California Governor Signs Executive Order Addressing AI-Driven Workforce Disruption, by Kartikey A. Pradhan, Esq., 6-8-2026

California Governor Gavin Newsom recently issued Executive Order N-6-26, directing state agencies to study and prepare for the potential workforce and economic impacts of artificial intelligence (AI). 

The Executive Order does not impose new obligations on employers at this time. Instead, it launches a statewide initiative to evaluate how AI may affect workers, businesses, and labor markets, and to develop policy recommendations addressing potential workforce disruption.

The Executive Order, described by the Governor’s Office as a first-in-the-nation order, reflects California’s continued focus on AI governance and signals that lawmakers and regulators are increasingly examining the intersection of AI adoption, workforce displacement, employee training, and employment protections. Although the Order is primarily framed as a research and planning measure, it gives employers a useful preview of the policy areas that may draw increased attention in the months ahead.

Part of a Broader California AI Regulatory Trend

Executive Order N-6-26 is the latest development in California’s ongoing efforts to address the workplace implications of artificial intelligence. The Order follows Governor Newsom’s earlier AI-related executive actions, including Executive Order N-12-23 on responsible state AI use and Executive Order N-5-26 on AI procurement and adoption that protects civil rights, civil liberties, and privacy. It also expressly references California Civil Rights Department regulations concerning discrimination through automated decision systems and California Privacy Protection Agency regulations addressing automated decision-making technology.

While Executive Order N-6-26 does not regulate employers’ use of AI directly, it reflects growing concern among policymakers regarding the technology’s potential impact on jobs, workforce displacement, and economic inequality. The Order is particularly notable because it shifts the focus from AI governance and risk management to the labor-market consequences of AI adoption. By directing state agencies to evaluate possible revisions to the California Worker Adjustment and Retraining Notification (WARN) Act, assess worker-support programs, and develop workforce-transition strategies, the Order signals that future legislative and regulatory efforts may increasingly focus on how employers manage workforce changes associated with automation and emerging technologies.

The Executive Order also arrives as California policymakers continue to evaluate potential regulatory approaches to artificial intelligence in the workplace. In that environment, employers should expect continued scrutiny from lawmakers and regulators regarding both the use of AI in employment-related decisions and the broader workforce impacts of technological change.

Key Directives

The Executive Order directs multiple state agencies, including the Labor and Workforce Development Agency (LWDA), the Employment Development Department (EDD), the Governor’s Office of Business and Economic Development (GO-Biz), and the Department of Finance, to study the impact of AI on California’s workforce and recommend potential policy responses.

Workforce Impact Assessment

Within 90 days of the issuance of the Order, the LWDA, GO-Biz, and the Department of Finance must provide the Governor with a review of academic research regarding AI’s potential impact on California’s labor market, including possible workforce disruption and disproportionate effects on demographic groups. The analysis must also include best practices, to the extent practicable, regarding early economic warning signals of future labor disruptions.

AI Workforce Dashboard

Within 90 days, the EDD must launch a dashboard showing AI’s impacts on employment across various sectors using Unemployment Insurance data. The EDD may consult with leading AI labs that have published related data in developing that dashboard. In addition, the EDD must include in the California Labor Market Review a summary of feedback from businesses about the role of technological adoption in determining hiring or workforce decisions twice per year through the end of 2027.

Review of California WARN Act

Within 180 days of the Order, the LWDA must review and provide the Governor with recommendations on revisions and updates to the California WARN Act in a manner responsive to emerging industry trends and capable of providing early warning data. The Executive Order does not propose specific amendments to the WARN Act, but the directive suggests that future legislative or regulatory proposals could seek to expand notice requirements or otherwise address AI-related job displacement.

Worker Support and Transition Programs

Also within 180 days, the LWDA must submit a review of policies and practices that provide displaced workers with a safety net, including severance and other forms of compensation such as stock or other forms of equity, along with recommendations for strengthening existing programs. The review must also address employment insurance programs, service opportunities for individuals experiencing long-term unemployment or other disruptions, and options for improving connections between unemployed workers and training and upskilling opportunities.

Collective Bargaining and Workforce Development Review

No later than October 15, 2026, the LWDA must review how the collective bargaining process is incorporating and addressing new technologies, including AI, in ways tailored to the needs of workers and employers. By the same date, the LWDA must review existing workforce training programs to assess whether they are appropriately targeted to growing industries and professions, while the EDD must develop an AI playbook to expand dislocated-worker strategies for occupations exposed to AI.

Business and Ownership Initiatives

The Order also directs GO-Biz and CalOSBA to evaluate and, where appropriate, support opportunities to expand worker-ownership models and build wealth from productivity gains among workers. In addition, GO-Biz must support business adoption of what the Order calls “opportunity AI,” including through small-business technology adoption, education on best practices, and engagement aimed at supporting workforce training and retention.

What Employers Should Know

Although Executive Order N-6-26 does not create new compliance obligations, it provides insight into areas likely to receive increased legislative and regulatory attention in California. Employers using or considering AI technologies should monitor developments involving potential California WARN Act revisions, workforce-displacement initiatives, employee training and reskilling programs, collective bargaining issues, and other worker protections related to technological change.

While the Order is primarily focused on research and policy development, it may serve as a precursor to future legislation affecting employers that deploy AI technologies or implement workforce reductions associated with automation.

Employer Considerations

Employers operating in California should consider the following practical steps in response to the Executive Order and related developments:

• Monitor the recommendations expected from state agencies over the coming months, particularly proposals involving the California WARN Act, displaced-worker protections, and workforce-transition programs.
• Track key deadlines, including the 90-day workforce-impact assessment and dashboard launch, the October 15, 2026 reviews concerning collective bargaining and workforce training, and the 180-day WARN Act and worker-support recommendations.
• Evaluate workforce-planning strategies when implementing AI-driven operational changes, especially where automation may affect staffing levels, job duties, or organizational structure.
• Review existing employee training, reskilling, and change-management initiatives to address evolving workforce needs and support retention where possible.
• Stay informed regarding California legislative and regulatory developments that could impose additional obligations in connection with AI-driven workforce change.

Author: Kartikey A. Pradhan, Partner in KD’s San Francisco office