California will make employers name the AI behind a mass layoff. Newsom vetoed the warning for public workers.
The chaptered law keeps the 60-day clock and adds a line at the top of the notice that no employer has wanted to write. The fight now moves to three words the statute leaves undefined.
Photo: Businessman standing near an avalanche of colorful boxes. // GaaS News- SB 951 became Chapter 860, Statutes of 2026, on September 30. It takes effect January 1, 2027, according to Littler.
- A layoff caused "in whole or in substantial part" by AI must be labeled at the top of the Cal-WARN notice, with job functions and the type of system named.
- On the same day Newsom vetoed AB 2656, which would have required 45 days' notice to public-sector unions before generative AI took on their work.
California employers that replace workers with AI will have to say so on the first line of a state layoff notice. Governor Gavin Newsom signed Senate Bill 951 on September 30, in a batch that also included SB 947, and the chaptered text is now on the state's legislative site. The law takes effect on January 1, 2027, according to an analysis by the employment firm Littler. We covered the bill in September when it was on his desk. On the same day he signed it, he vetoed a companion idea for government workers, and that veto has drawn far less attention.
What SB 951 requires in an AI layoff notice
SB 951 requires new content in an AI layoff notice 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." The chaptered text and Littler's summary list four items:
- The number of layoffs due to AI or automation, with occupations and work locations.
- The job functions "that will be automated by AI or other automated technology."
- "The specific category or type of AI system or other automating technology that substantially resulted in technological displacement."
- The statement "This notice is for a technology displacement" at the top of the notice.
Cal-WARN's coverage thresholds, 60-day period and penalties do not change. The Employment Development Department must publish a summary of these notices and "post a quarterly statewide summary of technology displacements reported pursuant to this article." It must also report to the Legislature by January 1, 2028 on AI's effects on hiring. The law repeals that one-time report requirement on January 1, 2029. The notice rule and the quarterly summary carry no such end date in the digest, which corrects our September reading of a three-year sunset.
The undefined terms in SB 951
The undefined terms in SB 951 are where the first disputes will land. Littler notes that the law defines artificial intelligence but does not separately define "other automated technology," "technological displacement," or "in substantial part." Take a company that cuts 200 support staff the quarter after rolling out an agent, then says demand softened. Is that substantial? The statute gives no number. Filings like C.H. Robinson's show why the question matters: a company can credit agents for productivity in one document and report lower headcount in another without ever connecting the two.
Why Newsom vetoed AB 2656
Why Newsom vetoed AB 2656 tells you where his line sits. The bill "would require public employers to provide a recognized employee organization with at least 45 days' written notice before developing, purchasing, or requiring the use of any generative artificial intelligence to perform a service that is within the scope of work of the job classification represented by the recognized employee organization," his veto message says. He wrote that it "would impose redundant administrative layers on public agencies and slow the deployment of even the most innocuous tools," and that "this issue is best resolved through the collective bargaining process."
Put the two decisions together and a rule emerges. In the private sector, California will require disclosure after the decision to cut. In its own agencies, it declined to require notice before the decision to deploy.
New York's AI checkbox is the comparison
New York's AI checkbox is the closest comparison, and it remains the cautionary one. The state added an automation question to its WARN form in March 2025. A May review by Hunton Andrews Kurth found that across more than 160 companies, "not a single notice has attributed layoffs to AI technology or automation." We found no newer count. California's design differs in two ways: the disclosure is a legal content requirement rather than a checkbox, and a state agency has to publish the results.
What employers should do before January 1
Employers planning California reductions in 2027 should prepare now, because the judgment call will be made under time pressure. Decide who makes the "substantial part" determination and keep the reasoning. Align what you tell investors about AI productivity with what you would tell the state. Vendors should expect customers to ask how to describe their products in a notice, since "the specific category or type of AI system" is a phrase someone will have to fill in. It will also become a public record. The next lawsuit over AI-selected layoffs may start from it.
