Labor Relations
SB 951 (2026): Notices Must Disclose AI-Driven Mass Layoffs
Updated
Senate Bill 951, authored by Senator Reyes, amends the California Worker Adjustment and Retraining Notification Act (Cal/WARN Act) to require additional disclosures when a mass layoff, relocation, or termination is caused in whole or substantial part by artificial intelligence or other automated technology. It also directs a state agency to study AI’s effects on hiring. The law takes effect January 1, 2027.
Background
The Cal/WARN Act, codified beginning at Labor Code section 1400, requires an employer to give 60 days’ written notice before a mass layoff, relocation, or termination at a covered establishment. Notice goes to the affected employees, the Employment Development Department, the local workforce development board, and the chief elected officials of the affected city and county governments.
A covered establishment is a facility that employs, or has employed in the prior 12 months, 75 or more persons, and a mass layoff reaches 50 or more employees in a 30-day period. Existing law makes an employer that fails to give required notice subject to a civil penalty of up to $500 for each day of the violation.
Senate Bill 951 amends Labor Code sections 1400.5 and 1401 and adds section 1402.7. It responds to the growing role of AI and automated technology in employment decisions by adding reporting that identifies when those tools drive job losses.
What the Law Changes
Labor Code section 1400.5 now defines “artificial intelligence” as an engineered or machine-based system that varies in its autonomy and can infer from its inputs how to generate outputs that influence physical or virtual environments. The defined terms otherwise carry forward, including the 75-person covered establishment and 50-employee mass layoff thresholds.
Under amended Labor Code section 1401, an employer giving notice of a mass layoff, relocation, or termination caused in whole or substantial part by an AI system or other automated technology must add specified information to the notice. That includes the number, classification or occupation, and work location of the affected layoffs; the job functions that will be automated; and the specific category or type of AI or automating technology involved.
The notice must also carry the statement “This notice is for a technology displacement” at the top. The Employment Development Department must publish a summary of these notices on its website and post a quarterly statewide summary of reported technology displacements.
When AI or other automated technology causes a covered mass layoff, relocation, or termination in whole or substantial part, the Cal/WARN notice must disclose the affected positions, the automated job functions, and the type of technology involved, and must be labeled as a technology displacement.
State Report on AI and Hiring
New Labor Code section 1402.7 directs the Employment Development Department to submit a report to the Legislature, on or before January 1, 2028, on artificial intelligence’s effects on business hiring practices, including its impact on industries and occupations at the state and regional level.
The report may address a possible public-notice requirement for “technological cessation in hiring,” meaning the permanent ending of hiring or contracting for an occupation caused in whole or part by AI or other automated technology. It may also summarize hiring trends by AI exposure and existing research. Section 1402.7 remains in effect only until January 1, 2029, when it is repealed.
What This Means for You
This law adds AI-specific disclosures to Cal/WARN notices when automated technology causes a covered mass layoff, relocation, or termination, and it directs the state to study AI’s effect on hiring. It touches larger employers at covered establishments and the workers affected by technology-driven job losses.
I write these summaries as general information about developments in California employment law. They are not legal advice and don’t create a mediator–client relationship. For guidance on a specific matter, consult a qualified attorney.