California Governor Issues EO on AI

California Governor Gavin Newsom issued a “first-in-the-nation” executive order (EO) on artificial intelligence (AI), directing state agencies to study the workforce effects of AI and develop recommendations on policy responses, training, safety net measures and possible legislative updates.

EO N-6-26 highlighted the Governor’s focus on “growing and sustaining California’s economic and technological leadership,” recognizing the growth of AI across diverse industries, with 33 of the top 50 private AI companies in the world based in the state.

To address potential risks and opportunities associated with AI, California has implemented memorandums of understanding with various tech companies, including NVIDIA, Adobe, Google, IBM and Microsoft to expand AI literacy trainings and strengthen employee protections with respect to automated decision making technology, according to the EO.

Looking ahead, the Governor ordered the Labor and Workforce Development Agency (LWDA), the Governor’s Office of Business and Economic Development and the Department of Finance to provide, within 90 days, a review of the emerging body of academic research identifying the potential workforce impacts of technological shifts, including AI’s impact on California’s labor market and potential disproportionate impacts on demographic groups.

The analysis should include best practices (to the extent practicable) on early economic warning signals of future labor disruptions, the EO noted.

In addition, the LWDA should review and provide recommendations on revisions and updates to the California Worker Adjustment and Retraining Notification Act.

The LWDA was also tasked with submitting a review of policies and practices that provide displaced workers with a safety net, including severance and other forms of compensation, and any recommendations for incorporating such policies or strengthening existing programs, as well as providing a workplan for expanding awareness of enrollment in employment insurance programs.

AI’s impact on the collective bargaining process also needs to be considered and reported on by the LWDA, which will review existing workforce training programs to ensure they are targeted towards growing industries and professions.

Other actions for state agencies include a summary of feedback from businesses by the Employment Development Department about the role of technological adoption in determining hiring or workforce decisions, with reporting occurring twice per year through the end of 2027.

The Government Operations Agency, in consultation with academics and experts, will provide the Governor with options and recommendations for actions that could alter incentive structures and increase the likelihood of AI development and deployment that advance the public good and address critical problems and emerging opportunities facing society.

Recommendations may include public-private partnerships, voluntary or mandatory programs that direct a portion of revenue generated by AI companies to support beneficial deployment of AI that otherwise would not be pursued based solely on market incentives and securing dedicated access to computing power for research and development of AI that meets specified criteria for advancing the public good.

To read the order, click .

Why it matters: The EO puts California employers on notice of potential policy and legislative changes that could follow the multiple AI-related reports and recommendations coming from various state agencies.