California recently enacted a play-or-pay employer mandate (known as SB 2) to expand health insurance coverage to a portion of the state's working uninsured population. Implementing SB 2 will change the behavior of employers affected by the legislation, with consequences for California's labor market and uninsured citizens. This paper applies findings from the literature and an economic analysis to California data to estimate the potential reduction in wages, quantify the dispersion of risk across employers, and discuss other employment effects. These employer responses will reduce the number of uninsured people in California who gain eligibility for health coverage under SB 2.