2027 California Employment Law Updates: What Employers Need to Know

Employer’s Guardian Human Resources Team | November 2026

California employers preparing for 2027 have more than a payroll change to plan for. New rules affect how employers use workplace technology, report pay data, write employment agreements, administer leave and train managers. Many changes begin January 1, 2027, but not all take effect on the same day.

Minimum wage and exempt salaries

On January 1, 2027, California’s statewide minimum wage rises to $17.40 per hour. For the common executive, administrative and professional overtime exemptions, the annual salary threshold for full-time employment rises to $72,384. Salary is only one part of the exemption test; the employee’s duties must also qualify.

Check each employee’s work location and industry before changing payroll. A city, county or industry-specific minimum can be higher than the statewide rate. Review the applicable notices and download, print and post them as required. See the California Labor Commissioner’s wage and posting guidance.

Download the 2027 Minimum Salary and Wage Compliance Guide (PDF, 6 pages)

Discrimination, retaliation and harassment prevention

Review policies and manager training for actions or threats based on a worker’s perceived immigration status. Make sure managers know that an employer cannot use immigration status to retaliate against a worker who exercises protected rights.

Check that your equal employment policy reflects California Fair Employment and Housing Act protections relating to sex, gender identity, gender expression and reproductive health decisions. Beginning January 1, 2028, covered employers must include anti-hate speech content in required harassment prevention training.

Pay data reporting for employers with 100 or more employees

For covered private employers, California’s reporting categories expand from 10 to 23 beginning January 1, 2027. Map current job titles to the new categories before preparing the report. Failure to file can result in penalties; repeat failures carry a higher per-employee penalty. See the California Civil Rights Department’s pay data reporting resources.

Artificial intelligence and workplace technology

• Discipline and termination: Beginning July 1, 2027, employers may not rely solely on automated decision systems to discipline or terminate employees. When an employer relies primarily on a system’s output, a human must corroborate the decision and the employer must provide the required notice.
• Layoffs: Additional California WARN information may be required when automation or AI substantially contributes to job losses covered by the notice law. Review both the reason for the layoff and the contents of the notice.
• Surveillance: Review tools that collect neural data or monitor workers’ emotional states. New restrictions apply to specified workplace surveillance practices. Ask vendors what their tools collect and which features are enabled.

Read the state’s overview of the workplace technology laws.

Hiring and employment agreements

Changes to California arbitration law may affect the enforceability of certain agreements. Have employment counsel review the agreements used during onboarding. For contracts entered into on or after January 1, 2027, restrictions on “stay-or-pay” provisions may affect retention bonuses, tuition repayment and similar arrangements. Check the actual repayment terms and any applicable exception before issuing an agreement.

Bereavement leave

California’s bereavement leave protections expand to include a designated person: someone related to the employee by blood or whose relationship is the equivalent of family. Update the leave request process so eligible employees can identify that person and managers know where to route the request.

How Employer’s Guardian will support clients

• Compliance guidance: EG will help clients work through AI compliance, pay data reporting, leave and wage-and-hour changes.
• Handbooks and policies: EG will incorporate applicable 2027 legislative changes into client handbook updates.
• Wage and salary reviews: EG will help clients assess minimum wage obligations and exempt salary thresholds.
• Employment practice reviews: EG will review arbitration agreements used during enrollment, retention bonus programs and other affected documents with clients. Direct questions about legal enforceability to employment counsel.
• Ongoing updates: EG will continue monitoring state guidance and share implementation details as they become available.