California Employers:

Governor Newsom signed an executive order on May 21, 2026 directing various California agencies to study AI’s impact on the state’s labor market, including potential disproportionate impacts on certain demographic groups. The order demonstrates the executive branch’s appetite for enacting new AI-related employment regulations.

Key directives include requiring the Labor and Workforce Development Agency (LWDA) to:

  • recommend revisions and updates to the California Worker Adjustment and Retraining Notification (WARN) Act within 180 days,
  • review the safety-net for displaced workers (including severance and other forms of compensation such as stock or equity awards) and
  • examine how the collective bargaining process is addressing AI and other new technologies.

The executive order also addresses other agencies. For example, the Employment Development Department (EDD) is directed to:

  • prepare a summary of business feedback regarding the role of technological adoption in employment decisions and
  • launch a dashboard showing AI’s impact on employment across various sectors using unemployment insurance data.

Additionally, the Governor’s Office for Business and Economic Development (“GO-Biz”) is ordered to support worker ownership models and encourage business adoption of AI tools to support workplace training and retention.

While the executive order does not require any immediate action from private employers, California employers should keep an eye out for recommendations from the various agencies and any subsequent legislation or regulation that may require private employer compliance.

You can read the full EO here: 5.21.26-AI-Workforce-EO-FINAL-SIGNED.pdf