Adam Bouka
By Adam Bouka
California has spent the past several years positioning itself at the forefront of artificial intelligence regulation. Much of the early focus has centered on AI-driven hiring tools, automated decision systems (“ADS”), and the potential for discriminatory outcomes in recruiting and employment decisions. As discussed in our prior articles, California’s New AI Employment Rules and the Workday Lawsuit: What HR Needs to Know and New AI Hiring Rules and Lawsuits Put Employers on Notice: What HR Needs to Know, California regulators and courts have increasingly scrutinized how employers deploy AI in hiring and employment decisions.
Governor Newsom’s May 21, 2026 Executive Order N-6-26 signals that California’s AI workforce policy may now be expanding beyond hiring discrimination and automated decision-making into a broader framework focused on workforce disruption, labor-market impacts, worker protections, retraining, and collective bargaining.
Importantly, the Executive Order does not itself impose immediate new compliance obligations on employers. Rather, it directs state agencies to study, evaluate, and make recommendations regarding the workforce implications of AI and other emerging technologies. But the Order provides a meaningful roadmap for where California policymakers may be headed next.
From AI Hiring Regulation to AI Workforce Governance
The Executive Order reflects a notable shift in emphasis. Earlier California AI employment developments focused primarily on:
- discrimination risks associated with AI-assisted hiring tools,
- automated decision systems used in employment decisions, and
- transparency and accountability in algorithmic decision-making.
Executive Order N-6-26, by contrast, repeatedly frames AI as a broader workforce and economic issue with potential implications for:
- labor-market disruption,
- workforce displacement,
- retraining and upskilling,
- collective bargaining, and
- long-term economic opportunity.
In many respects, the Order suggests California is beginning to view AI not simply as a hiring technology, but as a workforce-transforming technology requiring broader economic and labor-policy oversight and regulation.
The Executive Order’s Key Employment-Related Themes
Although the Order spans numerous policy areas, several provisions are particularly relevant for employers.
AI and Workforce Displacement
The Executive Order directs the Labor and Workforce Development Agency (“LWDA”), GO-Biz, and other agencies to evaluate the potential labor-market impacts of AI, including disproportionate impacts on demographic groups and industries. The Order also directs the Employment Development Department to launch dashboards tracking AI-related employment impacts across sectors.
This focus suggests California intends to actively monitor how AI adoption affects employment trends and workforce participation across industries.
Potential WARN Act Reforms
One of the more notable directives requires LWDA to review and provide recommendations regarding potential revisions to California’s Worker Adjustment and Retraining Notification (“WARN”) Act “in a manner that is responsive to, and effectively provides early warning data on, emerging industry trends.”
The Executive Order does not amend California’s WARN Act. However, it signals that policymakers are considering whether existing workforce-notification frameworks adequately address technology-driven workforce disruption and restructuring.
Employers implementing AI-enabled operational changes, automation initiatives, or workforce restructurings should therefore anticipate continued scrutiny around displacement issues.
Collective Bargaining and Worker Participation
The Order directs LWDA to review how collective bargaining processes are addressing AI and emerging technologies, including how “worker voice is incorporated in adoption of emerging technologies.”
This language is notable because it reflects increasing policy attention on:
- employee participation in technology adoption decisions,
- AI-related bargaining obligations, and
- the role of organized labor in shaping workplace AI governance.
Unionized employers, in particular, should expect continued focus on issues such as:
- automation,
- algorithmic management,
- productivity monitoring, and
- technology-driven changes to job duties or staffing models.
Workforce Training and Reskilling
The Executive Order emphasizes workforce development and retraining initiatives, directing agencies to evaluate workforce programs, expand AI literacy efforts, and improve pathways for displaced workers to access training and upskilling opportunities.
This aligns with California’s broader efforts to position workforce development and economic-transition programs as part of its developing AI policy.
What Employers Should Consider Now
Although the Executive Order is largely policy-oriented and does not itself create new private rights of action or immediate employer mandates, employers should view it as an important signal regarding future regulatory priorities.
Employers may wish to consider:
- inventorying AI systems that materially affect workforce decisions including displacement;
- evaluating how AI initiatives may impact staffing structures or operational models;
- coordinating HR, legal, labor relations, and technology teams around AI governance;
- documenting legitimate business justifications for technology-driven restructuring decisions;
- monitoring developments related to California’s WARN Act, workforce reporting, and labor-policy initiatives; and
- reviewing existing AI governance and vendor-management frameworks to ensure they account for both operational and workforce-related risks.
Bottom Line
Executive Order N-6-26 reflects California’s evolving position that AI is not merely a technology issue or a hiring-bias issue. Rather, California appears increasingly focused on AI’s broader implications for workforce structure, labor markets, worker protections, and economic opportunity.
While the Order itself is primarily directional, it provides employers with a meaningful indication of where California AI workforce policy may be headed next.
