Governor Newsom Signs Executive Order To Confront Economic Impacts of AI - CDF Labor Law LLP

On May 21, 2026, Governor Newsom signed a first of its kind Executive Order N-6-26, effective immediately, mandating various California agencies, departments and industry partners to report on artificial intelligence (AI) labor market research statistics, best practices, employment policies/procedures, and recommendations on California Worker Adjustment and Retraining Notification (WARN) Act mass-layoff updates.

The mandates include the following:

1. Within 90 days:

• The Labor and Workforce Development Agency (LWDA), the Governor’s Office for Business and Economic Development (GO-Biz), and the Department of Finance, with industry partners and state agencies, shall provide a review of research identifying the potential workforce impacts of technological shifts, including AI’s impact on the labor market and potential disproportionate impacts on demographic groups including best practices analysis on early economic warning signals of labor disruptions.

2. Within 180 days:

• The LWDA shall provide recommendations on revisions to the California WARN Act and submit a review of policies and practices that provide displaced workers with a safety net (i.e., severance or other type of compensation). Additionally, the LWDA will provide recommendations for policies on strengthening existing programs.

3. By October 15, 2026:

• The LWDA, along with labor organizations, employer groups and experts, shall review how the collective bargaining process is incorporating and addressing new technologies, such as AI, in ways tailored to the specific needs of workers and employers and the LWDA shall report on workforce training programs with the Jobs First Council, businesses, community colleges, labor unions, and other community organizations.
• The Government Operations Agency shall, with consultation from the University of California system, Stanford University’s Institute for Human-Centered Artificial Intelligence, and the private sector, provide recommendations for actions that may alter incentive structures and increase likelihood of AI development and deployments that advance the public good and address critical problems and emerging opportunities facing society (e.g., public-private partnerships, voluntary/mandatory programs that direct a portion of revenue generated by AI companies to support beneficial deployments of AI, and/or securing dedicated access to computing power for AI research and development).

The Employment Development Department (EDD) is also required to develop an AI playbook to expand dislocated worker strategies and to submit bi-annual summaries of business feedback (through 12/2027) regarding the role of technology in hiring and workforce decisions.

While there are no immediate private employer requirements under Newsom’s Executive Order, we will continue to monitor any revisions to the California WARN Act and potential legislative changes affecting severance, compensation (stock or other equity), job training, insurance and labor rights across various industries.

Other Noteworthy AI Legislation

• SB 947 (Pending Legislature): The “No Robo Bosses” Act of 2026, which passed the State Senate and is pending in the State Assembly, would prohibit employers from using Automated Decision Systems (ADS) to perform certain functions. The bill would authorize a worker to request, and require an employer to provide, a copy of the most recent 12 months of the worker’s own data primarily used by an ADS to make any disciplinary, termination, or deactivation decision. Additionally, the bill requires an employer that primarily relied upon an ADS to make a disciplinary, termination, or deactivation decision to provide the affected worker with a written post-use notice. See the full text of the bill here. (SB 7, the former “No Robo Bosses” Act, was vetoed October 2025 which would have prohibited employers from using Automated Decision Systems (ADS) as the sole factor for making employment decisions regarding termination, discipline, or deactivation. See CDF’s blog on SB 7 here).

• Effective October 2025, the California Civil Rights Department (CRD) issued regulations prohibiting employers from using an “automated decision system” to discriminate against applicants or employees on a basis protected by the California Fair Employment and Housing Act (FEHA). Employers must keep four years of automated-decision system data.

• In September 2025, the California Privacy Protection Agency (CPPA) approved regulations under the California Consumer Privacy Act (CCPA/CPRA) addressing the use of automated decision-making technology (ADMT) and implementing an employer notice requirement which will take effect on January 1, 2027.

Employers should monitor further legislative changes and increasing regulation of AI. CDF will continue to provide counsel on new employer requirements, industry trends, labor workforce statistics and AI legislative developments as issued by Newsom and state agencies.

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