What a “Technology Displacement” Layoff Notice Must Say in California in 2027 (SB 951)

Using artificial intelligence at work does not, by itself, create a new notice duty in California. But when a layoff that already requires a Cal-WARN notice is caused in whole or in substantial part by AI or automation, the notice has to say so, and it has to say it in a specific way. SB 951 adds those requirements to the Labor Code, and the new rules take effect January 1, 2027. This guide covers what the notice must contain, what employees should check when they receive one, and how HR can draft it.

I am Mac Malbrough. I hold a J.D. and an MS-HRM, I am not an attorney, and this is general information, not legal advice. I read SB 951, Chapter 860 of the Statutes of 2026, on the California Legislative Information site on November 4, 2026. For a specific layoff, an employment attorney should review the facts and the notice itself.

What does SB 951 change about layoff notices?

SB 951 amends Labor Code Sections 1400.5 and 1401, which are part of the California Worker Adjustment and Retraining Notification Act, usually called Cal-WARN. It does not create a separate AI layoff notice. It adds required content to the notice an employer already has to give. If a covered event is not caused in whole or in substantial part by AI or automation, the notice is the same notice employers send today. My guide to California WARN and layoffs covers who is covered and when the 60 days start.

The bill also asks the Employment Development Department to report to the Legislature by January 1, 2028, including recommendations on whether employers should give notice about “technological cessation in hiring,” meaning a decision to stop hiring because technology does the work. That is a recommendation, not a requirement. Nothing in the text I read creates a duty for an employer that quietly stops backfilling roles.

When does the technology displacement notice apply?

It applies when an employer gives a Cal-WARN notice for a covered event and the event is caused in whole or in substantial part by the employer’s use of artificial intelligence or other automating technology. The words that decide it are “substantial part.” The bill does not define them. In my reading, that leaves employers with a judgment call and no safe harbor, and it leaves workers with a question to ask directly.

For an employer, the practical approach is to ask this before every covered layoff: did a tool or automation change the work so that these roles are no longer needed? If the honest answer is yes or partly, the added content belongs in the notice. Leaving it out invites a fight about whether the cause was “substantial.” My piece on the cost of AI layoffs and rehiring explains why the decision deserves more than a quick call.

What must the notice say?

The standard notice contents stay. The employer still gives 60 days’ notice to affected employees, the Employment Development Department, the local workforce development board and the chief elected official of each affected city and county. It still includes the elements the statute already requires, such as the statement about services for dislocated workers, the CalFresh information and a contact email and telephone number.

For a technology displacement, the bill adds four items:

• The number of employees affected, their classifications or occupations, and the work location where they are assigned.
• The job functions that were automated.
• The category of artificial intelligence or other automating technology that caused or substantially caused the event.
• A header at the top of the notice that reads “This notice is for a technology displacement.”

The header is the easiest requirement to check and the easiest to miss. The statute calls for it at the top, so it should not sit in paragraph six.

What does EDD do with the notice?

The bill directs EDD to publish a summary of each technology displacement notice it receives, and a quarterly statewide summary of those notices. For an employer, that means the information in the notice becomes public in some form. Write it with that audience in mind.

Who must give a notice at all?

SB 951 does not change the thresholds that decide whether Cal-WARN applies. A small layoff may not require a notice, with or without AI involved. The existing law covers a mass layoff, relocation or termination at a covered establishment, and an employer with questions about whether its facts meet the definitions should have an employment attorney confirm before choosing not to send one. The statute keeps its existing exception for a physical calamity or an act of war.

What should an employee check on the notice?

If you receive a layoff notice that mentions technology, automation or AI, use this checklist before you do anything else:

1. Header: Does the notice say “This notice is for a technology displacement” at the top? If automation is mentioned in the body and the header is missing, ask HR why.
2. Your role: Is your job classification listed, and does it match your actual title and work?
3. Location: Does the work location match where you are assigned?
4. Functions: Are the automated job functions described in a way you recognize? If the tool does not do your actual work, write that down.
5. Technology: Is the type of technology named? Ask what it is and when it was put in place.
6. Dates: When does the 60 days start and end, and what are your last day, final pay and benefits end dates?
7. Services: Does the notice name the services available to dislocated workers and give a contact person?

Then ask in writing about severance, accrued paid time off and health coverage, and about any rehire or recall process. Do not sign a release before you understand what you are giving up. The steps in my guide to the first 48 hours after a layoff work the same way when software was involved. If the facts suggest your layoff was a cover for something else, such as retaliation or discrimination, that is a matter for an employment attorney, not for HR.

How should HR draft the notice? A checklist

1. Decide the cause in writing before the notice goes out, and record who decided it and what they relied on.
2. Put the header “This notice is for a technology displacement” at the very top if the event is caused in whole or in substantial part by AI or automation.
3. List the number of affected employees, their classifications or occupations and the work location for each group.
4. Describe the automated job functions in plain language that the affected employees would recognize.
5. Name the category of technology, not only a product name.
6. Send to every required recipient: the employees, EDD, the local workforce development board and the chief elected officials.
7. Confirm the standard Cal-WARN elements are still present, including the services statement, CalFresh information and a contact email and phone number.
8. Prepare for EDD to publish a summary, and confirm the public description is accurate and does not overstate or understate the role of the technology.

If your handbook or layoff procedure does not mention the new content, add it. My California employee handbook template is $149 and includes layoff and separation language you can adapt.

Why does the wording of the notice matter so much?

A layoff notice is read by the people losing work, by state agencies and, now, by anyone who reads EDD’s summaries. An overstated notice tells the public your business replaced people with software when it did not. An understated one invites the question of why a tool rollout and a layoff landed in the same quarter. Either way, the safest notice is the one that matches the internal record: who decided, when, and on what evidence. That is also why the first item in the drafting checklist is a written cause. Employers that write the decision down first rarely struggle with the notice that follows.

For workers, the same logic runs the other way. A specific notice gives you something to compare with what you were told in meetings, emails and performance conversations. If the story changes between those documents, keep copies of all of them.

What should you do this week?

If you are an employee, keep every message about your role, any tool rollout you were told about and your performance before the notice. If you are an employer, list the tools that have changed how work is done in the last year, and mark any role where headcount might change. If a 2027 layoff is possible, run your notice template against the checklist above now. The HR compliance check-up is built for that review, and the free live sessions include a quarterly California law update.

For the steps around the notice, see a California offboarding checklist.

Sources

• SB 951 (Reyes), Chapter 860, Statutes of 2026, approved September 30, 2026, read November 4, 2026
• Labor Code Sections 1400.5, 1401 and 1402.7, as amended and added by SB 951, in the chaptered text above

McKinley holds a J.D. but is not a licensed attorney. Articles here are general information, not legal advice. For your specific situation, talk with an employment attorney.

Data current as of November 2026. Sources are linked where each figure appears.