Minimum Wage Rates Continued to Climb July brought the next round of minimum wage hikes for healthcare workers, as well as local-level increases across various cities across the state, and in August California officials announced that the statewide minimum wage will increase for all employers to $16.90 in 2026. While members of California’s Fast Food Council pressed ahead at a January meeting with plans for a proposed cost-of-living increase to minimum wages in the fast-food sector, the Council, which is required to hold public meetings or hearings at least every six months, has essentially gone dark since February. State Cracked Down on Privacy and Cyber Issues From AG Bonta’s March announcement of an investigative sweep of the location data industry to the CPPA’s public outreach efforts related to opt-out preference signals, 2025 was a wake-up call for businesses subject to California privacy laws. See our Privacy and Cyber section for more.
2025 PREDICTIONS RECAP
CALIFORNIA
California Revived Its Role as the Leader of the “Trump Resistance”
Just as we predicted, California pushed back against the Trump administration, including in areas of federal control. For example, California issued joint guidance with other states in February reaffirming their position that workplace DEI initiatives remain legal and important to the modern workplace. And the NLRB is now suing the state over its new law that expands California’s power to decide unfair labor practice cases in the private sector, starting in 2026. We also correctly predicted that the state would move forward with groundbreaking initiatives regarding the use of AI in employment – though the path to get there was a winding one. While a bill (AB 1018) aimed at AI use in employment decisions failed to make it to the governor’s desk, and while Newsom vetoed the much-watched “No Robo Bosses Act” (SB 7), two state agencies got the job done. First, the Civil Rights Department adopted new employment discrimination rules for automated-decision systems (ADS), which took effect in October. Then, the CPPA approved a sweeping set of regulations that will impact both your AI and privacy policies starting next year. In addition, the Golden State enacted the nation’s first comprehensive attempt to require safety and transparency reporting for the most powerful AI systems. California Pushed for AI Safeguards and Accountability
PREDICTIONS FOR 2026
AI and Workplace Surveillance Will Remain in the Spotlight Despite some AI-related legislative fails this year (SB 7 and AB 1018), California regulators advanced some significant regulations of AI use by employers. This issue won’t go away anytime soon – California doesn’t like to be left behind other states, so the legislative and regulatory push will continue. Similarly, we have not seen the end of AB 1331 – a sweeping employee surveillance bill that failed to make it to the governor’s desk this year. Expect to see more legislative attempts in 2026 at changing the landscape when it comes to permissible workplace surveillance in California. California Will Continue to Respond to the Trump Administration While the state’s new labor law (AB 288), which attempts to regulate areas reserved for federal oversight, makes it ripe for a court to strike it down on preemption grounds, labor will continue to look for creative ways to counter perceived rollbacks at the federal level by enacting new state laws.
California Supreme Court Will End “Headless” PAGA Claims Even with the statutory clarifications that came along with last year’s PAGA reforms, California courts continue to wrestle with one of the thorniest aspects of the law: whether plaintiffs can maintain particularly troubling and costly “headless” PAGA claims against employers. The California Supreme Court is set to address the issue in Leeper v. Shipt , Inc., and we anticipate a decision in early 2026 that will end pre-form headless PAGA claims once and for all.
OUR PREDICTIONS WERE CORRECT
HOW DID WE DO?
MORE FROM 2025 Newsom Signed More Than a Dozen New Workplace Laws From the brand new “Workplace Know Your Rights Act,” which will require immigration-related rights notification and emergency contacts, to a ban on certain stay-or-pay contracts, here’s a round- up of some of the top workplace laws coming to California in 2026 and beyond.
Court Struck Down the State’s New Ban on “Captive Audience” Meetings California employers can breathe easier when requiring staff to attend meetings regarding their position on unionization efforts – so-called “captive audience” meetings – following a federal court striking down a new state ban on the practice. The September decision is the first to find that state-level restrictions on captive audience meetings are preempted by federal labor law and violate the First Amendment.
Benjamin M. Ebbink Sacramento/Washington, D.C. Partner
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