California Will Require AI Layoff Disclosure Starting January 2027

California employers will have to add four new fields to their layoff notices whenever AI or other automation drives a mass layoff, under SB 951 signed by Governor Gavin Newsom. The law takes effect January 1, 2027, and layers an AI-disclosure requirement onto the state's existing 60-day WARN Act notice.

What triggers the new disclosures?

The WARN Act thresholds are unchanged: establishments with 75 or more employees, and layoffs of 50 or more people within a 30-day period. The 60-day clock is also unchanged. What is new is the trigger. Any mass layoff, relocation, or termination caused "in whole or substantial part" by an AI system or other automated technology that replaces or automates employment positions now requires four additional disclosures:

• The statement "This notice is for a technology displacement," which must appear at the top of the notice.
• The number, classification or occupation, and work location of positions displaced by AI or automation.
• The job functions performed by the replaced workers that will be automated.
• The specific category or type of AI system or other automating technology that drove the displacement.

The law also writes a definition of "artificial intelligence" into the WARN Act, covering "any engineered or machine-based system that varies in its level of autonomy and can infer from its inputs how to generate outputs that influence physical or virtual environments." That language is broad enough to capture a wide swath of ordinary workforce software.

What remains unclear?

The statute gives employers no test for when a layoff is caused "in substantial part" by automation. Most reductions in force have multiple causes at once. A company that consolidates a support function after deploying a new platform is making a decision driven partly by technology and partly by cost. Whether that combination crosses the disclosure line is a judgment call that has to be made in real time, under a 60-day clock, knowing the answer becomes a public document.

The consequences of an incorrect disclosure are also unresolved. The WARN Act's back pay and civil penalty provisions were left untouched and cross-reference a different subdivision than the one SB 951 creates, leaving room for clean-up guidance in the coming months.

Notices will be public

SB 951 directs the Employment Development Department (EDD) to publish a summary of technology-displacement notices on its website as part of its regular WARN Act reporting, and to post a quarterly statewide summary of technology displacements. California already posts WARN notices publicly, but a searchable, state-maintained tally of which employers are replacing which jobs with automation could draw heightened scrutiny from unions, plaintiffs' attorneys, and the press.

What employers should do before January 2027

Five steps are worth taking now:

1. Document causation as decisions are made. Capture the business case for any workforce reduction contemporaneously, including the non-technology drivers, rather than reconstructing the rationale after a notice is challenged.
2. Rebuild the WARN notice template. Add the four new elements and put the technology-displacement statement at the top where the statute requires it.
3. Map AI tools to the roles they touch. Inventories required by other California AI laws overlap directly with this work.
4. Loop in legal, communications, and investor relations before filing. The notice becomes public and quotable, and should align with what the company says elsewhere.
5. Track the EDD study. The law directs the EDD to report to the Legislature by January 1, 2028, on how AI is affecting hiring across industries and occupations, and may recommend new notice requirements for employers that permanently stop hiring for a role because of automation, even when nobody is laid off. This is the second California study of AI-driven job loss in under two years, following Governor Newsom's executive order directing state agencies to do the same.

For workers, the practical effect is more information, not new severance rights. For employers, it is a new public record on automation-driven displacement, with definitional edges that will be tested in court or through agency guidance before the first quarterly EDD summary lands.