Source: DLA Piper

On May 21, 2026, California Governor Gavin Newsom issued an Executive Order directing various state agencies to prepare workers, small businesses, and communities for potential economic disruption caused by artificial intelligence (AI). The Order mobilizes labor experts, economists, academia, and industry leaders to develop policies aimed at managing and mitigating disruptions to the state's workforce, education systems, and economy.

The Order includes several key directives: the Labor and Workforce Development Agency, Governor’s Office for Business and Economic Development, and Department of Finance are to submit a review of academic research on AI’s workforce impacts within 90 days. The Labor and Workforce Development Agency is also tasked with recommending updates to the California WARN Act, reviewing worker safety-net policies, collective bargaining approaches to AI, and existing workforce training programs. The Employment Development Department will collect business feedback on technology adoption related to hiring decisions twice yearly through 2027 and develop a public dashboard showing AI’s employment effects using Unemployment Insurance data. Additional provisions encourage supporting worker-ownership models, evaluating regulatory barriers, advancing ‘opportunity AI’ adoption by small businesses, and enhancing on-the-job training through higher education institutions. The Jobs First Council is instructed to coordinate with local leadership in regions with persistently high unemployment. The Government Operations Agency will consult experts and the private sector to advise on incentive structures promoting AI developments that serve the public good, including possible public–private partnerships or programs allocating AI company revenue for beneficial deployments. The Order shifts California’s AI policy emphasis from procurement standards to labor market considerations.