The Future of AI and California’s Workforce
Let’s Talk… The Future of AI and Its Potential Impacts on California’s Workforce
With the rise in the use of AI, new policies and regulations will help shape its effect on California’s economy and jobs market
October 28, 2026
The growing presence and integration of AI into our daily life raises major concerns for a lot of people, including myself. My concerns largely come from the uncertainty about how this new technology will ultimately affect my and my family’s future. I’m generally an optimistic person, but I try to ground myself and my choices in the facts and data. And that is one of the biggest challenges with AI: there’s not a lot of solid information out there, only lots of speculation, about its potential impacts, especially on our economy and jobs market.
Fortunately though, California is leading the national policy frontier by beginning to lean into transparency and data collection requirements. At the federal level, there is a law called the Worker Adjustment and Retraining Notification (WARN) Act, which is designed to provide employees and the public notice when there is a mass layoff event. At the state level, California has its own version of the WARN Act that applies to a broader set of employers and provides for even greater transparency. At a high level, the law requires an employer with 75 or more employees in a given location to provide notice to the state/local government and to its employees 60 days before a mass layoff or relocation event, including whether there are any plans to provide services to assist the impacted employees.
What’s new and helpful in the AI era is that the CA WARN Act was updated this year by SB 951 (Reyes), with changes that will take effect January 1, 2027. The updated law will provide a set of definitions, including a definition of what AI is. Now, whenever there is a mass layoff, relocation or termination event, in addition to notice, it will also require employers to include data such as the occupation, type of work that was replaced by AI, and the number of employees that were affected by the AI-driven displacement event. The state’s Employment Development Department (EDD) is also now tasked with releasing a public report by January 1, 2028 on AI’s impacts on hiring and other relevant aspects of employment.
This revised CA WARN Act provides a good starting point for gathering the information policy makers and the public need to understand how AI is or is not affecting the workforce. However, there are other important and recognized gaps in the current policy and regulatory landscape. While it's possible that AI will result in mass layoff events, its effects are more likely to manifest as attrition without backfill, entry-level positions that are never posted, or perhaps a hiring freeze. None of these factors would trigger the CA WARN Act’s disclosure provisions. But there is a relevant milestone coming up that should be on people’s radar.
In May, Governor Newsom, made note that “while new technologies present opportunities, it is in our collective interest to take proactive steps to manage and mitigate potential disruptions to our workforce, education systems, and economy…”. As a result, he issued Executive Order N-6-26 which directed the Labor and Workforce Development Agency, within 180 days, to provide him with:
- Its own set of recommendations for revising the CA WARN Act in a manner that is responsive to, and effectively provides early warning data on, emerging industry trends.
- A review of policies and practices that provide displaced workers with a safety net, including severance and other forms of compensation such as stock or other forms of equity, and any recommendations for incorporating such policies or strengthening existing programs, including a review of temporary subsidized employment programs like CalWORKs/JobsNOW.
- A workplan for expanding awareness of and enrollment in employment insurance programs such as employment stability payments through Work Share.
- Recommendations on options for improving efforts to connect unemployed workers to opportunities for training and upskilling.
These important recommendations are due from the Labor and Workforce Development Agency (LWDA) by November 17, 2026.
The NextGen team and others will be keeping an eye out for these recommendations as well as looking for opportunities to engage with our partners and the public at large on the best ways to help shape implementation efforts. Additionally, you should be aware that the Newsom administration released a report on October 13th that summarizes the information they gained through his Engaged CA effort – this was an effort on the Administration’s part to gauge Californians’ thoughts about AI. The main themes that emerged from comments submitted by everyday Californians were: AI companies should be held accountable for the harm they may cause; protections are needed for people and the environment from the resource needs of AI; and support for rules regarding where and how AI can be used safely.
With November 17th just a few weeks away, NextGen and our coalition partners stand ready to review and assess the LWDA recommendations and any related developments closely. Our focus will be to think through how we want to engage in the AI revolution, working in coalition with other aligned groups, to help achieve the best possible outcomes for workers, our economy, and the broader public.
Stay tuned and thanks for reading!
