Continuing the state’s focus on regulating automation in the workplace, California legislators have introduced Senate Bill 951 (SB 951), also known as the California Worker Technological Displacement Act. Introduced on February 2, 2026, this bill establishes strict notice and protection requirements for employers implementing artificial intelligence or other automating technologies that result in job losses.
Key Provisions of the Act
The bill aims to provide transparency and a “safety net” for workers whose roles are eliminated or significantly altered by technology.
- 90-Day Advanced Notice. Covered employers must provide at least 90 days’ advanced written notice before any “technological displacement” or termination of contract that affects 25 or more workers, or 25 percent of the workforce.
- Mandatory Reporting. This notice must be delivered to:
- The affected employees.
- The Employment Development Department (EDD).
- Specified state and local entities.
- Hiring Disruption Notice. Employers must notify the EDD if they execute a “technological reduction in hiring”, such as a cessation of new hires due specifically to the adoption of AI.
- Right of First Bid. For employers with more than 100 workers, displaced employees are entitled to a right of first bid on other open positions within the company.
- Discharge Prohibition. The bill prohibits the discharge of these workers during the 90-day period following the initial notice.
Enforcement and Penalties
Failure to comply with these new mandates carries financial penalties for California employers.
- Back Pay and Benefits. Employers who fail to provide the required notice must provide back pay and benefits to each affected employee for up to 60 days.
- Civil Penalties. The bill imposes a $500 civil penalty for each day an employer is in violation.
- Legal Action. The Labor Commissioner is granted enforcement authority, and workers are permitted to file civil actions in court to seek damages.
Next Steps for Employers
As this legislation moves through the Senate, employers utilizing automation should take proactive steps to ensure future compliance:
- Inventory Automation Projects: Assess upcoming implementations of AI or automated systems that may impact staffing levels or hiring needs.
- Review Contractual Obligations: Examine existing vendor contracts for automating technologies to determine if their implementation will trigger notice requirements.
- Update Workforce Planning: Integrate a 90-day “buffer” into any project timelines that involve significant technological displacement of personnel.
- Monitor Legislative Dates: Stay updated on amendments that may change the definition of a “covered employer”.
