California Signs Landmark New AI Workplace Laws On Termination, Layoffs And Surveillance

As we previously discussed here, artificial intelligence (“AI”) continues to transform the workplace, prompting lawmakers, regulators, and employers to grapple with the risks and opportunities associated with automated decision-making. More recently, we examined California’s proposed “No Robo Bosses Act” and Governor Gavin Newsom’s Executive Order N-6-26, both of which reflect California’s continued effort to regulate AI in the workplace. California has continued to lead the charge in regulating employers’ use of AI and automated decision systems (“ADS”). On September 30, 2026, Governor Newsom signed several significant employment-related AI bills into law. Below, we provide an update on where California’s regulation of AI in the workplace stands and what employers should be doing now to prepare.

AI in Discipline and Termination: The “No Robo Bosses Act”

California lawmakers have also succeeded in placing direct restrictions on employers’ reliance on AI when making employment decisions. On September 30, 2026, Governor Newsom signed SB 947, dubbed the “No Robo Bosses Act,” into law. The new law prohibits employers from relying solely on an automated decision system when making disciplinary or termination decisions. Where an employer primarily relies on an ADS output to make such a decision, a human must review and corroborate the decision using the data underlying the ADS output or other relevant supporting information.

The new law also requires employers that primarily rely on an ADS in making a disciplinary or termination decision to provide the affected employee with written notice at the time the employee is informed of the decision. Employees will also have the right to request a meaningful description of their own data used by the ADS. SB 947 additionally prohibits employers from using ADS to infer an employee’s protected status or to violate federal, state, or local employment and civil rights laws. These requirements take effect July 1, 2027.

AI-Related Layoffs and “Technological Displacement”

Another bill signed by Governor Newsom, SB 951, focuses not on how employers use AI to make individual employment decisions, but on the broader impact AI may have on the workforce. SB 951 amends California’s WARN Act requirements in circumstances where a covered mass layoff, relocation, or termination is caused in whole or substantial part by the use of AI or other automated technology to replace or automate employee positions. Under the new law, employers are required to provide additional information regarding the technology responsible for the displacement and the job functions being automated. These requirements become operative January 1, 2027.

The law also addresses certain circumstances in which an employer stops hiring because technology has reduced or eliminated the need to fill positions, creating additional reporting obligations related to “technology hiring disruption.” Now that it has been signed, SB 951 could significantly affect how employers plan and document workforce reductions involving AI or automation. Employers considering AI-driven restructuring should therefore carefully evaluate whether their implementation plans could trigger additional notice or reporting obligations.

AI in Workplace Monitoring and Surveillance Tools

California lawmakers have also targeted the growing use of AI-enabled employee monitoring and surveillance. AB 1883, along with companion bill AB 1331, cleared the Legislature and was signed into law by Governor Newsom on September 30, 2026. The new law restricts employers’ use of certain AI-powered workplace surveillance tools, including by prohibiting employers, subject to specified exceptions, from using AI-enabled workplace surveillance tools to collect neural data, recognize or infer an individual’s emotional state, make certain gait-based inferences, infer protected characteristics, or use facial recognition to make inferences for purposes of firing, deactivation, or discipline. The new law also bans the use of workplace surveillance tools in bathrooms located in the workplace. Violations can result in civil penalties of up to $500 per violation, enforceable by the Labor Commissioner or a public prosecutor. These requirements take effect January 1, 2027.

The legislation is particularly relevant for employers using emerging technologies marketed as tools for productivity monitoring, behavioral analysis, biometric monitoring, or employee performance assessment. Employers should understand not only whether they use these technologies, but also what data their vendors’ products are capable of collecting or inferring.

Practical Implications for Employers

With California’s AI regulations already in effect and several additional bills now signed into law, employers should continue to take proactive steps to mitigate potential legal exposure:

1. Inventory AI Tools: Identify all AI, algorithms, and automated systems used in recruiting, hiring, scheduling, performance management, discipline, termination, and workforce planning.
2. Ensure Human Oversight: Avoid fully automated disciplinary and termination decisions; decision-makers should meaningfully and independently review AI-generated recommendations.
3. Review Monitoring Technology: Determine whether employee-monitoring tools collect or infer biometric, neural, emotional, behavioral, or other sensitive data.
4. Review Vendor Agreements: Understand not just how you intend to use an AI product, but what it actually does. Vendor contracts should address transparency, data handling, compliance, and liability—and may reference independent verification or audits under California’s new oversight framework (see below).
5. Prepare for Workforce Changes: Document AI’s role in any reductions in force, restructuring, or hiring freezes connected to automation, and monitor for new notice requirements.
6. Update Recordkeeping: Maintain records of automated employment decisions consistent with California’s expanded recordkeeping requirements.
7. Stay Informed: Several AI-employment bills are now law, while others remain pending. Monitor effective dates and implementing guidance as these measures take effect.
8. Leverage the New AI Oversight Framework: SB 813 directs the Government Operations Agency to establish, by January 1, 2028, a framework for designating independent organizations to assess AI systems for safety and risk. AB 1405 creates a state AI auditor registry, with enrollment beginning January 1, 2027. Employers can factor certification by these verifiers or enrolled auditors into vendor diligence.

Looking Ahead: What California’s Continued AI Scrutiny Means for Employers

When we last examined this landscape, California lawmakers were considering how to regulate employers’ rapidly expanding use of AI. One year later, the regulatory framework has taken significant shape as new laws now regulate everything from AI-assisted termination decisions to workplace surveillance.

The takeaway for employers remains much the same: the use of AI in the workplace is not going away, but neither is the legal scrutiny surrounding it—as evidenced by a recent statement from Governor Newsom: “As this technology reshapes the workplace, California is putting people at the center, ensuring we all have a voice in the decisions shaping their future.” Employers should know what AI tools they use, what those tools influence, and where human oversight fits in.