Employment: technological displacement: notice.

The immediate written technology hiring disruption notice requirement for employers who stop hiring due to AI or automation is eliminated from Section 1402.7. Employers no longer must file a notice with EDD when they permanently end hiring for a position because of AI.

A new requirement is added that AI-related displacement notices under Section 1401 must include the statement 'This notice is for a technology displacement' at the top of the notice, making these cases easier to identify and track.

EDD must submit a report to the Legislature by January 1, 2028 on AI's effects on business hiring practices, including recommendations about what a public notice requirement should look like (timing, content, EDD's role in compiling data). The section sunsets and is repealed on January 1, 2029.

Coverage of independent contractors and government entities (state, local, special districts, UC, CSU, community colleges) is removed from Section 1402.7. The 'worker' definition no longer includes independent contractors, and the broad 'employer' definition listing government bodies is eliminated.

References throughout Section 1401 are expanded from just 'AI' to 'AI or other automated technology,' broadening the types of automation covered under the displacement notice requirements.

The $500-per-day civil penalty for failing to provide a technology hiring disruption notice is removed, since the underlying notice requirement no longer exists in Section 1402.7.

EDD is now required to publish a summary of AI-related displacement notices on its website as part of regular Cal/WARN data reporting, and to post a quarterly statewide summary of technology displacements reported.

The threshold for 'technological cessation in hiring' is lowered from 'caused in whole or in substantial part by' AI to 'caused in whole or in part by' AI or other automated technology, making the definition broader and easier to trigger.

The entire California Worker Technological Displacement Act (Article 3, Sections 1414 through 1414.11) was deleted. This removed: the separate 60-day advance notice requirement for technological displacement of 50+ workers; the right of first bid on other positions for workers at employers with more than 100 employees; the prohibition on discharging affected workers without cause during the 60-day notice period; special annual notice requirements for local educational agencies and community college districts; the Technological Displacement Act Fund; and the severability clause.

An exception was added to the 'technological cessation in hiring' definition: it does not apply when an employer ends contracting out for a particular occupation or position in order to replace that work with its own workers (i.e., bringing work in-house is not treated as a technological cessation).

Section 1402.7 now defines 'Contractor' as an entity contracted with or compensated by a business or state/local government in any workplace for at least 6 months of the preceding 12 months, extending the hiring cessation notice requirement to cover contractors, not just employees.

The 'employer' definition in Section 1402.7 now includes the 75-person threshold (matching 'covered establishment') and explicitly adds 'Any business or state or local government that contracts with or compensates contractors' as a covered employer type.

The 'technological cessation in hiring' definition was broadened from covering only 'hiring' to covering 'hiring or contracting workers or contractors,' and the notice requirement now references positions that will no longer be filled by 'workers or contractors' rather than just 'humans.'

Section 1406(b) corrected a drafting error that listed 'Section 1401' twice in the list of enforceable provisions.

The bill was restructured so that AI-related notice requirements are now built into the existing Cal/WARN Act (Sections 1400.5, 1401, 1403, 1406) and a new Section 1402.7, rather than existing only in a separate standalone article. This means AI-driven layoffs that already trigger Cal/WARN notice now automatically carry additional AI-specific disclosure requirements.

A new legislative finding (Section 6) declares that the technology hiring disruption notice provisions address a matter of statewide concern rather than a municipal affair, explicitly applying them to all cities and counties including charter cities and charter counties.

The threshold for triggering the standalone Technological Displacement Act notice requirement was raised from 25 or more workers affected during any 30-day period to a layoff of 50 or more workers during any 30-day period caused in whole by AI. Fewer employers will now be subject to the standalone article's requirements.

New Section 1402.7 requires employers to file a written technology hiring disruption notice with EDD when they permanently stop hiring for an occupation due to AI or automation (caused in whole or in substantial part). EDD must post summaries online, compile quarterly statewide reports on AI-driven displacement, and submit them to legislative labor and budget committees.

Section 1401 now requires that any Cal/WARN notice for a mass layoff, relocation, or termination caused in whole or in substantial part by AI must include the job functions being automated, the specific type of AI system used, and the entity that developed, sold, or leased it. All Cal/WARN notices must also include CalFresh program information and a functioning employer contact number.

The requirement that notices include 'the justification for, and purpose of, the use of the AI tool' was removed from both the Cal/WARN amendment and the standalone article notice requirements.

The detailed back pay and benefits liability provisions (calculating average regular rate over three years, value of lost benefits, medical expenses) were removed from the standalone article. The penalty structure now relies on the Cal/WARN civil penalty of up to $500 per day of violation, with a safe harbor if the employer pays owed amounts within three weeks.

The private right of action allowing workers or local governments to bring civil lawsuits in court (with attorney's fees for prevailing plaintiffs) was removed from the standalone article. Enforcement is now channeled through the Labor Commissioner under the Cal/WARN framework.

The definition of 'technological cessation in hiring' in new Section 1402.7 uses the broader standard 'caused in whole or in substantial part by AI or other automation,' while the standalone article retains the narrower 'caused in whole' standard for both technological displacement and technological cessation in hiring.

Assembly Members Bauer-Kahan and Lowenthal were added as coauthors of the bill.

Advance written notice period reduced from 90 days to 60 days before a technological displacement.

The local workforce investment board was removed as a required recipient of the technology hiring disruption notice; only the EDD now receives that notice.

The EDD reporting requirement was changed from posting full notices to posting summaries of notices, integrated into the existing Cal/WARN Act notice reporting website.

The threshold triggering notice changed from '25 or more workers or 25 percent of the workforce, whichever is less' to '25 or more workers during any 30-day period,' removing the percentage-based alternative.

Community college districts that provide layoff notices under Education Code Sections 87740 and 88017 are now explicitly covered, alongside local educational agencies.

Definition of 'technological displacement' narrowed: causation standard changed from 'in whole or primarily by' to 'in whole by' an AI system, and a new requirement was added that the layoff must involve 50 or more workers during any 30-day period.

Definition of 'technological cessation in hiring' narrowed: causation standard changed from 'directly and primarily due to' to 'caused in whole by' the use of AI or other automation.

The definition of 'employer' was expanded to include a reference to a person who directly or indirectly owns and operates a covered establishment, with specific language about parent corporations and their subsidiaries.

The definition of 'worker' was broadened from 'an individual employed or contracted by an employer' to 'any natural person who is an employee of, or an independent contractor providing service to, or through, a business or a state or local governmental entity in any workplace.'

Employers who fail to provide notice are now explicitly subject to the enforcement provisions of Cal/WARN Act Sections 1403 to 1407, in addition to the existing back pay and civil penalty provisions.

A new provision authorizes the Labor Commissioner and EDD to adopt rules and regulations to effectuate the purposes of the article under the Administrative Procedure Act.

The combined-notice provision (Section 1414.4) was expanded to clarify that when a workforce action triggers both this article and Cal/WARN, compliance with the combined notice constitutes full satisfaction of obligations under both statutes.

The advance written notice period before a technological displacement was reduced from 90 days to 60 days.

A new notice content requirement (item 9) was added requiring employers to state whether they plan to coordinate rapid response services through the local workforce development board, include the board's contact information with a prescribed description of services, and if coordinating, arrange services within 30 days of the notice.

The right of first bid provision for employers with more than 100 workers now includes an exception: it does not apply to the extent it would conflict with a collective bargaining agreement.

The recipients of the technology hiring disruption notice were reduced. Previously it went to the EDD, the local workforce investment board, and the chief elected official of each affected city and county. Now it appears to go only to the EDD.

The notice content requirement for identifying the AI system was changed from disclosing 'the AI system or other automating technology' to disclosing only 'the specific category or type of AI system or other automating technology,' reducing the level of detail employers must provide about which specific technology caused the displacement.

The trigger threshold for requiring notice now applies to displacements affecting 25 or more workers during any 30-day period, adding a time window that was not previously specified.

A new category of employer was added: local educational agencies that do not provide layoff notices under Education Code sections 45117 and 44955 for classified and certificated staff. A separate new section (1414.5) requires local educational agencies that DO provide such layoff notices to give the EDD an annual written technology displacement or cessation in hiring notice when caused in whole by AI.

A new savings clause (Section 1414.12) was added stating that the article's provisions do not supersede greater protections provided by a collective bargaining agreement.

The definition of 'technological cessation in hiring' was narrowed from being 'directly and primarily due to' AI to requiring it be 'caused in whole by' AI or other automation, making it harder to meet the threshold.

The definition of 'technological displacement' was modified to add 'resulting in layoffs' after 'elimination of employment positions,' slightly narrowing what qualifies.

References to 'termination of contract' were removed from the notice requirement (Section 1414.2(b)), the right of first bid provision (Section 1414.2(d)), and the discharge protection provision. Workers whose contracts are ended due to automation are no longer covered by the bill's protections.

The old version contained two contradictory subsections both labeled (e): one imposing an absolute ban on discharging affected workers during the 90-day notice period, and another requiring 'reasonable and substantiated cause' for discharge. The new version consolidates these into a single provision that only requires reasonable and substantiated cause, effectively allowing employers to discharge displaced workers during the 90-day window if they have a valid reason.

A cross-reference error in Section 1414.6(d) was corrected: the safe harbor for avoiding civil penalties previously referenced 'Section 1414.4' (which deals with combining notices) but now correctly references only 'subdivision (a)' of that same section.

The summary section and Section 1414.3(b) contain what appears to be residual duplicated text from the amendment process, though the substantive notice recipients (EDD, local workforce investment board, chief elected official) remain unchanged.

The definition of 'technological displacement' was narrowed to only cover elimination of employment positions. The previous alternative covering a reduction in hours equivalent to 25 percent or more of total workforce time was removed, meaning employers can cut hours without triggering the notice requirement.

The bill eliminated the separate 'covered employer' definition and consolidated everything under a single 'employer' definition. While functionally similar (both covered any number of workers), this simplifies the statutory language.

The 90-day advance written notice requirement no longer applies to 'termination of contract' events. It now only applies to technological displacement (elimination of positions). This removes a significant category of workforce actions from the bill's coverage.

The technology hiring disruption notice now only applies to a 'technological cessation in hiring' (permanently ending hiring for a position). The previous broader trigger of 'reduction in hiring or cessation in hiring' was narrowed, so employers can reduce hiring without triggering this notice.

The discharge protection during the 90-day notice period was weakened. The old version prohibited any discharge of affected workers (for employers with more than 100 workers) during the 90-day window. The new version allows discharge if the employer has 'reasonable and substantiated cause,' converting an absolute ban into a qualified one.

The list of local government notice recipients for technological displacement was changed from 'the chief elected official, city council members and county board of supervisors' to just 'city council members and county board of supervisors,' removing the chief elected official (mayor or supervisor) as a required recipient.

The requirement that the Department of Industrial Relations annually and publicly post EDD reports on its website was removed from the bill.

Cross-references were updated to reflect renumbered sections (e.g., the penalty waiver now references Section 1414.4 subdivision (a) instead of just Section 1414.4), and the EDD reporting language was changed from 'quarterly report summary' to 'quarterly summary.'

The term 'covered employer' is replaced throughout with 'employer,' using the broader definition that includes state entities, local governments, school districts, and universities. This simplifies the legal framework by eliminating the separate 'covered employer' category.

The definition of 'technological displacement' is narrowed: causation must now be 'primarily' due to AI or automation (previously 'in whole or in substantial part'), and the technology must specifically be 'replacing or automating those employment positions.'

A new defined term 'technological cessation in hiring' is added, meaning the permanent end of hiring for an occupation or position directly and primarily due to AI/automation. It explicitly excludes an overall reduction in employment positions.

Notice recipients are expanded from 'the chief elected official of each city and county' to 'city council members and county board of supervisors of each city and county,' broadening local government awareness of technological displacement events.

A new item (8) is added to the required notice content: employers must disclose whether retraining is available to current workers to transition from eliminated occupations to new ones at the company.

The hiring disruption notice trigger is tightened from 'due to the adoption of AI or other automating technology' to 'directly and primarily due to the adoption of AI or other automating technology,' making it harder to trigger the notice requirement.

A new provision (Section 1414.4) allows an employer that already must provide notice under Section 1401 (the state WARN Act) to combine all notice requirements into a single document, reducing administrative burden.

Two new items (8 and 9) are added to the hiring disruption notice: employers must state whether the cessation resulted in creation of other employment positions, including the number and occupation of those positions.

The EDD is now required to post individual notices on its website in addition to compiling the quarterly summary report, increasing public transparency about specific displacement events.