By Nowland Law – Orange County Business Litigation Defense
Disclaimer: The following article is provided for informational and educational purposes only and does not constitute legal advice. The legislative landscape is rapidly evolving, and the application of these laws depends on the specific facts of each business. Employers should consult with qualified legal counsel before making any policy changes or employment decisions based on this information.
California’s 2025-2026 legislative session is packed with proposed bills that could drastically alter the employment landscape. While these bills are not yet law, proactive preparation is vital. Here is a breakdown of the pending legislation Orange County employers must watch.
Senate Bill 947: The “No Robo-Bosses” Act (Read More)
Currently pending in the Senate, this bill targets the use of artificial intelligence in employment decisions. Employment litigators warn that the bill shifts the burden of proof, opening the door for costly discovery into proprietary company algorithms to uncover alleged bias. The business community strongly opposes the measure, arguing its broad definition captures routine HR software and destroys the operational efficiency of AI. The bill prohibits firing an employee based solely on an automated decision system and mandates human oversight. Employers should begin mapping out human-in-the-loop procedures for HR software. Should this pass, a business attorney can help draft defensible human-review documentation and negotiate vendor indemnification agreements.
Senate Bill 951: Technological Displacement Notice (Read More)
Also pending in the Senate, this bill expands mass layoff liabilities. Litigators note it will significantly expand WARN Act exposure, likely triggering class actions over routine software upgrades. The business community warns this legislation punishes modernization and will drive technology deployment out of California. The bill lowers the mass layoff threshold to 25 workers and extends the required notice period to 90 days for AI-driven layoffs. Employers should prepare by decoupling technology implementation timelines from workforce restructuring schedules. If enacted, an attorney can help evaluate if a planned layoff legally qualifies as “technological displacement” before execution.
Assembly Bill 1883: Workplace Surveillance Restrictions (Read More)
Pending in the Assembly, this bill heavily regulates physical security. Litigators warn the $500 per-violation penalty creates a massive incentive for PAGA claims over standard security cameras. Businesses argue the ban eliminates crucial tools for combating retail theft and protecting intellectual property. The bill bans workplace facial, gait, or emotion recognition technology and prohibits inferring protected status from surveillance. Employers should audit physical security systems to identify any features utilizing biometric recognition. If these bans become law, an attorney can proactively review your security vendor contracts to ensure your infrastructure is compliant.
Assembly Bill 1331: Off-Duty Surveillance Bans (Read More)
Currently advancing through the Legislature, this bill restricts off-duty monitoring. Defense attorneys warn that ambiguous definitions will lead to heavy litigation over incidental recordings. Employers argue it creates dangerous security blind spots and risks asset theft if tracking can be disabled on company equipment. The bill prohibits surveillance in breakrooms or bathrooms and allows employees to disable tracking on company devices while off-duty. Companies should review camera placements and mobile device management software. If passed, legal counsel can draft acceptable use policies governing exactly when employees may disable tracking devices.
Assembly Bill 1940: Menopause FEHA Protections (Read More)
Pending in Assembly committees, this bill adds new protected classes. Litigators warn it transforms routine performance management into potential sex and disability discrimination claims. The business community expresses concern that accommodating highly variable conditions will complicate scheduling in shift-based industries. The bill adds perimenopause and menopause to the definition of “sex” under FEHA, requiring formal interactive accommodation processes. HR departments should prepare to treat menopause symptoms similarly to pregnancy accommodations. Should it pass, a lawyer can overhaul your handbook to formalize compliant, non-discriminatory interactive processes.
Assembly Bill 2095: Fair Chance Hiring Expansion (Read More)
Pending in the Assembly, this bill tightens background check rules. Litigators caution that forcing employers to provide written assessments to applicants will fuel pretextual hiring denial lawsuits. Businesses argue the requirement creates an immense administrative bottleneck for mass-hiring sectors. The bill requires a written assessment proving a conviction has a “direct and adverse” impact on job duties before denying employment. Employers should begin standardizing objective rubrics for evaluating criminal backgrounds. If enacted, you will need a business attorney to draft legally defensible assessment templates that satisfy state scrutiny.
Assembly Bill 2646: Agricultural Minimum Wage
Currently pending in the Assembly, this bill targets farm labor. Litigators note the ambiguity around “corresponding employees” will trigger severe misclassification and wage-and-hour class actions. Opponents warn a massive wage hike will devastate California agriculture, causing food inflation and farm closures. The bill sets a $19.75 minimum wage for agricultural and H-2A corresponding workers starting in 2027. Agricultural employers should forecast labor budgets and carefully review job descriptions. If passed, counsel can conduct privileged audits to legally define and segregate your workforce to mitigate wage claims.
Senate Bill 1149: Expanded Bereavement Leave (Read More)
Introduced and pending in the Senate, this bill expands leave rights. Litigators view the subjective definitions as inviting abuse and making verification nearly impossible. The business community argues that covering “chosen family” makes workforce scheduling entirely unpredictable. The bill expands the right to take unpaid bereavement leave for the death of a “designated person”. Employers should review current leave policies to consider how to handle broadly defined requests. Should it pass, an attorney can draft precise policy language establishing legal boundaries around notice requirements.
Assembly Bill 1900: CalCare Single-Payer Healthcare (Read More)
Introduced in the Assembly, this bill proposes universal healthcare. Defense attorneys note a transition to a state-run system would trigger massive federal preemption lawsuits under ERISA. Business leaders warn the estimated $500 billion cost threatens to trigger a mass exodus of businesses due to inevitable tax hikes. It establishes a single-payer health system and prohibits providers from entering risk-sharing agreements outside of CalCare. Companies should monitor the bill’s fiscal mechanisms closely. If this gains traction, corporate counsel will be necessary to navigate the complex unwinding of employer-sponsored health plans.
Assembly Bill 1550: Tax Deductions for Tips and Overtime (Read More)
Pending in the Assembly Revenue and Taxation Committee, this bill aligns with federal populist proposals. Litigators warn that distinguishing between deductible “qualified tips” and mandatory “service charges” will spark wage disputes. It is supported by the hospitality sector as a tool to boost worker retention without increasing base labor costs. The bill allows workers to deduct qualified tips and overtime from California state income taxes. Employers should evaluate payroll software to ensure it can isolate discretionary tips. If enacted, a lawyer can audit tip-pooling structures to prevent improper state tax withholding.
Senate Bill 984: Tax Deductions for Tips
Pending in the Senate Revenue and Taxation Committee, this is a parallel bill to AB 1550. Employment litigators anticipate increased scrutiny on tip reporting and wage statement accuracy. The service industry welcomes it to help employees stretch dollars further. It allows taxpayers to deduct qualified tips from their state taxable income. Businesses should ensure point-of-sale systems correctly categorize tips versus mandatory fees. Should it pass, an attorney can review your tip-sharing agreements to ensure funds are legally categorized, avoiding tax errors.
Assembly Bill 1803: Anti-Hate Speech Training (Read More)
Pending in the Assembly, this bill expands harassment training. Litigators emphasize the subjective nature of “hate speech” puts employers at risk of violating First Amendment-adjacent rights or the NLRA. Businesses argue it places an impossible policing burden on HR departments regarding complex socio-political speech. The bill requires employers to include specific anti-hate speech components in mandatory training. Employers should identify training vendors who can integrate these curricula. If this mandate passes, counsel must review training materials to ensure compliance without infringing on protected expression.
Senate Bill 442: Self-Checkout Restrictions (Read More)
Pending in the Senate, this bill revived efforts to regulate grocery checkout lanes after the failure of SB 1446. Litigators warn that mandating self-checkout hazards be included in safety programs opens the door for Cal/OSHA citations. Grocers argue artificial staffing ratios will increase labor costs and drive up food prices. The bill requires at least one staffed manual checkout lane, relieves monitoring employees of all other duties, and caps self-checkout at 15 items. Retailers should evaluate floor plans and staffing models. If passed, defense counsel can audit your workplace violence plans to ensure new hazard assessments comply.
Operating a business in California, and specifically in Orange County, requires constant vigilance. The 2025-2026 legislative session has unleashed a staggering array of new and proposed employment laws that threaten to exponentially increase the regulatory and financial burdens on employers. From aggressive restrictions on artificial intelligence and workplace surveillance to the revival of decades-old sexual assault claims and expansions of collective bargaining, the liability matrix for businesses is growing more treacherous by the day.
At Nowland Law, our seasoned trial attorneys are exclusively dedicated to defending employers. We believe that proactive preparation is the most effective defense against devastating litigation. Below is our exhaustive, bill-by-bill analysis of the most critical California employment legislation currently shaping the corporate landscape. We dissect the current status, litigator perspectives, business community reactions, operational requirements, and compliance strategies for each bill, underscoring exactly how specialized business counsel can help you prepare and defend your enterprise.