California's New Rules on "Robo Bosses," Clawbacks, and Pay Data

What employers should know about key developments this week:

• Limits on Automated Decisions and Surveillance: Starting July 1, 2027, under California's "No Robo Bosses Act," employers cannot base disciplinary or termination decisions solely on an automated decision-making system's output, and they face new written notice and data access obligations. Separately, AB 1883, effective January 1, 2027, bars employers from using artificial intelligence in workplace surveillance tools to predict or infer an employee's emotional state or to collect neural data.
• Stay-or-Pay Law Delayed: Amendments to California's stay-or-pay law provide some relief to employers: Clawback restrictions now apply only to contracts entered into on or after January 1, 2027, although plaintiffs may still challenge existing agreements under other legal theories. The changes also add exemptions for certain employees in the financial services industry, permit recovery of some paid time off advances, and allow more flexibility in the timing of qualifying bonus clawbacks.
• Higher Pay Data Penalties: California's penalty for an employer's first failure to submit pay data remains capped at $100 per employee per pay period, but the penalty for subsequent violations will increase from $200 to $1,000 per employee.

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