California enacts SB 951 and SB 574, AI displacement and arbitrator-disclosure laws

California enacted SB 951 and SB 574 on September 30, 2026, two measures inside a broader state package that add AI-specific disclosure duties to workplace layoffs and to the practice of law and arbitration.

SB 951 amends the California WARN Act to flag AI-driven layoffs, while SB 574 requires attorneys and arbitrators to verify, and in some cases disclose, their use of generative AI.

What it is

SB 951, carried by Senator Eloise Gómez Reyes, amends the Cal/WARN Act to add disclosure obligations whenever AI or automated technology substantially causes a mass layoff, relocation, or termination.

SB 574, carried by Senator Thomas Umberg, sets new rules for how attorneys and arbitrators may use generative AI in legal and arbitration proceedings.

Both bills were signed the same day as AB 1331's workplace-surveillance restrictions, part of a wider set of worker-focused AI measures.

What it requires

Beginning January 1, 2027, SB 951 adds disclosures to notices already required under California's WARN Act when a mass layoff, relocation, or termination is caused wholly or substantially by AI or other automated technology replacing or automating positions.

The required notice must identify the number, classification or occupation, and work location of employees laid off substantially due to AI or automation, the job functions that will be automated, and the specific category or type of AI system or technology involved.

The notice must also carry the words this notice is for a technology displacement at the top of the document.

The Employment Development Department will publish summaries of these notices and a quarterly statewide summary of worker displacement from AI and automation, and it must report to the Legislature by January 1, 2028, on AI's effects on hiring.

Under SB 574, an arbitrator may not delegate any part of their decision-making to generative AI and may not rely on AI-generated information from outside the case record without first notifying the parties.

Attorneys who use generative AI must take reasonable steps to verify every case and statute citation and must disclose generative AI use in documents submitted to a court.

Attorneys also may not enter confidential, personal, or other nonpublic information into an AI tool unless access to that information is limited to the attorney and persons obligated to keep it confidential.

Unless otherwise noted in the package, the new laws take effect January 1, 2027.

What security leaders should do

Treat the Cal/WARN AI disclosure as a records requirement: before any covered layoff, document which automated systems or AI tools materially drove the decision so the notice's job-function and technology-type fields can be completed accurately. Coordinate with legal operations and outside counsel to confirm that any generative AI used in drafting filings or supporting arbitration is logged, verified, and disclosed as SB 574 requires, particularly where vendor contracts involve AI-assisted drafting or research tools. Where the same automated systems that inform layoff decisions also touch discipline or termination, align this documentation with the human-review and data-access workflows California already requires for automated decision systems in employment, so one evidentiary trail can support multiple statutory obligations.