2026 California Employment Law Updates
Key Case Law
Lam v. University of Hawaii (2024)
- Key legal precedent demonstrating how discrimination can target unique, intersecting identities, paving the way for better legal recognition of individuals facing combined forms of bias.
- The case is famous for adopting an intersectional framework, explicitly stating that discrimination against an Asian woman isn’t just race or gender bias, but a unique combination.
B. Key CA Case Law
Kruitbosch v. Bakersfield Recovery Services (2025)
- Off-site, non-work-related harassment is generally not imputable to the employer.
- BUT an employer’s response (or lack thereof) to such a complaint can create a hostile work environment.
Carranza v. City of Los Angeles (2025)
- Court upheld a $4 million harassment verdict.
- Employer took almost no action to address distribution of false nude images of employee.
- Direct face-to-face harassment is not required to bring a claim.
C. Key Federal Case Law
Ames v. Ohio Dept. of Youth Services (2025)
- Majority-group plaintiffs do not need to show “background circumstances” to bring discrimination claims.
State of Louisiana v. EEOC (2025)
- PWFA regulations cannot require accommodations for elective abortions.
- Other documentation-limiting rules remain intact.
Suggested Action Plan:
- Train HR to take all complaints seriously; inaction = liability.
- Remember, even off-duty misconduct can expose an employer to liability if management mishandles or trivializes a harassment report.
- Prompt, respectful, and consistent responses are critical
5. Automated Decision Making Systems and AI Regulation (Effective Oct 1, 2025)
Applies to all CA employers with 5+ employees and all employer agents.
Definition & Examples
ADS = computational processes that make or facilitate human decision making regarding an employment benefit
Examples:
- Conduct computer-based tests assessing skills, aptitude, or personality
- Resume screening using algorithms that assess for terms or patterns
- Targeted job advertisement or other recruiting materials to targeted groups
- Analyzing facial expression/voice analysis in online interviews
- Analyzing third-party candidate data
Prohibited Uses:
- Discrimination based on protected class
- Restricting applicants based on protected traits
- Screening based on disability unless job-related & business-necessary
- Unlawful medical/psychological exams
- Aiding/abetting unlawful discrimination
Obligations:
- Retain all ADS-related data for 4 years
- Retain complaint-related data until litigation timelines are fully exhausted
- Conduct well-documented third-party anti-bias testing
- Provide accommodation mechanisms
- Update policies, processes, vendor contracts
- Train HR, recruiters, and managers
- Provide pre-use and post-use notices explaining when and how ADS tools are used, what right they have to opt out, and how to appeal or request human review
Suggested Action Plan:
- Conduct a full inventory: Audit all existing HR technology to identify which tools qualify as an ADS.
- Define the purpose and scope of your ADS
- Be careful with sensitive date – remember AI is not designed to be secure, it’s all about data sharing and learning from that data
- Train staff on how ADS tools are used
- Preserve ADS-related records and data input, outputs, audit findings, and decision criteria for a minimum of four years
- Ensure that you add human reviews of the Gen AI outputs from your ADS
- Notify applicants and employees when ADS tools are being used to make employment decisions
- Require vendors to provide documentation of their anti-bias testing protocols, data use practices, and compliance with anti-discrimination laws.
- Offer reasonable accommodation and provide clear mechanisms for individuals to request an alternative assessment process or a human review.
- Ensure job-relatedness: Align the criteria the ADS uses directly with the essential functions and requirements of the specific job.