California employers that use AI to replace or automate jobs will face a new disclosure requirement when those changes lead to a mass layoff, relocation, or closure. SB 951, signed September 30, 2026 as Chapter 860, Statutes of 2026, amends the California Worker Adjustment and Retraining Notification Act (Cal/WARN) to require employers to say so in the notice, in specific terms, and the EDD will make summaries of those notices public.

What SB 951 Does and When It Takes Effect

SB 951 amends Labor Code Sections 1400.5 and 1401 and adds Section 1402.7. It does not create a new notice. It adds required content to the Cal/WARN notice employers already give. The bill contains no separate operative date, so under the general rule it takes effect January 1, 2027.

Who Must Comply

SB 951 applies to employers that already must give Cal/WARN notice. Under existing law, that means an employer that owns and operates a covered establishment, which is an industrial or commercial facility that employs, or has employed within the preceding 12 months, 75 or more persons. A parent corporation is an employer as to any covered establishment directly owned and operated by its subsidiary.

Cal/WARN notice is required for:

• A mass layoff: a layoff of 50 or more employees at a covered establishment during any 30-day period.
• A relocation: removing all or substantially all operations to a location 100 miles or more away.
• A termination: the cessation or substantial cessation of operations at the covered establishment.

The existing exceptions remain, including physical calamity or act of war, certain project-based work in specified industries, and seasonal employment.

When the AI Disclosure Applies

The added disclosure applies when a mass layoff, relocation, or termination is caused in whole or in substantial part by an AI system or other automated technology replacing or automating employment positions. “Artificial intelligence” is defined as an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from its input how to generate outputs that can influence physical or virtual environments.

The statute does not define “in whole or in substantial part,” and I did not find a definition of “other automated technology.” Employers should not assume that a layoff where AI was one of several factors falls outside the requirement.

What the Notice Must Include

In addition to everything Cal/WARN already requires, the notice must include:

• The number, classification or occupation, and work location of the layoffs that are substantially due to replacement or automation by AI or other automated technology.
• The job functions performed by those replaced workers that will be automated.
• The specific category or type of AI system or other automating technology that substantially resulted in the technological displacement.
• The statement “This notice is for a technology displacement” at the top of the notice.

The notice must still go out 60 days before the order takes effect to the affected employees, the EDD, the local workforce development board, and the chief elected official of each city and county where the layoff, relocation, or termination occurs. It must also continue to include the other content Section 1401 requires, such as the federal WARN elements, rapid response coordination information, the CalFresh description, and a contact email and telephone number for the employer.

What the EDD Will Publish

As part of its regular Cal/WARN data reporting, the EDD must publish a summary of the technology displacement notices it receives on its website. It must also post a quarterly statewide summary of the technology displacements reported. Employers should assume that the information in their notice will become public and searchable.

The EDD Report on AI and Hiring

Section 1402.7 requires the EDD to submit a report to the Legislature on or before January 1, 2028, on AI's effects on business hiring practices, including its impact on industries and occupations at the state and regional level. The report may include recommendations regarding a public notice requirement for “technological cessation in hiring,” which the statute defines as the permanent ending of hiring or contracting for a particular occupation or position caused in whole or in part by an employer's use of AI or automated technology. This report places no obligations on employers today, but it signals where the Legislature may go next. The section is repealed on January 1, 2029.

Penalties and Enforcement

SB 951 does not add a separate penalty. Existing Cal/WARN law subjects an employer that fails to give required notice to a civil penalty of up to $500 for each day of the violation. The statute does not address whether a notice that omits the AI-specific content counts as a failure to give required notice, so employers should treat incomplete AI disclosures as a source of exposure.

Practical Risks Beyond the Penalty

The technology displacement notice is a public statement about why jobs are being eliminated. Language in it about causation may be read by affected employees, the press, regulators, and plaintiffs' lawyers. Employers should have counsel review the notice before it goes out and make sure the stated cause is accurate and consistent with the internal business record, neither overstating nor understating the role of technology.

How SB 951 Relates to Other New AI Employment Laws

California enacted several AI-related employment laws on September 30, 2026. Three that affect most employers address different things:

• SB 951 (Chapter 860) governs layoff notices and public disclosure when AI or automation drives a mass layoff, relocation, or closure.
• SB 947 (Chapter 859) governs how employers may use automated decision systems in discipline and termination decisions, including a ban on relying solely on an ADS, human corroboration, written notices, and employee data requests, beginning July 1, 2027. 
• AB 1883 (Chapter 853) governs workplace surveillance. It bars employers from using AI-enabled surveillance tools to recognize or predict an employee's emotional state or to collect neural data, with exceptions for safety and certain federal defense work.

An employer that uses AI to select employees for a reduction in force may be affected by more than one of these laws.

Common Mistakes

• Assuming the law only applies when AI is the sole cause. The standard is “in whole or in substantial part.”
• Treating the AI disclosure as a separate filing. It is added to the Cal/WARN notice, which has its own 60-day timing.
• Describing the technology vaguely. The statute requires the specific category or type of system.
• Forgetting the header. The notice must carry the statement “This notice is for a technology displacement” at the top.
• Overlooking the public posting. The EDD will publish summaries, so the notice needs to be consistent with what the company says elsewhere.
• Assuming a small workforce is exempt without checking. Cal/WARN coverage turns on 75 or more persons employed at the establishment within the preceding 12 months, and the count can include people who left during that period.

SB 951 Compliance Checklist

• Confirm whether each California establishment is a covered establishment under Cal/WARN.
• Inventory AI systems and automated tools that replace or automate job functions, and identify which positions they affect.
• Add technology displacement analysis to your reduction-in-force planning, including a written assessment of whether AI or automation is a whole or substantial cause.
• Build a notice template that includes the four AI-specific items and the required statement at the top.
• Document the specific category or type of technology in terms the notice can state accurately.
• Establish counsel review of the causation language before any notice is issued.
• Coordinate the notice with your communications plan, because the EDD will publish summaries.
• Calendar the 60-day notice period for any reduction in force you expect to order in 2027.
• Review related obligations under SB 947 and AB 1883.
• Monitor the EDD's website for the summaries and guidance it publishes.

Frequently Asked Questions

When does SB 951 take effect?
The bill contains no separate operative date, so it takes effect January 1, 2027 under the general rule.

Who is covered?
Employers already subject to Cal/WARN, meaning those that own and operate a covered establishment with 75 or more persons employed within the preceding 12 months.

Does it apply to every layoff?
No. Cal/WARN applies to mass layoffs of 50 or more employees in a 30-day period, relocations of 100 miles or more, and terminations of operations. The AI disclosure applies only when the event is caused in whole or in substantial part by AI or other automated technology.

What does “in whole or in substantial part” mean?
The statute does not define it. Employers should treat AI as a substantial cause whenever it was a meaningful reason for the decision, even if other factors contributed.

What must the notice say?
It must state the number, classification or occupation, and work location of the affected positions, the job functions that will be automated, and the specific category or type of technology. It must begin with the statement “This notice is for a technology displacement.”

Will the notice be public?
The EDD must publish a summary of the technology displacement notices it receives and a quarterly statewide summary of technology displacements.

What are the penalties?
SB 951 adds none. Existing Cal/WARN law provides a civil penalty of up to $500 for each day of an employer's violation for failing to give required notice.

Does SB 951 require employers to disclose when they stop hiring because of AI?
Not today. It requires the EDD to report to the Legislature by January 1, 2028, and the report may recommend a notice requirement for technological cessation in hiring.

What You Should Do Now

SB 951 turns a decision to replace workers with AI into a public record. Employers that plan reductions in force in 2027 should decide now how they will determine and document causation, who will draft the technology disclosures, and how counsel will review them before any notice goes out.

If you are considering a layoff, restructuring, or automation project, I can help you prepare a compliant Cal/WARN notice and review related obligations. Schedule a consultation today.

Schedule a Consultation: https://www.chukwuekelaw.com/contact-us

Disclaimer: This post is for informational purposes only and does not constitute legal advice or create an attorney-client relationship. The information in this post reflects the law as understood at the time of publication. Statutory details, including specific requirements, penalties, and coverage thresholds, should be verified against the enacted text and any applicable agency guidance.