Mental Health Issues Among Construction Workers Grow
Nearly two-thirds of U.S. construction workers say they have experienced anxiety or depression in the past year, according to a new survey of more than 2,000 workers and executives.
Poor mental health can increase the risk of injuries, slow projects and drive up absenteeism, turnover and disability claims. OSHA now highlights workplace stress and mental health as key safety concerns, noting that stress contributes to physical illness, impaired concentration and higher injury rates.
While the industry overall has made large strides in improving and promoting workplace safety, it’s been slow in recognizing the effects of mental health on safety. The survey by St. Louis-based construction firm Clayco explores the mental health and psychological safety issues construction workers face and how employers can establish protocols and services to identify and assist workers in need.
How mental health affects safety and performance
According to OSHA:
- Stressed and fatigued workers are more likely to miss hazards, make errors and cut corners, increasing the chance of falls, struck-by incidents and other injuries.
- Long-term stress contributes to physical problems like heart disease, high blood pressure, chronic pain and sleep issues.
- Anxiety and depression undermine focus, motivation and judgment, which can affect safety, quality and productivity.
- Workers dealing with untreated mental health issues are more likely to miss work.
Key findings from the Clayco survey
The survey by St. Louis-based construction firm Clayco found that:
- 64% of construction workers reported anxiety or depression in the last 12 months.
- Top drivers of distress were the physical demands of the work (47%), poor work-life balance (42%) and tight deadlines (41%).
- 36% missed work due to mental health concerns in the last year.
- 45% said they would feel ashamed talking about mental health, addiction or suicidal thoughts with coworkers.
- 37% of those who used mental health services reported discrimination or unfair treatment at work.
What construction leaders can do
The good news is that there are proven steps companies can take.
Treat mental health as a safety priority — Put mental health on the same footing as fall protection or lockout/tagout. Include it in safety policies, job hazard analyses, orientation and toolbox talks. Remind supervisors that stress, fatigue and distraction are risk factors for incidents.
Train supervisors to recognize warning signs — Provide frontline leaders with training on how to spot behavior changes, withdrawal, irritability, substance misuse and other signs of distress, and how to have supportive conversations. OSHA and other organizations offer supervisor guides and mental health conversation tools tailored to employers.
Promote the services you offer — Audit what mental health benefits you offer, from Employee Assistance Programs to telehealth and counseling. Place information about these services in break areas, pay-stub inserts and safety talks, and repeatedly reinforce that services are confidential.
Reduce stigma through leadership example — Leaders who talk openly about stress, burnout or using counseling send a powerful signal that it’s okay to ask for help.
Address jobsite stressors you can control — Review schedules, overtime expectations, travel demands and staffing levels. Where possible, rotate assignments to limit extended travel, set more realistic deadlines, build in recovery time after major pushes and ensure workers can take breaks and time off without penalty.
Discipline Should Be Part of Your Safety Program
Does your injury and illness prevention program spell out the disciplinary action your company will pursue if its safety rules are not adhered to?
Addressing disciplinary issues can be a very sensitive and stressful process for most managers, supervisors and employees. However, if such issues are avoided or handled poorly, it can lead to serious consequences such as property damage, injury – or even fatality.
Looking at discipline not as a form of punishment but as a rule or system of rules governing conduct or activity in order to eliminate unsafe circumstances, might ease the stress for the owner, manager and employee.
Education is the key to establishing proper disciplinary procedures and holding workers accountable to the company’s health and safety policy and program, as well as to applicable regulatory requirements.
The main objective of a disciplinary program is to ensure that rules and safe work practices are taken seriously by all employees, and that they are followed. When disciplinary action is deemed appropriate, it should be conducted in a timely manner. Trying to conduct a disciplinary response to unsafe behavior by waiting only allows a habit to become more ingrained.
Discipline should be positive, not punitive or negative. The goal is to correct the problem, action or behavior. The type of discipline should fit the severity of the misconduct, and it should be conducted in private.
Five-step disciplinary program process
- Reviewing policy and procedures (managers and supervisors).
- Investigation of accusations and infractions (supervisors and safety and health reps).
- Determining and reviewing disciplinary action (supervisors and safety and health reps).
- Documenting disciplinary actions and program enforcement (supervisors and safety and health reps).
- Conducting disciplinary meetings and promoting safe work practices and compliance to regulatory requirements (supervisors and safety and health reps).
If your company hires subcontractors, they should also be required to comply with your health and safety policy.
Sample disciplinary action
You should make it clear that the company reserves the right to discipline employees who knowingly violate company safety rules or polices. Disciplinary measures will include, but not be limited to:
- Verbal warning (documented) for minor offenses.
- Written warning for more severe or repeated violations.
- Suspension, if verbal and written warnings do not prove to be sufficient.
If none of the above measures achieves satisfactory, corrective results, and no other acceptable solution can be found, the company will have no choice but to terminate employment for those who continue to jeopardize their own safety and the safety of others.
Non-punitive discipline
The first step of formal non-punitive discipline is to issue an oral reminder, with the manager’s primary goal being to gain the employee’s agreement to solve the problem.
Should the problem continue, the manager moves to the second step – the written reminder. Together, the manager and the worker create an action plan to eliminate the gap between actual and desired performance.
If disciplinary discussions have failed to produce the desired changes, management then places the individual on a paid, one-day “decision-making leave.” Tenure with the organization is conditional on the individual’s decision to solve the immediate problem and make a “total performance commitment” to good performance on the job.
The employee is instructed to return on the day following the leave with a decision either to change and stay, or to quit and find more satisfying work elsewhere.
Thus, the purpose of the disciplinary transaction has changed from a punishment method to a process that requires individuals to accept responsibility for their own behavior, performance and continued participation in the enterprise.
Insurance That Helps You Survive Another Business’s Disaster
In October and November of 2011, floods inundated large parts of central Thailand, including thousands of factories that made everything from automotive parts and hard disk drives to eyeglass lenses and air conditioners. In addition to the human and economic cost in Thailand, the disaster affected businesses around the world.
Carmakers in Detroit shut down because they could not get the parts they needed and half of the world’s hard disk drive production was wiped out, leaving computer manufacturers with stalled assembly lines. When disasters like this occur, businesses around the globe feel the effects.
In addition to making advance arrangements for alternative suppliers, businesses can protect themselves by purchasing two types of insurance coverage: Contingent business interruption, and supply chain insurance.
Contingent business interruption
Contingent business interruption insurance, also called business income from dependent properties, pays for a business’s lost profit plus continuing expenses when it must slow or stop operations because of damage to another business’s property.
These other businesses can be customers or suppliers. For example, if a motorcycle dealership was left with no bikes to sell because its supplier in Japan suffered a fire, the insurance would make up part of the lost income.
The damage must result from a cause of loss that the insurance policy covers, such as fire or a hurricane. This is important because standard property insurance policies do not cover losses caused by catastrophes such as floods and earthquakes.
Supply chain coverage
Supply chain insurance takes contingent business interruption a step further. It covers income lost because of damage to a supplier’s or customer’s property. However, it also covers losses resulting from events that do not cause physical damage. These may include:
- Labor disruptions
- Production process problems
- Trade disputes
- Wars
- Political turmoil
- Closed roads, bridges, railroads and shipping channels
- Public health crises
- Actions by regulators
- Financial difficulties
Businesses often have different tiers of suppliers, with key suppliers in the top tier and less important ones in the lower tiers. It is common for them to insure only the top tier.
However, insurers are increasingly offering multi-tier coverage. This applies to the business’s entire supply chain. Multi-tier coverage provides a more comprehensive solution for the business while also spreading out the insurer’s risk.
Some insurers offer options. One lets policyholders choose between measuring losses in terms of gross earnings or number of units from the supplier. Some also offer agreed-value coverage, which eliminates penalties for buying amounts of insurance less than the amounts of value at risk.
Businesses should determine where they are vulnerable to supply chain losses and develop back-up plans for dealing with unexpected disruptions. These could include reserves of the needed supplies and contracts with alternative suppliers.
Insurance can help the business recover from a supply chain loss after the fact. Advance planning can help make that loss as small as possible.
If you would like to know more about business interruption insurance, don’t hesitate to contact us.
Businesses Scramble to Comply with EEOC’s New Playbook
The Equal Employment Opportunity Commission has rolled out the most dramatic shift in its enforcement posture in decades, narrowing some protections and targeting others, especially around disparate impact, diversity, equity and inclusion (DEI) and gender identity.
Also, with the confirmation of Commissioner Brittany Bull Panuccio in October 2025, the EEOC once again has a voting quorum. Her addition gives the new Republican majority the opportunity to rewrite guidance, revise strategic enforcement plans and launch higher-profile litigation aligned with the administration’s executive orders.
The new enforcement focus, initiated by a series of executive orders by President Trump, stands in contrast to established federal law, opening firms up to litigation by employees that runs counter to EEOC enforcement priorities.
DEI programs under a sharper lens
This year, the EEOC has trained its focus on what it describes as “unlawful DEI-motivated race and sex discrimination.” Programs that once were framed as inclusion efforts are now being scrutinized for potential reverse discrimination.
That includes:
- Mentorship, sponsorship and leadership programs limited to certain demographic groups.
- “Women only” or “underrepresented only” events and resource group activities.
- Hiring, promotion or internship pipelines that expressly prefer certain races or genders.
- Diversity metrics that function more like quotas than broad and aspirational goals.
Gender identity policies
EEOC Chair Andrea Lucas has directed agency lawyers to back away from gender identity litigation and to revisit harassment guidance that spells out protections for transgender employees.
Bathrooms, locker rooms and pronoun policies are likely flashpoints. Employers that wish to maintain strong protections for transgender and nonbinary workers may need to rely more heavily on state law, company values and reputational concerns as their guideposts.
These new policies put employers in a bind. Title VII’s ban on sex discrimination, which covers sexual orientation and gender identity, still stands and many states explicitly protect those groups.
Employers that scale back protections to comply with the new federal posture may reduce the chance of an EEOC probe but increase exposure to private lawsuits, state agency enforcement and reputational damage.
How employers can respond
Audit DEI and talent programs — Inventory all DEI initiatives, resource groups, mentorships and pipelines. Strip out eligibility rules tied to race, sex or national origin. Reframe programs around equal access and business needs.
Refresh public and internal statements — Review diversity pledges, representation goals and reporting. Avoid language that can be read as promising preferences. Emphasize fair processes, bias reduction and inclusion.
Map gender identity and facility policies to actual law — Chart federal, state and local requirements for every location. Where you maintain sex-specific facilities, consider options like single-user restrooms and clear procedures for handling complaints.
Boost religious accommodation practices — Ensure there is a clear, documented process for addressing religious objections, including objections to DEI content or pronoun expectations. Train managers to respond promptly and consistently.
Keep doing adverse impact reviews — Even if the EEOC is stepping back, continue to test hiring tools, promotion systems and layoff criteria for disproportionate effects on protected groups.
Invest in investigation capability — Make sure complaint procedures, investigation protocols and documentation would hold up under scrutiny from private plaintiffs, state agencies or the EEOC under its new priorities.
Takeaway
Finally, ensure that your business secures an employment practices liability policy, which can protect your firm from employee-initiated actions like discrimination or harassment complaints.
These policies can cover court costs, attorneys’ fees, discovery expenses, settlements or judgments and other related costs.
Construction Industry Risks Evolve, Creating Unique Challenges
As the construction industry continues to rebound from the recession, contractors face evolving risks that, left unchecked, can leave their operations exposed to new liabilities.
If you already operate a construction firm, you know that there is a labor shortage that has affected the makeup of your workforce, and that hiring entities are asking builders to take on more of the design function as well. Finally, construction firms must contend with cyber-security risks if they are using technology in their operations.
Accounting for these risks in your risk management strategy as well as ensuring you have the proper insurance coverage is key to protecting your firm from these evolving risks. Here’s a deep dive into three of those risks.
Lack of qualified workers
The construction industry has been wrestling with a labor shortage since before the COVID-19 pandemic, a shortage that’s been exacerbated by the immigration raids carried out by Immigration and Customs Enforcement in 2025.
Approximately 439,000 new workers are needed by the construction industry in 2025 to meet demand and potentially 499,000 in 2026, according to Associated Builders and Contractors.
Now, as home construction starts growing again, many contractors are having a hard time finding qualified workers, as well as project managers, engineers and estimators. That means workers are likely taking on greater workloads, which puts them at risk of injury or making mistakes. It also means longer project times.
Also, contractors have more inexperienced workers in their ranks who are not as aware of workplace safety and lack the experience to identify hazards, which puts them and others at risk of injury.
Professional liability risks
As more project owners want an all-in-one job with the lead contractors designing and building the project, those construction firms now face a new type of risk: professional liability.
The problem is that the typical contractor’s insurance policy doesn’t provide protection for any design work they may take on. If they do design a project, even partially, they’re not absolved of liability if they farm the actual construction work out to a subcontractor.
Courts have found that designers who cross over and perform traditional “builder activities” lose any limitation of liability traditionally enjoyed by design professionals. Builders who cross over and perform “design activities” assume responsibility for design deficiencies and can no longer push that liability to the design professional.
Cyber-security risks emerge
Like all industries, the construction sector has grown increasingly reliant on technology to get the job done. There are numerous solutions in the market that can help optimize workflows and save companies time and money.
While a construction firm is likely not going to keep clients’ credit card information on its website or databases (data that hackers drool over), they do keep confidential information on project designs as well as on employee records.
Recently, a contractor foreman stepped away from his work-issued laptop at a café and upon returning saw that it had been stolen. The laptop contained confidential company information and building information, like modeling construction and design methods.
More building contracts today include confidentiality agreements that require the contractor to be responsible for potential breaches associated with their activities, and that was the case in this instance.
While it was unclear if vital company secrets were exposed, the breach required that the owner’s 2,300 current and former employees be notified that their personal information may have been exposed.
Under the terms of their contract, the contractor was also obligated to pay for credit monitoring to all those employees for a year.
There was no indication that the information was ever exposed, but the notification costs and credit monitoring cost the company $25,000 out of pocket.
The takeaway
As contractors’ risks evolve, it’s important that you discuss any changes to your operations when we are helping you renew your insurance policies. We can help you discern if you need additional coverages like cyber and professional liability to ensure that these risks are covered.
Keeping it Safe, and Limiting Liability During Holidays
With year-end festivities about to begin, you should include safety into your holiday plans, be that if you are simply decorating the office or throwing a holiday/year-end party for your staff.
While you obviously want your staff to relax and have fun at your holiday party, you also want to make sure they get home safely and that nobody gets hurt or sick at your party.
Some of your safety priorities should be
- Liquor consumption,
- Safety on the premises of your party, and
- Food-borne illnesses.
Due to their infrequent nature, the liability risks of company-sponsored holiday events are often overlooked. To ensure the health and well-being of all who attend, it is important to be aware of any potential liability concerns that your company may face if the event doesn’t go exactly as planned.
Safety
While you want your staff to enjoy themselves, safety should still be your top priority during the holidays.
Keep in mind that if someone trips and injures themselves on an extension cord for your holiday lighting or other holiday decorations, it would be considered work-related and could possibly be subject to workers’ compensation. The same may hold true for injuries sustained at work parties as well. Consider the following:
- If you are holding a party at outside your office, inspect the venue first to make sure it meets your safety standards. Some things to keep an eye out for include: exits emergency lighting, and flooring that might prevent slips and falls, particularly if there is a chance of bad weather.
- Keep an eye on the weather forecast and if storms are looming on the date of your party. Consider the effects that weather may have on safe travel to and from the party.
- Do you need security?
- If party-goers are leaving at night, make sure nobody has to walk out alone in the dark to their car for safety reasons.
- Use food safety best practices like keeping hot foods warm and covered and not leaving perishable food out for too long to reduce the chance of someone getting a food-borne illness.
- Have an emergency plan in case someone is injured or needs medical assistance. Know where the closest hospital is and if anyone knows how to use a defibrillator or can perform CPR.
Risk and potential liabilities
You’ll want to minimize the chances of being sued for actions related to the event.
- Prior to the event, remind your employees that rules against harassment, discrimination and conduct apply at the event as well and infractions will be dealt with as you normally would.
- Monitor behavior at the event, as if people are drinking, they may act in ways that they normally wouldn’t. Take prompt action if any activity or behavior exceeds acceptable bounds.
- Make the event optional for your workers and let them know that it won’t reflect poorly on their performance evaluation, advancement potential or job security if they don’t’ attend. Emphasize this in all invitations and announcements should emphasize this point.
- Limit alcohol consumption.
- Avoiding activities or items such as mistletoe or inappropriate music that could lead to physical contact, unwanted social pressure or inappropriate conversation.
- Taking complaints that stem from the party seriously. As you would with any other incident, document, investigate and take appropriate action.
Alcohol
Some companies have recognized the liability exposure that alcohol represents and have chosen to hold holiday events free of beer, wine, or liquor. If it will be served, there are some important considerations that can help to limit potential problems:
- Hold the event at an off-site location and hire professional bartenders who have their own insurance and are certified for alcohol service. Speak with the vendor to determine what protocols it uses to keep from serving minors and others who are visibly intoxicated.
- Provide an array of choices of non-alcoholic beverages.
- Don’t have an open bar. Instead hand out a set amount of drink tickets to control consumption (two is usually a standard amount).
- Stop serving alcohol at least an hour before the event ends.
- Give a supervisor or manager the authority to cut off anyone who is intoxicated.
- Provide alternative transportation that may include free cab or Uber rides.
A word about insurance
Make sure you that any vendors you use, carry insurance. Insist on seeing the certificates of insurance with sufficient coverage and liability limits for:
- Catering firms,
- Bartending firms,
- Facilities, or
- Entertainers should be required to produce
When reviewing rental contracts, be sure to note any hold harmless or indemnity agreements that could release the vendor from liability and instead hold your company responsible for losses from situations over which you have no control.
Also, talk to us to make sure that your own insurance policies cover any mishaps that may occur at your company event.
Preventing Substance Abuse in the Workplace
Drug and alcohol use by employees on or off the job is a troublesome societal plague that has put many employers on the defensive.
Research by the U.S. Department of Labor shows that between 10% and 20% of the nation’s workers who die on the job test positive for alcohol or other drugs.
The same research shows that industries with the highest rates of drug use are the most physically dangerous and involve the operation of machinery, such as construction, mining, manufacturing and wholesale.
With this in mind, you need to know all of the tools available to you as an employer to ensure that you keep a strong drug- and alcohol-free workplace policy in place, while trying to minimize the effects of employees who are heavy users off the job.
An effective policy can reduce the risk of workplace injuries to an impaired employee as well as co-workers and anybody your company may come in contact with, particularly customers or vendors. The actions of one impaired person, or someone that uses heavily off the job, can have far-reaching effects and turn out to be a significant liability for your company.
The federal Occupational Health and Safety Administrations as well as state-run OSHAsl offer employers help in sorting out the complexities of putting together an effective drug- and alcohol-free workplace policy.
Federal OSHA outlines five components it considers necessary for a drug-free workplace: a policy, supervisor training, employee education, employee assistance and drug testing.
Drug testing, it says, “must be reasonable and take into consideration employee rights to privacy.”
The federal agency has guidelines available to help resource-challenged small businesses formulate a policy aimed at a drug- and alcohol-free workplace. They include:
- Drug-Free Workplace Advisor Program Builder. For employers needing to develop a policy from scratch, this guides them through the various components of a comprehensive written drug-free workplace policy. It then generates a policy based on an employer’s specific needs.
- Substance Abuse Information Database (SAID). This includes sample drug-free workplace policies, surveys, research reports, training and educational materials and regulatory information.
- Resource directories. These contain current lists of national, state and local resources, including summaries of state laws on workplace-related substance abuse, community organizations that help make businesses drug-free, and help lines for those who have a drug problem.
- Training and educational materials. These include presentations, articles, fact sheets and posters to help employers provide workplace drug and alcohol education.
- Workplace Frequently Asked Questions. These are available free of charge.
More detailed information for each of the above guidelines is online at: www.osha.gov/SLTC/substanceabuse/index.html
The New Zealand example
One good approach to drug and alcohol policies comes from New Zealand. Its OSHA – in simple, practical language – advises employers in that country to:
- Formulate rules, agreed to by all parties, which apply the same for everyone: employees, contractors and employers.
- Write the policy clearly and make it available to all in the workplace.
- Describe steps needed to ensure a drug- and alcohol-free workplace.
- Enforce the rules “consistently and fairly.”
The policy, says New Zealand OSHA, should aim to avoid worker drug or alcohol impairment without discriminating against or punishing employees.
Once formulated, the agency adds, the policy should be part of the company’s official health and management practices in recruitment and training, integrated into its human resources department and widely circulated throughout the business.
How to Rebuild on Time After a Commercial Property Claim
For businesses that suffer property damage, getting repairs or rebuilding completed on time and within budget is becoming an uphill battle.
A mix of inflation, supply chain challenges leading to material shortages, a tight construction labor market and the inherent complexity of commercial construction have pushed costs higher and stretched timelines longer. This can leave a company unable to operate or producing revenue at only partial capacity while they wait.
As the problem worsens, it’s important that property owners have a strategy to jump-start repairs through planning and by establishing a network of contractors in advance.
Why repairs are taking longer and costing more
Multiple forces are converging to make commercial reconstruction increasingly difficult to complete efficiently:
- Persistent inflation — Verisk reports that commercial reconstruction costs rose 5.7% year over year through the second quarter of 2025, with concrete prices jumping by more than 9%.
- Supply chain disruptions — Tariffs on imported materials, supply chain issues and transportation delays are further inflating prices and lengthening delivery times. It’s not uncommon for a project to be delayed for months because of part shortages.
- Labor shortages — Nearly 900,000 skilled trade positions remain unfilled nationwide, and many contractors are struggling to meet demand for work.
- Complex project requirements — Commercial construction is far more intricate than residential work. Unlike a home, a commercial property may include multiple systems such as HVAC, fire suppression, medical gases, industrial machinery or commercial kitchens, all of which must meet strict codes and specialized standards.
- Local contractor limitations — Contractors accustomed to routine maintenance may lack the expertise or workforce to manage large-scale reconstruction, leading to delays as businesses search for more capable contractors.
The risk multiplies after natural disasters
After natural disasters, these problems are compounded. Local labor, materials and equipment become scarce almost immediately after a disaster, as affected businesses vie for the same resources.
In these situations, unprepared property owners can end up paying steep premiums for scarce labor or settling for subpar work just to reopen sooner. Insurers face their own exposure as delayed repairs prolong business interruption claims and push overall loss costs higher.
Steps property owners can take
While these challenges are significant, property owners can take practical steps to mitigate repair delays and inflated costs when filing commercial property claims.
Build a broader, pre-vetted contractor network — Relying solely on local contractors can backfire after a catastrophe.
Developing relationships with a wider network of pre-qualified commercial restoration firms ensures capacity and capability when demand spikes. A vetted network also allows property owners and insurers to match each job to the right expertise rather than defaulting to whoever is available.
Use time-and-material pricing models — Traditional fixed-price contracts can create inefficiencies and inflated costs when project scopes shift. A time-and-material model charges based on actual labor hours and materials used, which in turn offers transparency and flexibility.
This approach also allows for detailed tracking and frequent review of expenses so both owner and contractor understand exactly where costs are going. According to Verisk, smarter review models based on time-and-material data can cut inflated commercial repair bills by 20% or more.
Establish pre-loss agreements — Pre-loss agreements set expectations in advance by outlining pricing frameworks, response times and emergency protocols before a loss occurs.
By having these contracts in place, property owners can mobilize resources immediately after a loss without wasting time negotiating terms. This proactive planning is particularly valuable for multi-site operations or organizations located in catastrophe-prone regions.
Emphasize proactive project management — Active oversight keeps contractors accountable, coordinates multiple trades and helps ensure the contractor stays on schedule. This requires someone on the team to regularly check on work progress.
Whether through an internal facilities team, a dedicated project manager or virtual monitoring tools, close supervision helps ensure the repair process stays on course and minimizes costly delays.
Compliance Alert: New Law Expands Protected Paid, Unpaid Leave
California employers have new compliance challenges because of a law that further broadens the circumstances under which employees can take protected paid and unpaid leave.
AB 406, which took effect Oct. 1, 2025, expands on last year’s revisions to the state’s paid sick and safe time and crime-victim leave laws, adding new categories of protected absences that cross multiple statutes — and increasing the complexity of managing employee leave.
Employers will have to once again revise their HR policies to ensure they comply with the new law as some law firms warn that AB 406 affects a number of intersecting statutes.
What AB 406 does
AB 406 amends both the state’s paid sick leave law — the Healthy Workplaces, Healthy Families Act (HWHFA) — and Government Code section 12945.8, which governs unpaid job-protected leave.
Effective Oct. 1 — The new law adds two new reasons for which employees can take protected time off:
- To appear in court as a witness to comply with a subpoena or court order, including if the employee is a crime victim.
- To serve on an inquest jury or trial jury.
Effective Jan. 1, 2026 — The law also extends job-protected leave for employees or their family members who are victims of certain serious crimes (the law cites 14 of them). Covered workers may take leave to attend court or administrative proceedings related to those crimes, such as arraignments, pleas, sentencing hearings, parole hearings or other proceedings where victims’ rights are at issue.
For this purpose, “victim” is defined broadly to include anyone who suffers direct or threatened physical, psychological or financial harm as a result of serious felonies such as domestic violence, sexual assault, felony stalking and DUI causing injury.
Overlapping leave laws complicate compliance
The new rules expand and interlink several different statutes — the HWHFA, the California Family Rights Act and the Fair Employment and Housing Act — making it more difficult for HR departments to determine which law applies to each situation.
For example, an employee attending a sentencing hearing on behalf of a family member could qualify for leave under both the paid sick and safe time law and CFRA if that family member also has a serious health condition. HR teams must carefully review each request to ensure the proper leave type is designated and tracked.
Notice, documentation requirements
The Civil Rights Department has issued a new mandatory workplace notice titled “Survivors of Violence and Family Members of Victims – Right to Leave and Accommodations.” Employers must post and distribute this notice and train managers on confidentiality and retaliation protections.
The takeaway
With some provisions already in effect and others coming Jan. 1, 2026, employers should:
- Update employee handbooks and leave policies to reflect AB 406’s new covered uses.
- Train HR staff and managers to identify overlapping leave rights and apply the proper designations.
- Post the new CRD notice and review confidentiality and anti-retaliation procedures.
- Audit HR systems and time-off codes to ensure new leave categories are captured.
- Coordinate state and local leave requirements to avoid conflicts.
Finally, discuss any planned changes with your legal counsel to ensure compliance with the new law.
New AI-in-Hiring Rules Are in Effect: What You Need to Know
Starting Oct. 1, 2025, any California employer that uses artificial intelligence and other automated tools in recruiting, hiring, promotion and related human resources decisions will have to ensure that the tools don’t discriminate against protected classes.
The new regulations, promulgated by California’s Civil Rights Department, cover any “automated decision system” (ADS) which the rules broadly define to include any computer-based process that makes or influences employment decisions, such as:
- Artificial intelligence,
- Machine learning,
- Algorithms,
- Statistics, and
- Other data-processing techniques.
If your firm uses AI or another data-driven system in hiring, you’ll want to beef up record-keeping and set testing procedures to ensure that the tools you use comply with the new regulations.
What counts as an “automated-decision system”
Examples of systems that are covered by the new regulations include:
- Résumé screeners — These may favor applicants who use certain wording, which can disadvantage older workers or those from different cultural or educational backgrounds.
- Targeted job-ad delivery — Tools may push job ads to preferred genders, age groups, races and other protected classes.
- Puzzle or game-style assessments — These tools may screen out people with certain physical or neurological conditions.
- Voice and facial analysis tools — Tools that assess “enthusiasm” or “communication style” may produce biased results against applicants with disabilities, speech differences or accents.
Basics of the new rules
Discrimination risk — It is unlawful to use an ADS or other selection criteria that discriminate based on any protected characteristic such as race, gender and ethnicity. Crucially, an employer can be liable even without intent if the ADS causes an adverse disparate impact on a protected class.
Anti-bias testing — Employers are required to perform anti-bias testing of their automated systems. In any investigation or lawsuit, regulators and courts may look at six factors to determine whether an employer took reasonable steps to avoid discrimination:
- Quality of the testing
- Efficacy (how well it detects bias)
- Recency (how current it is)
- Scope (which systems or data were tested)
- Results of the testing or due diligence
- The employer’s response to those results (what was changed or fixed afterward)
Failing to conduct or document bias testing could weigh against an employer in a discrimination case.
Record-keeping — The rule requires employers to keep ADS-related records for four years.
What you can do
If you use an ADS system in your personnel decisions, focus on the following to comply with the new rules:
Tracking — Track your ADS system’s involvement in recruiting, hiring, promotion, training selection, performance screens or advertising. Include vendor tools and “off-the-shelf” filters.
Testing — Build a defensible bias-testing program and document the six factors that regulators will look at:
- Quality,
- Efficacy,
- Recency,
- Scope,
- Results, and
- Your response.
Planning — Establish a plan to regularly test your ADS systems for bias-tainted decisions. Most importantly, if you detect deficiencies, document the steps you took to address the problems.
The takeaway
One of the keys to a successful defense is showing you have taken steps to remedy issues with tools that you use in employment decisions. That means being able to show that you have ensured your data-driven personnel tools do not discriminate.
As a side note, employers should expect more AI-related legislation in the years to come as more companies use it in their day-to-day operations.