California Governor Gavin Newsom has signed a package of new laws establishing some of the United States’ first state-level protections governing AI use in the workplace, including restrictions on automated disciplinary and termination decisions, disclosure of AI-related job displacement and limits on certain forms of workplace surveillance.
The legislation, signed on September 30, 2026, forms part of California’s broader effort to regulate artificial intelligence as the technology becomes increasingly integrated into employment, healthcare, education and other areas of public life.
Key Highlights
- California has enacted new laws regulating AI use in the workplace.
- Employers will be prohibited from relying solely on AI for certain disciplinary or termination decisions.
- Workers must receive information when AI contributes to specified mass layoffs, relocations or terminations.
- New restrictions target certain AI-powered workplace surveillance practices.
- Employers will be prohibited from using workplace surveillance tools in bathrooms.
- The laws take effect at different times, with some provisions applying in 2027.
- California is also introducing new AI rules covering healthcare, legal services and public higher education.
- The measures are part of a wider state framework for AI safety, transparency and accountability.
California Restricts AI-Only Employment Decisions
One of the major measures signed by Newsom is Senate Bill 947, authored by Senator Jerry McNerney, which addresses automated decision systems used by employers.
The law prohibits employers from relying solely on an automated decision system when making certain disciplinary or termination decisions.
The measure is intended to ensure that a human being remains involved when an automated system plays a significant role in an employment decision.
The legislation forms part of California’s broader approach to regulating automated decision-making in the workplace rather than prohibiting employers from using AI altogether.
The law follows growing use of automated systems for functions such as productivity assessment, employee monitoring and other employment-related decisions.
AI-Related Layoffs Must Be Disclosed
Another measure, Senate Bill 951, addresses technological displacement.
The legislation requires employers to provide information when a mass layoff, relocation or termination is caused in substantial part by an AI system or other technology.
The provision is designed to give affected workers greater transparency about the role technology played in employment changes.
It does not prohibit employers from adopting automation or replacing particular tasks with technology. Instead, it establishes disclosure requirements when AI or technological displacement is a significant factor in specified employment actions.
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California Targets AI Workplace Surveillance
The new package also contains measures addressing employee surveillance.
Assembly Bill 1883, authored by Assemblymember Isaac Bryan, concerns workplace surveillance tools and establishes restrictions on certain uses of AI-powered surveillance technology.
The legislation addresses the use of workplace surveillance technologies in ways that can affect employee privacy, including certain systems capable of analysing workers’ emotional states or collecting neural data.
The law includes specified exceptions and limitations, with California officials saying the objective is to prevent emerging technologies from being used in ways that undermine worker privacy.
‘No Bosses in the Bathroom’ Law
Another measure, Assembly Bill 1331, prohibits employers from using workplace surveillance tools in a workplace bathroom.
The legislation creates a direct privacy restriction around one of the areas where employees have a particularly strong expectation of personal privacy.
California included the measure among its first-in-the-nation workplace protections signed on September 30.
California Extends AI Regulation Beyond Employment
Newsom’s September 30 signing session went beyond workplace AI.
The governor also signed legislation requiring California public higher education institutions to establish training relating to AI and AI procurement.
Other measures address AI-assisted healthcare decisions, legal work, digital replicas, AI-generated content and transparency.
In healthcare, new laws seek to ensure that doctors and licensed healthcare professionals retain the ability to exercise their professional judgment when AI or other clinical decision-support systems are involved in patient care.
The governor also signed legislation concerning AI transparency and digital content, including measures aimed at helping people identify AI-generated material.
California Builds Wider AI Regulatory Framework
The latest workplace laws build on several earlier actions by the California government.
In May 2026, Newsom signed an executive order directing state agencies to prepare for potential AI-related disruption to workers and businesses. The initiative included plans to monitor employment effects and develop policies to help workers affected by technological changes.
In June, California launched a tool designed to track and monitor AI-related job-loss trends, describing it as a first-in-the-nation workforce monitoring initiative.
The state has also enacted legislation concerning frontier AI safety, independent AI oversight, child safety, AI-generated content and privacy.
What the New Workplace AI Laws Mean
The new California laws do not amount to a general ban on workplace artificial intelligence.
Employers can continue using AI and automated technologies for many workplace functions, subject to applicable laws and regulations.
The new measures instead establish specific requirements around automated employment decisions, technological displacement and workplace surveillance.
The practical effect will depend on how employers, technology vendors and regulators implement the new requirements and how courts and enforcement agencies interpret the legislation.
California’s latest measures are likely to add to the growing national debate over how much authority employers should give automated systems as AI becomes increasingly involved in workplace decisions.
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