Summary of September 2025 Labor Law Updates for San Diego, California
Welcome to HKM Employment Attorneys’ monthly California labor law roundup. Below is a curated summary (with sources) of major new developments in September 2025 affecting employment, workplace rights, and labor relations in California. This is intended for employees, HR professionals, and compliance teams tracking the evolving legal landscape.
September 2025 brought landmark changes in California labor law. The signing of AB 288 empowers state-level enforcement of union and unfair labor practice rights when federal mechanisms lag; regulatory regimes governing AI in employment move from proposal to legal reality; and a major class settlement highlights the continuing legal risks of wage and ordinance noncompliance. As SB 7 awaits final action, employers should stay alert to its potential overlay on existing AI rules. If you or your organization would like a deeper dive into any of these developments—or assistance updating your policies or practices—please reach out to your local office of HKM Employment Attorneys (https://hkm.com).
AB 288 – Expansion of PERB Authority over Private Sector Labor Disputes (Legislation)
Date: September 30, 2025
Summary:
Governor Newsom signed Assembly Bill 288, which gives the California Public Employment Relations Board (PERB) authority to take up certain unfair labor practice and union representation matters in the private sector when the National Labor Relations Board (NLRB) has failed to act in a timely manner or cannot act. Under AB 288:
- If a worker (as of January 1, 2025) is covered by the NLRA and the NLRB has not processed their petition or charge within six months, the worker may petition PERB for relief.
- PERB may conduct elections, adjudicate unfair labor practice claims, order remedies (including civil penalties), require binding mediation, and certify exclusive bargaining representatives.
- The legislation establishes a Public Employment Relations Board Enforcement Fund to be financed by civil penalties collected from violators.
Implications:
This is a significant shift in California labor law: it provides a state-level “backstop” when the federal NLRB is unable to act. Some observers describe this as the most dramatic labor law reform in California in decades Employers with operations in California that are already subject to the NLRA should monitor whether they might attract new PERB-driven claims when the NLRB misses statutory deadlines. Counsel should consider preparing for overlap and preemption issues as federal and state jurisdictional lines are tested. Some legal challenges to AB 288’s constitutionality or federal preemption are anticipated.
California Civil Rights Council Finalizes AI / Automated Decision System Regulations (Regulation)
Date: September 2025 (effective October 1, 2025)
Summary:
In September, the California Civil Rights Council (CCR Council) secured final approval of new regulations under the Fair Employment and Housing Act (FEHA) to govern the use of automated decision systems (ADS), algorithms, and AI in employment decision-making.
Key features include:
- A broad definition of ADS that encompasses algorithmic decision tools used in recruitment, hiring, promotion, termination, training, and other employment actions.
- Prohibitions on use of ADS if they result in discriminatory outcomes based on protected categories under FEHA.
- Requirements that employers provide reasonable accommodations where ADS interfere with religious or disability rights.
- The regulations clarify that existing anti-discrimination laws apply to ADS, rather than creating entirely new substantive obligations.
Implications:
Starting October 1, 2025, California employers using algorithmic or AI-based decision tools must audit, validate, and, if needed, adjust those systems to avoid disparate impact. Employers should proactively assess their HR tech stack (resume screeners, chatbot screening tools, promotion algorithms, etc.) for compliance, retaining documentation of bias audits and validation results. Legal exposure increases: claims that rely on “black box” AI decisions will face heightened scrutiny under FEHA with these regulations in place.
Disney Employees’ Living Wage Settlement Approved (Court Decision / Class Settlement)
Date: September 17, 2025 (court approval)
Summary:
A California court approved a $233 million class action settlement in Grace et al. v. The Walt Disney Company et al. covering over 51,000 Disneyland and associated employees who claimed Disney violated Anaheim’s living wage ordinance (Measure L) by underpaying wages, failing to properly apply service charges, and ignoring wage increase obligations. The settlement allocates approximately $179.6 million to affected workers, $17.5 million in civil penalties to the California Labor & Workforce Development Agency, and $35 million to attorneys.
Implications:
This is among the largest wage-and-hour class settlements in California history and underscores enforcement risk for employers in jurisdictions with local wage ordinances. Employers in cities with local wage laws should closely monitor compliance (including retroactive increases, service charge accounting, and wage notice requirements). This settlement may embolden other class actions in jurisdictions that adopt or enforce living wage ordinances.
SB 7 “No Robo Bosses” – AI in Employment Under Consideration (Pending Legislation)
Date: Passed Legislature (Sept 2025), awaiting governor decision by Oct 12, 2025
Summary:
Senate Bill 7, dubbed the “No Robo Bosses Act,” passed the California Legislature in September and would take effect January 1, 2026 if signed.
Key proposed provisions include:
- Prohibiting employers from relying solely on AI/ADS for adverse employment decisions (such as termination or discipline) without human review.
- Requiring disclosures to employees about the use of ADS, including how the systems function and criteria used.
- Restricting inferences about protected class status via ADS and applying ADS obligations to independent contractors.
Implications:
If enacted, SB 7 would complement the CCR’s FEHA regulations, placing statutory guardrails on AI use in employment. Employers that plan to use AI tools for personnel decisions should monitor the governor’s decision threshold (October 12, 2025) and be ready to adjust practices. Because SB 7 expressly covers contractors, gig operators and contracting firms should watch for expanded compliance burdens.
Conclusion: Looking Back on California’s Labor Law Updates from September 2025
As California courts continue to shape protections around wage-and-hour violations, discrimination, contract enforcement, and whistleblower claims, you need attorneys with deep local insight. At HKM Employment Attorneys in San Diego, Managing Partner Cecilia Brennan leads a team dedicated to employee advocacy—from contract review and severance negotiations to hostile work environment cases and unpaid wages—all with fearless, no‑fee‑unless‑we‑win representation . If recent legal developments affect your workplace situation, reach out to our San Diego office to discuss how we can help you enforce your rights.
