, the bill would require employers to notify an employee’s emergency contact in the event that the employee is arrested or detained while at work. Tip: Employers should include the new notice in onboarding distribution using DLSE template.
SB 261 DLSE Posting Of Unpaid Awards
The bill would mandate that the Labor Commissioner’s Office post to its website any unsatisfied awards against employers. The bill would impose a penalty equal to three times the award if the award remains unsatisfied after 180 days. A prevailing employee would also recoup all reasonable attorney’s fees and costs incurred in enforcing the judgment.
For contracts entered into on or after January 1, 2026, this bill would make it unlawful to require the worker pay an employer, training provider, or debt collector for a debt (such as training costs) if the worker’s employment or work relationship terminates. The bill would authorize a private right of action and specify civil penalties. There are narrow carve outs. Tip: Employers should scrub offer letters and tuition policies.
Already signed and effective January 1, 2026, SB 648
Authorizes the state’s Labor Commissioner to investigate and issue a citation or file a civil action for gratuities taken or withheld in violation of the Labor Code. SB 648 ensures citation procedures mirror those used for minimum wage violations. Tip: Employers should familiarize themselves with what is defined as a tip or gratuity under the CA Labor Code. Service Charge vs. Gratuity and Why It Matters Revisited | California Employment Law