The brake pad warning system has a sensor consisting of one or two wires embedded in the pad. These wires are connected to the electrical circuit for the warning system.
When the pad wears down to a certain level, the action of braking causes the brake disc to touch the wires, completing the electrical circuit and causing the warning light to come on on the dash. There are several different ways in which the brake fluid level warning light can work.
One common system has a float built into the cap of the brake fluid reservoir. When the fluid level is high, the float breaks the circuit to the warning light but, as fluid level drops, the float falls with it. When the float reaches a certain depth, it completes the circuit and triggers off the alarm.