The order requires California agencies to track AI-related labor changes, review worker protection laws, and recommend new support programs for workers and small businesses affected by AI adoption.
California Governor Gavin Newsom signed an executive order directing multiple state agencies to prepare for job disruptions and economic changes tied to the adoption of artificial intelligence. The order establishes a phased process that requires agencies to track workforce changes, review labor protections, and recommend new support programs for workers and businesses affected by AI deployment.
Phase 1 — Identify Industries And Jobs Most Exposed To AI
The executive order first directs the California Labor and Workforce Development Agency to identify which industries and occupations are most likely to experience the largest workforce changes due to AI adoption. The agency must analyze where AI systems could replace, reduce, or change existing job functions.
The order also requires the agency to review whether current workforce training programs match the skills employers may need as businesses onboard more AI tools. This includes evaluating retraining and career transition programs for affected workers.
The Governor’s office said the goal is to identify labor market disruption before large-scale layoffs occur.
Initial findings and recommendations are due within 90 days of the executive order’s issuance.
Phase 2 — Review Worker Protection And Layoff Policies
The order next directs the California Labor and Workforce Development Agency and related state agencies to review existing worker protection laws and recommend possible updates tied to AI-related layoffs or automation.
This includes reviewing California’s WARN Act, which requires companies to provide advance notice before mass layoffs. Agencies must determine whether current rules adequately cover layoffs connected to AI adoption or automation-related restructuring.
The order also directs agencies to examine unemployment support programs, retraining assistance, severance policies, and California’s Work Share program, which allows employers to reduce employee hours instead of conducting layoffs.
The order states that agencies should recommend ways workers could share in the financial gains from productivity gains created through AI adoption, including profit-sharing or ownership-related models.
Policy recommendations are due within 120 days of the order’s issuance.
Phase 3 — Build Statewide AI Workforce Monitoring System
The order further directs the California Employment Development Department to create a public labor market monitoring system to track AI-related workforce changes statewide.
According to the order, the dashboard must track layoffs, wage changes, hiring activity, job openings, and occupations experiencing significant AI-related disruption. The state said the system is intended to provide early warning indicators for policymakers, businesses, and workers.
The dashboard implementation and broader long-term recommendations are due within 180 days to 1 year of the executive order’s issuance.
Governor Newsom’s office described the order as the first statewide executive action focused specifically on preparing workers and small businesses for AI-related economic disruption. Governor Newsom said, “This moment demands that we reimagine the entire system – how we work, how we govern, how we prepare people for the future.”
