California Sends Newsom a $19.75 Farm Wage, an AI Firing Rule and Website Lawsuit Relief; Arizona's Data Center Pause Takes Effect

The bottom line today

$19.75 an hour. That is the floor California’s Legislature just set for farms that bring in H-2A guestworkers, and for the local crews working beside them [4]. It sits on Gov. Newsom’s desk with two other bills that matter to employers: one that puts a human in charge of any firing an algorithm recommends, and one that closes off a category of website-tracking lawsuits that has buried businesses in demand letters [1, 6, 7]. He has until September 30 [3]. Two of the three add cost. The third removes some, and it is the one he should sign first. In Arizona, the budget’s tax law takes effect Saturday, and it is a mixed bag for business [8, 11].

CA California AB 2646: a $19.75 wage floor for H-2A farm labor

What it does. AB 2646, by Assemblymember Krell, adds Labor Code Section 1208 and sets a $19.75 hourly minimum for an “approved agricultural employee” (a nonresident working in California on a temporary or seasonal basis under an approved job order) and for any “corresponding employee,” meaning a California resident doing the same or substantially similar work for the same employer in the same county [4]. Starting January 1, 2027, the rate rises each year by the Social Security cost-of-living adjustment [4]. Violations fall under the existing criminal wage provisions [4].

Where it stands. Enrolled August 27 and listed among the bills awaiting the governor’s decision [3, 4].

Pratt’s read. The bill answers a federal change. A Labor Department rule implemented last October altered how the H-2A Adverse Effect Wage Rate is calculated, “effectively lowering it in California from $19.97 to the state minimum wage of $16.90,” Ag Alert reported, and about 70% of California H-2A employers moved pay to $16.90 within six months [5]. The United Farm Workers support AB 2646, and Krell calls it “a bottom line wage” for workers who carry California agriculture [5]. That is a fair case for guestworkers.

The trouble is the second definition. The corresponding-employee clause pulls in local workers across the same county, which is why the Farm Bureau’s Bryan Little warned it could become “effectively a super minimum wage for agriculture” and could raise food prices [5]. A grower that hires one guestworker crew would reprice every comparable local job in that county. Zaller Law Group expects legal challenges if the governor signs it [3]. No estimate of the cost to growers appears in the record this release draws on.

CA California SB 947: a human must sign off on AI-driven firings

What it does. SB 947, by Sen. McNerney, adds a new part to the Labor Code beginning July 1, 2027 [1]. An employer may not “rely solely” on an automated decision system for discipline or termination. When it “primarily relies” on one, a human must corroborate the decision with supporting information such as supervisor evaluations, personnel files or work product; if the output can’t be corroborated, it can’t be used [1]. The employer must give a stand-alone written notice at the time of the decision, and the worker may request a description of the data the system used [1]. Systems may not be used to infer protected status or to predict and punish workers for exercising legal rights [1].

Where it stands. The Assembly passed it 53-14 and the Senate concurred 28-10 on August 31 [2, 3]. It is a narrower version of SB 7, which the governor vetoed last year [3].

Pratt’s read. The narrower rewrite is an improvement on SB 7. A human reviewing a termination is already what most careful employers do. The cost is in the enforcement section. The Labor Commissioner and public prosecutors can sue, with a $500 civil penalty per violation, punitive damages and attorney’s fees on the table [1]. Once a worker shows a system was used, the burden shifts to the employer to prove it did not primarily rely on it, or that it followed the rules [1]. There is no employee-count threshold in the definition of employer, and local ordinances with stronger rules are not preempted [1]. The California Labor Federation sponsors the bill, and McNerney’s case is that “AI must remain a tool controlled by humans” [2]. The goal is reasonable. A burden shift and no small-business exemption make it expensive for a staffing firm or a 30-person warehouse.

CA California SB 690: website-tracking suits go to the Attorney General

What it does. SB 690, by Sen. Caballero, amends Penal Code Section 637.2, the civil remedy in the California Invasion of Privacy Act, so that a claim against a private business under Section 638.51 (the pen-register and trap-and-trace provision) arising from a website, online application or mobile app “may be brought under this section only by the Attorney General” [6]. The change applies retroactively to pending claims in actions filed within two years before it takes effect [6].

Where it stands. Passed August 28, 66-0 in the Assembly according to Sidley Austin, and now on the governor’s desk [7]. Sidley gives a January 1, 2027 operative date [7].

Pratt’s read. Good news, and overdue. The bill’s sponsors say website-tracking suits under CIPA climbed from “roughly 600 to nearly 4,000” while it was pending, Sidley reports, alongside thousands of demand letters [7]. With statutory damages of $5,000 per violation and no need to show actual harm, the math favored filing [6]. Lawmakers narrowed the bill in a compromise with the plaintiffs’ bar: claims under Sections 631 and 632 stay open, and presuit demand letters are not wiped out automatically [7]. The other side’s concern is the obvious one: a private remedy goes away, and Sidley notes the Attorney General has held this authority for more than a decade without using it against tracking technologies [7]. Consumers keep the wiretapping claims. Businesses lose one of the cheapest suits to file against them. The bill amends a single section of the Penal Code, which makes it the shortest relief on the governor’s desk.

AZ Arizona HB 4168: the data center pause and the credit repeals take effect

What it does. Arizona’s tax omnibus, Chapter 140, takes effect on the September 12 general effective date, with retroactive pieces [8, 11]. From July 1, 2026 through June 30, 2029, the Arizona Commerce Authority may not accept applications for any new computer data center, and no new center qualifies for the tax relief created in 2013 [8]. The law also eliminates the refundable portion of the Research and Development Tax Credit, repeals the Credit for New Employment and the Credit for Pollution Control Equipment for tax years starting in 2026, and adds back the federal special depreciation for qualified production property [8]. On the other side of the ledger, it raises the cap on prime contracting tax revenue paid to cities and counties for manufacturing-site infrastructure, to $250 million and eventually $350 million, while lifting the minimum investment in the largest counties to $3 billion from $500 million [8].

Where it stands. Passed 47-11 in the House and 23-5 in the Senate, and signed June 13 [8].

Pratt’s read. Gov. Hobbs wanted a full repeal of the data center exemption and settled for a pause; her office estimates it saves $57 million [10]. She said the pause “gives us time to make sure that data centers are actually working for Arizonans” [9]. Existing centers keep their breaks, which avoids the retroactive cancellation problem [9]. Arizona Chamber CEO Danny Seiden said the state does “want these large capital investments” and hopes the incentive returns [9]. The pause is a fair compromise. The quieter hit is to manufacturers: the production-property addback means Arizona will not follow the federal write-off for new factory buildings, and the hiring and R&D credits are gone [8].

On the calendar

Arizona’s laws take effect Saturday, September 12 [11]. Gov. Newsom must act on AB 2646, SB 947 and SB 690 by September 30 [3]. If signed, SB 690 applies January 1, 2027, and SB 947 on July 1, 2027 [1, 7]. Arizona’s data center window reopens after June 30, 2029, unless lawmakers change it first [8].