Governor Gavin Newsom signed Senate Bill 951 updating California’s workforce disclosure laws with new Cal/WARN Act requirements. SB 951 mandates disclosures for mass layoffs supported by artificial intelligence or automated systems. Specifically, it requires employers to disclose automated workforce reductions and tasks by publishing public summaries. This mandate takes effect January 1, 2027.
What Does SB 951 Do?
SB 951 amends Labor Code sections 1400.5, 1401 and 1402.7 governing the Cal/WARN framework, focusing on employment displacement caused by AI or other automated technology. Future Cal/WARN notices of a mass layoff, relocation, or termination where AI or other automated technology caused the replacement or automation of the positions must include additional information. In addition, the EDD must publish a summary of “technological” displacements as part of its regular Cal/WARN data reporting which appears on its website. The EDD is also tasked to submit a report to the Legislature by January 1, 2028 on AI’s effects on business hiring practices.
Who is Covered?
Cal/WARN’s application to “covered establishments,” - industrial or commercial facilities with 75 or more current employees or employees within the previous 12 months remains unchanged. An “employer” includes any person who directly or indirectly owns and operates a covered establishment, including a parent corporation for covered establishments directly owned and operated by a subsidiary. “Employee” means a person employed for at least six months of the 12 months preceding the date notice is required.
New Notice Requirements and Public Reporting
If the mass layoff, relocation, or termination is caused in whole or in substantial part by AI or other automated technology, the notice must include: the number, classification or occupation, and work location of layoffs caused by automation; the job functions that will be automated; and the specific category or type of AI or other automating technology that will be used by the employer. The notice must also include the statement “This notice is for a technology displacement” at the top. These AI-related elements are in addition to existing Cal/WARN requirements, such as rapid response coordination content and contact information, a functioning employer email and phone number, and a description and link/helpline for CalFresh.
Interaction With Existing Cal/WARN Rules
Existing Cal/WARN notice requirements remain unchanged.
Key Takeaways for Employers
- New Triggered Disclosures: If AI or other automated technology substantially causes the reduction of employees to trigger a Cal/WARN event, employers must provide detailed, technology‑specific disclosures and add a “technology displacement” header.
- Public Reporting: The EDD will publish summaries of Technology Displacement notices online and issue quarterly summaries of technological displacements that will be integrated into the EDD’s Cal/WARN data reporting.
- Broader Policy Review Coming: The EDD must deliver an AI‑and‑hiring report by January 1, 2028 to the legislature, which will likely be used to inform future legislation tied to technological in the workplace.
- Companies Should Prepare Now: Asking ChatGPT to draft layoff notices may be evidence that might be used against an employer accused of giving inadequate Cal/WARN notice. Moreover, such requests are likely discoverable in future litigation. Employers should consult with counsel about plans to invest in automated technology to be prepared for any reduction in force and the 2027 Cal/WARN notice requirements.
For questions regarding Cal/WARN or WARN compliance or to update your notice templates and protocols, contact Mariam El Hasan or Dan M. Forman.
