New California Employment Laws for Trade Employers (2027)

California passes a stack of employment laws every fall, and most of them are written with office jobs and big tech in mind. A few land squarely on trade shops: anyone who pays for a tech’s training, salaries a service manager, runs dispatch software that scores techs, or puts cameras in vans. Here’s what changes and what to do before January.

All the changes at a glance

Sources: CalChamber, Fenwick, Coblentz Patch Duffy & Bass, Proskauer (Inside Jobs blog), California DIR, Mayer Brown, Business Insurance, ServiceMag. Checked November 2026. Cal/WARN’s existing 75-employee threshold is unchanged.

Training and tool repayment agreements

This is the one that catches trade shops. A lot of companies pay for a new tech’s schooling, certifications, or a starter tool set, then make them sign something that says they owe it back if they leave within a year or two. California calls these “stay or pay” agreements, and AB 692 voids most of them.

What it bans: any term in a contract required as a condition of employment that makes a worker repay a “debt” (money, personal property, or the equivalent), triggers collection, or imposes a fee or penalty when they leave.

When: AB 692 originally applied to contracts entered on or after January 1, 2026. AB 1697, signed September 30, 2026 as an urgency bill, pushed that to contracts entered on or after January 1, 2027. Anything new you sign with a tech from January 1 on has to comply.

The exceptions are narrow. Per Mayer Brown’s analysis:

• Transferable credentials only covers a degree from an accredited third-party institution that isn’t required for the job. Internal or non-accredited certifications don’t qualify. Even then, the amount must be disclosed up front, can’t exceed actual tuition, must be prorated, and can only be recovered if the worker is fired for misconduct, not if they quit.
• Sign-on and other discretionary bonuses can be clawed back only under a separate agreement, after the worker is told they can consult a lawyer and gets at least five business days to do it, with an option to defer the bonus to the end of the retention period, no interest, proration, and a retention period of no more than two years. Repayment can only be triggered by a voluntary quit or a misconduct firing. AB 1697 removes the “outset of employment” requirement, so retention bonuses later in a job can now qualify.
• State-approved apprenticeship costs (California Division of Apprenticeship Standards) and government loan programs are excepted. AB 1697 also adds an exception for advanced PTO.

What that means in practice: making a tech repay the cost of an EPA 608 class, a manufacturer certification, in-house training, or a tool set if they quit is very likely off the table for new agreements. The penalty is the greater of actual damages or $5,000 per affected worker, plus attorney’s fees, and workers can sue as a group.

What you can still do: pay for training without strings, use a compliant sign-on or retention bonus, and keep company-owned tools company-owned (lend them, don’t sell them on credit). Have your attorney review your templates before January.

Minimum wage and the exempt salary floor

The statewide minimum wage goes to $17.40 an hour on January 1, 2027, and many cities and counties set higher local rates. The bigger issue for trade shops is the salary floor for overtime exemption, which is tied to it:

If you pay a service manager, dispatcher, or office manager a salary and don’t pay overtime, they need to earn at least $72,384 and meet the duties test for the exemption. A dispatcher on $60,000 who works 50-hour weeks is owed overtime in 2027. Techs paid on flat rate or commission are a separate set of rules; most are non-exempt.

No Robo Bosses Act (SB 947)

Starting July 1, 2027, employers can’t rely solely on an automated decision system (ADS), including AI, to discipline or fire a worker. If you primarily rely on one, a human has to independently corroborate the decision using the same data. You also have to give a written post-use notice when you tell the worker, and on request, a description of the data the system used.

For a trade shop, this matters if you use software that scores techs on callbacks, close rates, drive time, or GPS idle time, and you let those scores drive write-ups or terminations. Keep a manager in the loop and document what they reviewed. The law also bars using an ADS to infer protected characteristics or punish someone for exercising legal rights.

Surveillance: GPS, dashcams, and AI

• AB 1883 (Jan. 1, 2027): bans AI-based workplace surveillance tools that infer an employee’s emotional state or collect neural data. Some AI dashcams and driver-monitoring systems analyze driver faces; ask your vendor exactly what the product infers. Penalties are up to $500 per violation, enforced by the Labor Commissioner.
• AB 1331 (Jan. 1, 2027): bans surveillance tools in workplace bathrooms without a court order, and lets employees leave tools (think body cams or tracked devices) behind when they go into one, with exceptions during required meal and rest periods.
• Plain GPS on vans and phones isn’t banned by either bill. Proskauer notes AB 1883 lists geolocation as an example of a surveillance tool but only restricts emotional inference and neural data. Other California privacy and tracking rules still apply.

Bereavement leave (SB 1149)

California already requires up to five days of bereavement leave for employers with five or more employees. Starting January 1, 2027, it also covers the death of a “designated person,” someone related by blood or whose relationship is the equivalent of family. The employee can name that person when they request leave, and you can limit it to one designated person per 12 months. Update your handbook.

Immigration-related retaliation (AB 2495)

AB 2495 expands Labor Code section 1019. It bars using a worker’s perceived immigration status to discourage them from asserting rights under any local, state, or federal law, and it covers applicants and former employees. Their actual status is irrelevant. Civil penalties run up to $10,000 per affected person per violation, paid to the worker. Make sure supervisors know not to bring up status when a tech complains about pay or safety.

Workplace violence restraining orders (AB 1961)

Techs go into strangers’ homes, and sometimes a customer threatens the whole crew. Starting January 1, 2027, employers can seek a workplace violence restraining order that protects the workforce or a worksite generally, without naming one specific employee as the target. A related bill, AB 2179, allows e-filing and remote appearances starting January 1, 2028.

CSLB workers’ comp mandate

This isn’t a 2027 employment law, but it’s the deadline California contractors ask about most. SB 216 (2022) requires every CSLB-licensed contractor to carry workers’ comp, even with no employees. It already applies to:

• C-8 Concrete
• C-20 Warm-Air Heating, Ventilating and Air-Conditioning
• C-22 Asbestos Abatement
• D-49 Tree Service

For all other license classifications, SB 1455 delayed the deadline from January 1, 2026 to January 1, 2028. A solo electrician or plumber with no employees has one more year, but should be getting quotes now. ServiceMag reports CSLB is to have an exemption-verification process in place by January 1, 2027. For rate math, see workers’ comp class codes for trades.

Laws that probably don’t hit a small shop

• SB 951 (AI layoff disclosures) only applies when Cal/WARN applies, which generally means 75 or more employees.
• SB 464 and SB 1237 (pay data reporting) apply to private employers with 100 or more employees, or 100 or more workers through labor contractors. The penalty for repeated failure rises to $1,000 per employee.
• AB 2155 brings the federal transportation-worker exemption and the sexual harassment and assault arbitration rules into state law. If you have techs sign arbitration agreements, have counsel check whether they still hold up.
• AB 2563 broadens FEHA’s definition of “sex.” It’s described as declaratory of existing law; update your EEO policy language.
• AB 1803 adds anti-hate speech content to harassment prevention training, for training delivered on or after January 1, 2028.

December checklist

California makes adding a tech expensive enough without your software adding to it. VortechPro is $99/mo for 5 techs, +$20 each, so the sixth tech costs $20, not another full seat.

FAQ