What California Senate Bill 1137 Means for Employers (and Why It’s Not Just Another Compliance Checklist) 

California is no stranger to bold employment legislation, and Governor Gavin Newsom has added another one to the books. Senate Bill (SB) 1137 — signed into law in 2024 — takes workplace retaliation and employee rights seriously. As in, really seriously. 

Effective Date: SB 1137 went into effect on January 1, 2025. 

So, what’s this new law about? What does it mean for California employers? And how can your business stay compliant without losing sleep (or your sense of humor)? At Journey Payroll & HR, we’ve got the breakdown you need — minus the legal jargon overload. 

What Is SB 1137? 

SB 1137 ramps up the consequences for employers who retaliate against employees for engaging in legally protected activities, such as reporting labor law violations, wage theft, or unsafe working conditions. 

Before this bill, retaliation was already illegal — but enforcement often lacked teeth. Now? Employers can face criminal penalties, including potential jail time, for certain types of retaliation. 

Yes, you read that right: jail time. 

If you’re thinking, “Yikes, that escalated quickly,” you’re not wrong. 

Key Details of SB 1137 

Here’s what California businesses need to know: 

• Criminal Consequences: Employers can now be charged with a misdemeanor for retaliating against employees. Penalties can include up to $10,000 in fines and up to 6 months in jail. 
• Focus on Whistleblowers: The law emphasizes protection for employees who report labor code violations, including wage theft, unsafe conditions, or harassment. 
• No Business Size Exemption: Whether you’re a five-person startup or a 500-person corporation, this applies to everyone. 
• Enforcement: The Labor Commissioner now has the authority to prosecute retaliation cases criminally — giving real weight to employee protections. 

What Does “Retaliation” Look Like? 

It’s not always as obvious as firing someone. Retaliation can include: 

• Cutting hours or demoting someone after they speak up
• Moving an employee to a less desirable shift or location 
• Creating a hostile work environment in response to a complaint 
• Threatening immigration consequences 

Even if an employer thinks it’s just a coincidence — if the timing looks fishy, it could spell trouble.                                                                                                                                                                                                                                                          

How Employers Can Stay Compliant 

Don’t panic. But do plan. Here’s how to protect your business and foster a fair, transparent workplace: 

1. Review Your Policies: Make sure your anti-retaliation policies are current and clearly communicated.
2. Train Your Managers: They’re often the frontline when retaliation happens — or when it can be prevented.
3. Document Everything: Clear, consistent documentation protects you and your employees.
4. Create Safe Reporting Channels: Employees should feel safe speaking up without fear of consequences.
5. Partner with a Payroll & HR Expert: (Ahem… Hi, that’s us!) 

Why This Matters (More Than Just Avoiding Jail) 

At its core, SB 1137 is about fairness and accountability. California wants to ensure that employees can report wrongdoings without fear, and that businesses operate with integrity. A strong, respectful workplace culture isn’t just good ethics — it’s good business. And hey — staying compliant doesn’t have to be scary. With Journey Payroll & HR on your side, you’ll always have a teammate who’s ready to help.