California bans AI-only firings, requires AI layoff notices
- Governor Gavin Newsom signed new AI workplace laws on Sept. 30, 2026.
- Employers can no longer rely only on AI to discipline or fire workers.
- Employers must disclose when an AI system causes a mass layoff, relocation or termination.
- AB 1883 bans AI tools that infer workers’ emotional state or collect neural data.
CALIFORNIA, UNITED STATES — California employers can no longer rely solely on artificial intelligence (AI) to discipline or fire workers, and must disclose when an AI system causes a mass layoff, under laws Governor Gavin Newsom signed on Sept. 30.
The package also restricts AI-powered workplace surveillance, adding new duties for employers in the state with the largest U.S. workforce.
Human review and layoff disclosure
SB 947 by Senator Jerry McNerney prohibits employers from relying only on AI when making a disciplinary action or termination decision, according to the governor’s office.
SB 951 by Senator Eloise Gómez Reyes requires employers to disclose if a mass layoff, relocation or termination is caused by an AI system.
The Associated Press reported that the law requires written notices to workers when AI is responsible for mass layoffs.
“AI should expand opportunity – not come at the expense of workers and families,” Newsom said.
He also signed an executive order requiring state agencies to keep calling the technology “artificial intelligence” rather than “super intelligence,” the term President Donald Trump recently ordered U.S. diplomats to use, the AP reported.
Limits on AI workplace surveillance
AB 1883 by Assemblymember Isaac Bryan bans employer surveillance tools that use AI to recognize, infer or predict an employee’s emotional state, or to collect neural data.
Law firm Barnes & Thornburg noted the bill carries penalties of up to $500 per violation and takes effect Jan. 1, 2027.
Another measure bans employers from using workplace surveillance tools in workplace bathrooms.
“By signing these four first-in-the-nation bills, Governor Newsom has shown the country how we can begin to put guardrails on AI at work,” said Lorena Gonzalez, president of the California Federation of Labor Unions, AFL-CIO, speaking on SB 947, SB 951, AB 1331 and AB 1883.
The signing came on Newsom’s last day to act on bills before he terms out in January.
California’s notice rule follows Connecticut, where employers filing layoff notices must now say whether cuts are tied to AI.
Layoff notices that name AI put automation-driven restructuring on the record, the same decisions that often shift work to offshore outsourcing and business process outsourcing (BPO) partners.
For employers in California, the laws add human review to AI-assisted discipline and a disclosure step to AI-linked cuts.
Providers on the top BPO companies worldwide list that support California clients can expect contracts to address human oversight of AI tools.
Related news
- Connecticut employers must now disclose AI-linked layoffs · 2 Oct
- U.S. firms rebrand AI layoffs as ‘restructuring’ · 28 Aug
- 22% of firms cut entry-level hiring due to AI: Gartner · 8 Aug
Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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