California Governor Gavin Newsom recently issued Executive Order N‑6‑26, directing state agencies to evaluate and respond to the growing impact of artificial intelligence (AI) on the workforce, economy, and labor market. While the Order does not impose immediate compliance requirements on private employers, it signals a coordinated policy effort to assess workforce disruption, expand training programs, and prepare for potential legislative and regulatory changes affecting employers.
Focus on Workforce Disruption and Economic Impacts
The Executive Order directs the Labor and Workforce Development Agency (LWDA), in coordination with other state entities, to conduct a comprehensive review of how AI and other technological changes are reshaping California’s labor market. This includes identifying:
- Potential job displacement and workforce disruption trends;
- Industries and occupations most affected by AI adoption; and
- Disproportionate impacts on specific demographic groups.
The state will also develop methods to detect early warning signals of economic disruption, indicating a move toward more proactive workforce intervention strategies.
Potential Revisions to WARN and Worker Protection Laws
The Order specifically directs agencies to evaluate whether existing laws—particularly the California Worker Adjustment and Retraining Notification (WARN) Act—should be updated to better reflect AI‑driven layoffs and industry changes.
Recommendations are expected within 180 days, raising the possibility of:
- Expanded notification requirements tied to automation or AI adoption;
- Enhanced reporting obligations; and
- Earlier or more detailed disclosure expectations for workforce reductions.
Expanded Focus on Worker Protections and Benefits
The Order calls for a review of policies supporting workers impacted by technological change, including:
- Severance practices and compensation models;
- Safety net programs and employment support mechanisms; and
- Alternatives to layoffs such as work‑sharing programs.
The state will also explore ways to increase participation in unemployment insurance and workforce transition programs, suggesting future emphasis on employer engagement in these systems.
Workforce Training and Upskilling Initiatives
A central component of the Order is the expansion of training and reskilling programs aligned with emerging technologies. Agencies are directed to:
- Review and update workforce training programs to ensure they align with AI‑affected industries;
- Develop an “AI workforce playbook” to guide training and reemployment strategies; and
- Strengthen coordination among employers, educational institutions, and workforce development systems.
The Order also encourages higher education institutions to expand apprenticeships, certificates, and job‑integrated training programs to prepare workers for an AI‑driven economy.
Increased Data Collection and Reporting
The Employment Development Department (EDD) is directed to enhance reporting on AI’s labor market impacts, including:
- Launching a public dashboard tracking employment trends affected by AI; and
- Providing regular reports incorporating employer feedback on how technology influences hiring and workforce decisions.
This increased data collection signals closer monitoring of employer workforce practices related to automation and AI adoption.
Emphasis on Worker Voice and Collective Bargaining
The Order highlights the role of collective bargaining and worker input in managing technological change. The state will evaluate how labor‑management relationships address AI adoption and consider how worker voice can be incorporated into technology deployment decisions.
Encouragement of Responsible AI Adoption and Business Engagement
The Governor also directs state agencies to promote “opportunity AI”—the responsible use of AI to support economic growth—through:
- Outreach and education for businesses, particularly small businesses;
- Support for technology adoption and workforce training; and
- Potential exploration of public‑private partnerships and incentive structures related to AI development.
Employer Takeaway
Executive Order N‑6‑26 does not immediately impose new legal obligations on employers, but it signals a clear policy direction toward increased regulation, oversight, and workforce protections tied to AI adoption.
Employers in California should view this Order as an early indicator of potential future developments, including:
- Expanded workforce reporting and layoff notification requirements;
- Greater scrutiny of automation‑related employment decisions;
- Increased expectations around training, reskilling, and workforce transition support; and
- Potential integration of worker input or collective bargaining considerations in technology implementation.
Organizations using or planning to adopt AI‑driven systems should monitor forthcoming reports and recommendations from state agencies, as these are likely to inform future legislation and regulatory action affecting workforce management in California.