China's courts rule workers can't be fired just because AI replaced them and the US has no such protections Paul Kim Fri, August 14, 2026 at 8:30 AM PDT 5 min read WANG ZHAO / Getty Images In Hangzhou city, a city off the east coast of China and a major AI hub, a worker only identified by his surname Zhou, was laid off at a tech firm . Zhou's job, verifying the accuracy of large language models, was taken over by AI. His contract was terminated after he declined a lower-level reassignment with a 40% pay cut, 25,000 yuan ($3,640 USD) monthly to 15,000 yuan ($2,224 USD), according to Xinhua , a state news agency. An arbitration panel ruled the dismissal was illegal and awarded Zhou with additional severance. The tech firm filed a lawsuit with a Hangzhou district court in August 2025, which they lost. They lost an appeal in April 2026. Must Read Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 6 ways to build wealth like a landlord without actually being one Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake. Here's what it is and 3 simple steps to fix it ASAP The tax breaks in Trump's 'big beautiful bill' expire after 2028. Here are 4 moves to make before the window closes As China sets its sights on global AI dominance, committing $295 billion over the next five years to build data centers, the country's workforce faces the same job security concerns that have gripped the .U.S workforce. However, court cases in several Chinese cities have ruled in favor of workers who lost their job as a result of AI adoption. As AI displaces workers in China, courts rule in favor of the workers In another case, the Guangzhou Intermediate People's Court upheld a lower court's ruling that a tech company illegally dismissed a graphic designer when AI took over his work. Under China's Labor Contract Law, employers need to prove that a termination is due to a "major change in the objective circumstance," meaning that an external circumstance renders it impossible for either the employer or employee to fulfill the agreed-upon contract. The court ruled that replacing workers with AI doesn't necessarily constitute a major change in objective circumstances. In this specific case, the tech company tried to reassign the graphic designer at a lower salary, which indicated that the firm still had need of his skills In the ruling, translated from Chinese to English, Judge Chen Shiyuan wrote , "Employers cannot shift the risks associated with normal technological updates onto employees." While China's labor laws protect employees from AI, they're difficult to enforce. Eli Friedman, a professor of global labor and work at Cornell University, told NPR , "The state does not have the capacity or, frankly, the interest to rigorously enforce its own laws." Story Continues Stateside, Congress has not passed any sweeping laws protecting employees from...
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