September 5, 2026

The Legislature adjourned on Monday night, August 31, 2026, and everything it passed is now on Governor Newsom’s desk. He has until September 30 to sign or veto each bill. This is his last signing period before his term ends in January, so there is no next year for him to reconsider anything — what he signs this month is the law employers will be living with in 2027, and what he vetoes is dead until a new governor and a new Legislature take it up.

I have reviewed bills that I thought would impact California employers the most, with a particular eye toward restaurants and hotels. There are more than five, so this week’s Friday’s Five is organized by theme rather than by bill. Unless a bill carries an urgency clause or sets its own date, anything signed takes effect January 1, 2027.

1. Three bills aimed squarely at restaurants and hotels.

AB 1640 — California Restaurant Reservation Anti-Piracy Act. This bill prohibits selling or transferring a restaurant reservation for more than what was originally paid to get it. It gives enforcement authority to the Attorney General, county counsel, city attorneys, and restaurants and diners who are harmed, and it creates a state fund to hold penalties recovered by the Attorney General. It passed the Assembly 78–0 on final concurrence and was backed by the California Restaurant Association. For full-service operators who have watched their prime-time tables get scalped on third-party apps, this is welcome. If it is signed, update the terms on your online booking platform to reference the law and train hosts on how to document suspected resales.

AB 2663 — Cocktails-to-go extended through 2029. The pandemic-era authority for restaurants (bona fide public eating places with an on-sale license) to sell manufacturer-prepackaged spirits and other non-beer alcoholic beverages for off-premises consumption with a meal was set to expire December 31, 2026. AB 2663 extends it to December 31, 2029. It is an urgency bill, so it takes effect immediately on signature. No employment changes here, but if to-go cocktails are part of your revenue mix, watch for the signature so you are not planning around a program that lapses at year end.

AB 2721 — Hotels must disclose federal immigration-enforcement reservations. This one is specific to hotels and was hard-fought. A hotel operator that knows, or should know, that ICE or CBP has reserved rooms would have to post a notice to hotel workers identifying the agency and the duration of the stay, and would have to disclose the potential agency presence to guests at check-in. Violations are actionable under the Unfair Competition Law, with liability capped at $5,000, and the provisions sunset January 1, 2029. The Asian American Hotel Owners Association, which represents a majority of California’s hotels, opposed it on the ground that the “knows or should have known” standard is impossible to administer. The Governor has signaled reservations about several immigration-enforcement bills this session, so this is a genuine veto candidate. Hotel clients should draft a booking-review protocol now but hold implementation until the Governor acts.

2. Immigration-related conduct toward workers just got much more expensive.

AB 2495 — Unlawful immigration-related practices. Of everything on this list, this is the bill I would put at the top of the training agenda for restaurant and hotel managers. Labor Code section 1019 already prohibits immigration-related retaliation — threatening to call ICE, requesting more or different documents than the I-9 requires, and the like. AB 2495 expands the prohibition to any conduct “related to any person’s perceived immigration status” that would reasonably tend to dissuade a worker from exercising rights under any local, state, or federal law, or that coerces a worker into doing something the worker could lawfully refuse. The worker’s actual immigration status is irrelevant. And the bill adds a new civil penalty of up to $10,000 per employee per violation, payable to the worker, on top of existing remedies. It passed the Assembly 60–13 with no registered opposition, which usually means it gets signed.

What this means in practice: a comment about someone’s paperwork during a scheduling dispute could become $10,000-per-employee exposure, and it might show up as a tag-along claim in PAGA and wage cases. If this is signed by the Governor, employers must update the anti-retaliation policy to specifically address immigration-related comments and threats, retrain managers, and pair it with the Workplace Know Your Rights notice (SB 294) that has been required since February.

3. Technology in the workplace: AI decisions, surveillance, and layoffs.

SB 947 — The “No Robo Bosses Act.” The Governor vetoed a broader version of this bill (SB 7) last year, citing the notice burdens. Senator McNerney came back with a narrower version that passed the Assembly 53–14 and the Senate 28–10. If signed, beginning July 1, 2027, employers may not rely solely on an automated decision system to discipline or discharge a worker — a human being must make the final decision with corroborating evidence. The bill also bans systems that predict a worker’s behavior, beliefs, personality, or emotional state, that infer protected characteristics, or that identify workers who exercise legal rights. When an employer primarily relies on such a system in a discipline or termination decision, it must provide written notice to the worker after the fact and allow the worker to obtain the data the system used. Enforcement is by the Labor Commissioner and public prosecutors with a $500 civil penalty per violation, and there is a private right of action.

Most restaurant operators do not think of themselves as using “AI” in HR, but attendance-point systems that automatically generate write-ups or terminations, scheduling software that flags unreliable employees, and camera analytics that score productivity all fall within the definition. The homework for 2027 is an inventory of every tool that scores or flags employees, and a human review step before any of those outputs turn into discipline.

AB 1331 — No surveillance in bathrooms. This started in 2025 as a broad restriction on workplace surveillance and was narrowed to something everyone can agree with: employers may not monitor or surveil employees in a workplace bathroom, and employees may leave surveillance devices (wearables, tracking apps, location-enabled radios) behind when they go in. Labor Commissioner enforcement, up to $500 per violation. Check your camera fields of view near restrooms and locker areas, and make sure any device policy allows employees to leave devices outside.

AB 1883 — No emotion recognition or neural data. Prohibits employers from using AI-based surveillance tools that collect neural data or claim to recognize an employee’s emotional state. Same $500 penalty structure. Ask your camera-analytics and call-monitoring vendors whether any feature scores employee “sentiment” or “engagement,” and turn it off for employees.

SB 951 — WARN notices for AI-driven layoffs. When a mass layoff, relocation, or termination results in whole or substantial part from AI or automation replacing positions, the Cal-WARN notice must include specified information about the job functions being automated, and EDD will publish summaries and report to the Legislature by 2028. Earlier versions of the bill would have required 90 days’ notice and lowered the trigger to 25 employees; the final version works within the existing 60-day Cal-WARN framework. This matters for larger hospitality groups rolling out kiosks, AI drive-throughs, or automated back-office functions across a covered establishment.

4. Leave, discrimination, and training: the handbook updates for 2027.

SB 1149 — Bereavement leave for a “designated person.” California already requires employers with five or more employees to allow up to five days of bereavement leave for the death of a family member. SB 1149 adds a “designated person identified by the employee” to that list, following the same concept already in CFRA and paid sick leave. Employers may limit an employee to one designated person per 12-month period. If passed, employers will need to update the bereavement policy and the leave-request form.

AB 1940 — Menopause protections under FEHA. Adds perimenopause, menopause, postmenopause, and related medical conditions to the definition of “sex” under FEHA, which brings them within the discrimination, harassment, and reasonable-accommodation framework. The Civil Rights Department must update its workplace poster by July 1, 2027. A companion bill, AB 2563, directs that all sex and gender discrimination laws be liberally construed and defines sex discrimination to include actual or perceived conformity to sex or gender stereotypes. In restaurants, the practical accommodations are temperature relief, break flexibility, and uniform adjustments — add it to manager training on the interactive process.

AB 1803 — Anti-hate speech component in harassment training. Beginning January 1, 2028, the biennial sexual-harassment prevention training that employers with five or more employees already provide must include an anti-hate speech component addressing workplace speech that vilifies, humiliates, or incites hatred based on protected characteristics. Nothing to do for the 2027 training cycle, but if it is signed, confirm your training vendor will have the module ready for 2028.

AB 1697 — Stay-or-pay ban delayed one year. Last year’s AB 692 made most “stay-or-pay” provisions — training-cost repayment, retention bonus clawbacks, and similar terms — unenforceable as of January 1, 2026. AB 1697 is an urgency bill that pushes the operative date to January 1, 2027 and adds exemptions for grant-funded recruitment and retention bonus programs, repayment of advanced PTO on voluntary separation, and certain securities and insurance affiliation agreements. Employers who advance vacation or use sign-on bonus clawbacks get a partial safe harbor, but every repayment agreement still needs to be reviewed before January 1.

5. Enforcement, litigation, and the bills that touch a narrower group of employers.

AB 2321 — Cal/OSHA criminal referrals. Requires the Bureau of Investigations to investigate any serious injury, illness, or exposure where a willful violation is cited, requires immediate notice to the district attorney for incidents involving five or more serious injuries or a fatality, allows trade-secret information gathered in an inspection to be shared with prosecutors, and makes it a misdemeanor to willfully resist or interfere with a Cal/OSHA inspector. Managers should never obstruct an inspector, but the right to ask for a warrant remains. This is a good reason to dust off the Injury and Illness Prevention Program and the workplace violence prevention plan.

AB 1961 and AB 2179 — Workplace violence restraining orders. AB 1961 lets an employer seek a workplace violence restraining order protecting all employees at a specific location without naming each one. AB 2179 requires courts to allow remote appearances and electronic filing for those petitions. Both are useful tools for restaurants and hotels dealing with a threatening ex-employee or patron.

SB 690 — Fewer website-tracking lawsuits. Businesses have been on the receiving end of a wave of demand letters under the California Invasion of Privacy Act over tracking pixels, session-replay tools, and analytics on their websites and online-ordering pages. SB 690 limits enforcement of the “pen register” provision (Penal Code section 638.51) to the Attorney General when the conduct involves a website or app, and applies to pending claims filed within two years before the effective date. It passed the Senate 39–0. It does not touch the wiretap provision (section 631) that most of these cases are actually filed under, so keep the cookie banner and privacy policy in place.

SB 1237 — Pay data reporting penalties. Raises the maximum penalty for a repeat failure to file the annual California pay data report from $200 to $1,000 per employee. Only employers with 100 or more employees (or 100 or more workers through labor contractors) file, but for those who do, the May 2027 filing just became more important.

AB 1776 — Cartwright Act expansion. Extends California antitrust law to single-firm monopolization using a “substantial market power” standard. Enforcement is limited to the Attorney General and district attorneys, small businesses (roughly 100 or fewer employees and $10 million or less in revenue) are exempt, and it is not a predicate for Unfair Competition Law claims.

AB 2646 — Agricultural minimum wage. Sets a $19.75 hourly minimum for approved agricultural employees (H-2A workers and their domestic counterparts), indexed annually. It is expected to draw legal challenges if signed.

Already signed. Two employment bills were signed on August 27 and did not get much attention. SB 1444 allows an individual employee, not just the Labor Commissioner or a prosecutor, to recover the civil penalties for willful independent-contractor misclassification under Labor Code section 226.8. SB 1316 bars employers from introducing records at a Labor Commissioner retaliation hearing that they did not produce when the Labor Commissioner asked for them, so respond completely to those document requests the first time.

What did not make it. For those keeping score, the bills that died this session include AB 1898 (an annual inventory and disclosure of every workplace AI tool), AB 2095 and AB 2064 (expanded criminal-history protections in hiring), AB 1234 (a penalty of up to 30% on Labor Commissioner orders), AB 1018 (the broad Automated Decisions Safety Act), and the state “no tax on tips” conformity bills (SB 984 and AB 1550), which were held in committee.

The bottom line: the Governor’s decisions by September 30 will set the 2027 compliance agenda. If the bills above are signed, the January 1 to-do list for employers is a handbook update (bereavement leave, FEHA protected characteristics, anti-retaliation with immigration language, device and surveillance policy), manager training on immigration-related conduct and Cal/OSHA inspections, and an inventory of every piece of software that scores or flags employees ahead of the July 1, 2027 operative date for SB 947. I will publish a follow-up once the Governor has acted. As always, this article is a general overview — if you have questions about how any of these bills affect your business, please reach out.

Our 5th Annual “Sign or Veto” Contest

To make this season of legislative suspense a little more fun, we invite you to participate in the 5th Annual Zaller Law Group “Sign or Veto” Contest. This is the Governor’s final signing period, so it is also the final round against Governor Newsom — here is your chance to test your knowledge of California politics and workplace trends:

• Review the list of key employment bills we’ve picked (with a few non-employment curveballs included).
• Make your picks: Will Governor Newsom sign the bill into law, or exercise his veto power?
• Submit your entry before Friday, September 25 at midnight.

Prizes:

• Champion: Zaller Law Group Yeti cooler backpack
• 2nd & 3rd place: Exclusive Zaller Law swag
• All participants: Bragging rights for your California political and employment law expertise

How to Play:

1. Register your predictions here.
2. Submit your entry by September 25, 2026.
3. If there are any ties, the order will be determined by time of entry with the earliest entry winning.

Winners will be announced after the Governor’s September 30 deadline!

The post 2027’s Potential New Employment Laws Are Sitting on Governor Newsom’s Desk — Here Are the Key Measures appeared first on California Employment Law Report.