Regulating AI at Work: Key Takeaways from SB 951 and SB 947

California lawmakers are taking a closer look at how artificial intelligence is shaping the workplace—and what it means for employers.

A new slate of proposed legislation—supported by organized labor and policymakers involved in recent worker protection efforts—aims to introduce guardrails around the use of AI on the job. Two key bills—SB 951 and SB 947—take different but complementary approaches.

SB 951: AI-Driven Workforce Reductions (WARN-Like Framework)

SB 951 goes beyond transparency—it effectively creates a WARN-style regime for AI-driven job displacement:

• Lower trigger threshold: as low as 25 employees or 25% of the workforce (whichever is less)
• Longer notice period: 90 days (vs. 60 days under traditional WARN)
• Applies where workforce reductions are tied to AI, automation, or technological displacement
• Expands beyond layoffs to include broader workforce impacts tied to automation

Bottom line: even smaller, tech-driven restructurings could trigger notice obligations and liability risk.

SB 947: Regulating Day-to-Day Use of AI

SB 947 focuses on how employers use AI in employment decisions:

• Limits fully automated decision-making (no “robo-boss” outcomes without meaningful human review)
• Requires notice when AI tools are used in employment decisions
• Emphasizes bias mitigation and accountability for outcomes
• Creates potential recordkeeping and audit obligations

In practice, this makes employer decision-making more transparent—and more discoverable in litigation.

What This Means for Employers

Together, these bills create a one-two punch:

• SB 951 regulates when AI displaces workers
• SB 947 regulates how AI makes decisions about workers

This combination increases exposure across existing frameworks, including:

• FEHA discrimination claims (algorithmic bias)
• PAGA claims tied to systemic practices
• California WARN liability (with expanded triggers tied to AI use)
• Workers’ compensation issues, including return-to-work decisions and causation disputes

The Takeaway

AI may increase efficiency—but these bills make clear that employers remain fully accountable for the outcomes.

Now is the time to:

• Audit AI and automated decision tools
• Evaluate workforce planning tied to automation
• Ensure human oversight and documentation are in placement

As AI continues to evolve, so too will the legal landscape surrounding its use in the workplace—making it critical for employers to stay informed. MS&A’s Employment Law team is here to help; contact us for guidance on California employment law matters, and tune in to our Employers’ Legal Lounge podcast for discussions on emerging trends and practical solutions.

For those looking to take a more active role, join Eric De Wames on Capitol Hill during the SHRM California (CalSHRM) A3 California Legislative & HR Leadership Summit on April 15 in Sacramento and make your voice heard.