As AI develops faster than policymakers can respond, Governor Gavin Newsom signed Executive Order N-6-26 (EO) in an effort to close the gap. The Order directs state agencies to partner with labor, academia, and the private sector to recommend how California can “manage and mitigate potential disruptions” to the labor market and “help guide future policymaking and regulations to protect the public, workers, and our economy.”

Four key directives—and what they may mean for California businesses

The EO addresses a wide range of workforce concerns, but four directives stand out for their potential to shape future legislation and the workforce:

• Reviewing California’s Worker Adjustment and Retraining Notification (WARN) Act
• Requiring biannual employer reporting on AI’s role in hiring and workforce decisions
• Examining collective bargaining’s role in addressing AI in the workplace
• Exploring voluntary or mandatory revenue redirection from AI firms toward the “public good”

WARN Act review

• What it does: The EO directs the Labor and Workforce Development Agency (LWDA) to “review and provide to the Governor recommendations on revisions and updates” to the WARN Act “in a manner that is responsive to, and effectively provides early warning data on, emerging industry trends.”
• Why it matters: California’s WARN Act currently requires employers with 75 or more employees to file a WARN notice when they lay off 50 or more employees within a 30-day period, when they close a plant or facility, or when operations are relocated. The LWDA may propose broadening these reporting criteria or adding a required disclosure on whether AI played a role in any workforce reduction. A bill pending in the California Legislature—Senate Bill 951—could overtake this directive. As amended on May 14, 2026, SB 951 would require businesses to give at least 90 days' advance notice before AI-driven layoffs affecting 25 or more workers or 25% of the workforce, among other things. SB 951 is one of a series of recently introduced bills sponsored by the California Federation of Labor Unions. 

AI hiring and workforce reporting

• What it does: The EO directs the Employment Development Department (EDD)—which administers California’s unemployment insurance system and publishes the monthly California Labor Market Review—to include biannual reporting through 2027 summarizing “feedback from businesses about the role of technological adoption in determining hiring or workforce decisions.” Within 90 days, EDD must also launch an employment-impact dashboard built from unemployment insurance data.
• Why it matters: Collecting this data may provide the Legislature with an evidentiary record for future workplace regulation. For example, SB 973 (2020) required employers with 100 or more employees to submit annual demographic and compensation data to the State. Two years later, SB 1162 (2022) amended that same reporting statute to expand its reporting obligations and require pay-scale disclosures in public-facing job postings. AI workforce reporting could similarly lead to more substantive regulation.

Collective bargaining review

• What it does: The EO instructs the LWDA to “review how the collective bargaining process is incorporating and addressing new technologies, such as AI. . .including how worker voice is incorporated in adoption of emerging technologies.”
• Why it matters: The review is positioned to identify relevant provisions in collective bargaining agreements around new technology and to consider what can be learned and possibly extended by law into non-union workplaces.

Revenue redirection to the “public good”

• What it does: By October 15, 2026, the Government Operations Agency must recommend actions “that could alter incentive structures” for AI development and deployment, which may include “voluntary or mandatory programs that direct a portion of revenue generated by AI companies to support beneficial deployments of AI” and “securing dedicated access to computing power” for public-interest research.
• Why it matters: Any recommendation providing for “mandatory” redirection of revenue raises the possibility of a State levy on AI firms.

Final thoughts

It is no coincidence that most of the EO’s action items are due by October 2026, in the final months of Newsom’s governorship. The EO could very well be his gubernatorial swan song—and a campaign talking point if he runs for president. In the meantime, California businesses should be aware that AI-related disclosure obligations for hiring and workforce decisions may be on the horizon and that workforce-protection bills aiming to fast-track the State's regulatory response are pending in the Legislature.