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California Governor Gavin Newsom signed two new AI in employment bills that will go into effect as of January 1, 2027. These bills will limit and regulate the use of artificial intelligence decision making in the employer-employee relationship.

SB 947 – “No Robo Bosses Act”

SB 947 is this year’s version of the “No Robo Bosses Act.” Last year, Governor Newsom vetoed a version of “No Robo Bosses” which would have required employers to provide notice for automated decision systems (ADS) use in all employment-related decisions and prohibited employers from primarily relying on AI for hiring, promotion, discipline, and termination decisions. An ADS includes “any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decision making and materially impacts natural persons.”

This year’s version, SB 947, which Governor Newsom did sign, is narrower. Under SB 947, an employer may not use an ADS to:

• Prevent compliance with or violate any federal, state, or local labor, safety, employment, or civil rights law;
• Infer an employee’s protected status under Government Code Section 12940;
• Predict and take adverse action against a worker for exercising legal rights;
• Make a disciplinary or termination decision by relying solely on an ADS; or
• Retaliate against employees who exercise their rights or assist enforcement of SB 947.

If an employer primarily uses an ADS when making a disciplinary or termination decision, a human reviewer must corroborate the decision. If the human reviewer cannot corroborate the decision, the employer cannot use the ADS output for the disciplinary or termination decision. As an example, if an employer utilizes AI to review employee timecards and the AI output identifies an employee as having a chronic absenteeism issue, a human must review the output prior to discipline or termination of that individual. If the human determines, based on a review of the employee’s file, that the employee does not have a chronic absenteeism problem, but is on protected leave, the employer cannot use the AI output as a basis for discipline or termination.

Further, if the employer has primarily used an ADS for a disciplinary or termination decision, the employer must provide, upon request, a “meaningful, objective description” of the employee’s data used by the ADS leading to the termination decision. Such description must anonymize the personal information of other identifiable individuals.

In addition, once an employer who has primarily relied on an ADS for the discipline and termination decision informs the employee of the decision, the employer must provide a “written post-use notice.” The notice must be a stand-alone communication, written in plain language and be in the language in which other routine communications are provided to employees. The notice must be provided in an easy to read format, such as an email or hyperlink. The notice must state that: (1) the employer primarily relied upon an ADS to make the discipline or termination decision; (2) a human reviewed and corroborated the ADS output; (3) contact information for a human the employee can contact for more information about the decision and who can provide information to the employee about their rights; and (4) a statement that the employer cannot retaliate against the employee for exercising their rights.

SB 951 – Cal/WARN Technological Displacement Notice

SB 951 builds on existing Cal/WARN requirements. Current law requires employers performing a mass layoff (50 or more employees in a 30-day period), relocation, or termination at a covered establishment (75 or more persons in the preceding 12 months) to provide 60 days’ written notice ahead of termination. Now, if the mass layoff, relocation, or termination is caused in whole or in substantial part by AI or other automated technology replacing or automating positions, the notice must provide specific information on the notice:

(1) the number, classification or occupation, and work location of the layoffs substantially due to automation;

(2) the job functions of the replaced workers that will be automated; and

(3) the specific category or type of AI system or other technology that substantially resulted in the displacement.

The notice must also state: “This notice is for a technology displacement.”

What Employers Can Do Now

• Audit how your company is using AI with respect to discipline and termination. Confirm they are not being used for any prohibited use.
• Make sure human reviewers are involved in discipline and termination decisions. Prepare notices for decisions primarily involving AI.
• Identify a human reviewer for discipline and termination decisions that primarily rely on AI output. Identify a human for employees to contact regarding the AI output and information about their rights.
• If you are considering a mass layoff due to automation, include the new Cal/WARN requirements in your notice.