On October 12, 2025, Governor Gavin Newsom signed S.B. 294, the Workplace Know Your Rights Act (the “Act”), marking a significant shift in how California employers must communicate with and protect their workforce. Prompted by heightened immigration enforcement activity, the Act is designed to ensure employees fully understand their constitutional and workplace rights, particularly in situations involving law enforcement.
Below is a breakdown of the Act’s key requirements, along with additional new obligations under AB 692 and recently enacted automated decision system (ADS) regulations.
1. New Mandatory Employee Notice Requirements
S.B. 294 requires California employers to provide a stand-alone written notice to all new hires and current employees outlining:
- An employee’s constitutional rights when interacting with law enforcement at the workplace
- Workers’ compensation benefits
- Protections against unfair immigration-related practices
- The right to organize a union
Key Deadlines
- January 1, 2026: The California Labor Commissioner will publish a model notice on its website.
- February 1, 2026: Employers must distribute the written notice to all employees and continue to provide it annually thereafter.
Because the state will issue an approved template, employers should plan to review and adopt the official notice as soon as it becomes available after the new year.
2. New Arrest and Detention Notification Obligations
The Act also establishes a unique requirement related to employee arrests or detentions that occur:
- At the worksite, or
- While performing job duties offsite
Employers must notify the employee’s designated contact person in the event such an incident occurs.
Key Deadline
- March 30, 2026: Employers must give employees the opportunity to identify their designated contact person.
3. Penalties and Anti-Retaliation Provisions
Noncompliance can be costly. The Labor Commissioner may levy penalties ranging from:
- $500 to $10,000 per employee for violations of the Act.
The law also prohibits retaliation against employees who raise concerns or seek enforcement of their rights.
4. AB 692: Restrictions on Contractual “Quit Fees” and Repayment Clauses
Another major legal development, AB 692, restricts employers from requiring workers to sign employment agreements that impose financial consequences when employment ends. Prohibited provisions include:
- Repayment of debts tied to employment
- “Quit fees”
- Retraining or reimbursement fees
- Any financial penalties triggered by resignation or termination
Limited Exceptions Include
- Tuition repayment for transferable credentials
- Government-backed educational loan programs
- Approved apprenticeship programs
- Discretionary signing bonuses that meet strict fairness criteria
Any agreement that violates AB 692 is void, and employees may file civil claims. Remedies include:
- Actual damages or $5,000 per worker (whichever is greater)
- Attorney’s fees
If your business uses employment contracts containing repayment or penalty provisions, now is the time to review them. Kinetic Law can help evaluate whether revisions are required before enforcement begins.
5. New Regulations Governing AI and Automated Decision Systems (ADS)
As of October 1, 2025, new regulations restrict how employers may use AI-powered tools or automated decision systems in hiring, promotion, evaluation, and other employment decisions.
Employers may be liable even if:
- The ADS is developed or implemented by a third-party vendor
- The discrimination was unintentional or algorithmic
Required Notices
Employers must provide both applicants and employees with:
- Pre-use notices explaining when and how ADS tools will be used
- Post-use notices summarizing how the system affected the decision
- Information on:
- Any rights to opt out
- How to appeal or request a human review
Recordkeeping
All ADS-related data, assessments, and documentation must be retained for at least 4 years.
These rules reflect the state’s growing scrutiny of workplace AI and require employers to closely evaluate how technology vendors operate.
What Employers Should Do Now
California’s employment law landscape is expanding rapidly. To prepare, employers should:
- Review onboarding materials and prepare to incorporate the new S.B. 294 notices once the state releases its template.
- Implement a system for designating employee contacts by March 2026.
- Audit all employment agreements for prohibited repayment, penalty, or fee provisions.
- Evaluate all AI and automated decision tools, including vendor-provided systems, for compliance with the new ADS rules.
- Update internal policies, conduct training, and ensure HR and management teams understand these new requirements.
Kinetic Law Can Help
Staying compliant with California’s ever-changing employment regulations is challenging, but you don’t have to navigate it alone. Our team can help you:
- Review and revise employment contracts
- Ensure your hiring and HR processes comply with the new ADS rules
- Update employee notices and workplace policies
- Provide training for HR, managers, and compliance teams
If you would like guidance implementing these new requirements or reviewing your contracts or AI tools, contact Kinetic Law today.