California employers that lay off large groups of workers because of artificial intelligence will soon have to say so in writing. Gov. Gavin Newsom signed Senate Bill 951 on Sept. 30, and the new rules take effect Jan. 1, 2027.

The law amends the California Worker Adjustment and Retraining Notification Act, known as Cal/WARN, which already requires 60 days' notice before a plant closing, a relocation of 100 miles or more, or a mass layoff of 50 or more workers at a site that has employed at least 75 people in the past year. For Bay Area workers, where tech companies have repeatedly cut staff while investing heavily in AI, the change means layoff notices could start spelling out the role automation played.

What the notices must now include

When a layoff, relocation or closure is caused "in whole or in substantial part" by AI or other automated technology, the employer's notice must add four things:

  • How many of the layoffs are attributable to AI or automation, with the job classifications and work locations involved.
  • Which job functions done by the affected workers will be automated.
  • The category or type of AI system or other technology responsible.
  • The sentence "This notice is for a technology displacement" at the top of the notice.

The state Employment Development Department will post summaries of these notices online and publish a quarterly statewide tally of reported technology displacements. By Jan. 1, 2028, the department must also report to the Legislature on how AI is affecting hiring across industries and regions, including whether employers that permanently stop hiring for certain jobs because of AI should face a notice requirement of their own.

What stays the same, and what is unclear

The law does not change who is covered, the 60-day notice period, or existing penalties, which include back pay and benefits for affected workers and civil penalties of up to $500 a day. It comes almost exactly a year after SB 617, which expanded Cal/WARN notice contents starting this year.

Employment lawyers note open questions. The law defines artificial intelligence broadly but does not define "other automated technology" or say exactly when a layoff is caused "in substantial part" by it, which matters when only some positions in a larger cut are being automated. Firms advising employers are recommending updated notice templates and careful documentation of why each position is being eliminated.