California employers must disclose AI-driven job cuts under new law

California employers will have to provide detailed information when artificial intelligence or automated technology contributes to mass layoffs, under a new law signed on 30 September 2026.

Senate Bill 951 amends California's Worker Adjustment and Retraining Act (Cal/WARN Act), requiring employers to provide additional information in WARN notices when a mass layoff, relocation or termination of operations is caused "in whole or in substantial part" by AI or automated technology.

The requirements apply to employers with a workforce of 75 or more and cover mass layoffs involving 50 or more workers, according to a report by HRD.

AI displacement details

Under SB 951, employers must identify the number of workers being displaced, their job classifications and work locations when the job losses are linked to AI or automation.

They must also describe the job functions being automated and identify the type of AI system or technology responsible for the displacement.

The WARN notice must prominently state: "This notice is for a technology displacement".

The new requirements come alongside existing Cal/WARN obligations, including providing 60 days' written notice to affected employees, the Employment Development Department (EDD), local workforce development boards and local elected officials.

EDD to track AI job losses

The legislation also introduces greater public reporting around technology-related displacement.

The EDD will be required to publish summaries of AI displacement notices on its website and issue quarterly statewide reports tracking technological displacements.

The move creates a formal mechanism for tracking how AI and automation are affecting employment across California.

Hiring freeze linked to AI

SB 951 also introduces the term "technological cessation in hiring", covering situations where an employer permanently stops hiring for a particular role because of AI or automation.

The provision applies even when employees continue to hold the role and the organisation's overall headcount does not decline.

By 1 January 2028, the EDD must submit a report to the California Legislature examining how AI is changing hiring practices across industries and regions.

The report may also recommend whether employers should be required to publicly disclose when they stop hiring for a particular role because the work has been taken over by technology. The reporting requirement is due to expire on 1 January 2029.

New compliance layer for HR

Employers already face penalties of up to $500 per day for violations of Cal/WARN notice requirements. SB 951 does not alter the penalty amount, but expands the information employers must provide when technology is a factor in job displacement.

For HR teams, the law adds a specific compliance step to workforce restructuring involving AI. 

Where technology contributes substantially to layoffs, employers will need to identify not only who is being displaced, but also what work is being automated and what technology is responsible.

The legislation also gives regulators greater visibility into AI-related workforce changes, potentially creating a clearer picture of how automation is reshaping both layoffs and hiring decisions across California.

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