California Governor Gavin Newsom has enacted a series of artificial intelligence laws, aiming to regulate how employers utilize automated systems in disciplinary actions and terminations, as well as requiring increased transparency in cases of significant job losses attributed to AI. These measures form part of a full legislative package focusing on workplace, healthcare, and AI transparency.
Human Oversight in Employment Decisions
A key aspect of the new laws, as outlined by the California Governor’s Office, is the introduction of human oversight in automated employment decisions, limiting certain forms of workplace surveillance. Senate Bill 947 stands out as a significant measure, prohibiting employers from solely relying on automated decision systems when making disciplinary or termination decisions.
According to SB 947, employers who primarily use automated systems must conduct a human review, verifying the system’s findings with additional information before taking any disciplinary or termination action against a worker. If the AI-generated findings cannot be substantiated, or if a human reviewer deems them inaccurate, incomplete, or misleading, employers cannot use them as the basis for their decision.
The legislation also grants workers the right to request details about the data used by automated systems in their cases. Furthermore, businesses are required to provide written notification when an automated decision system plays a key role in a disciplinary or termination decision, informing the employee that a human has reviewed the outcome. These provisions are set to take effect on July 1, 2027.
Enhanced Transparency in Layoffs and Job Losses
California is enhancing its rules on mass layoffs by incorporating AI-related disclosure requirements. Under Senate Bill 951, companies covered by the California Worker Adjustment and Retraining Act must provide additional information when layoffs, relocations, or terminations are substantially caused by AI systems or other automated technologies replacing jobs.
The mandatory notice must specify the job functions being automated by AI or other technologies. While California’s existing WARN law requires a 60-day notice for mass layoffs, relocations, or terminations at qualifying workplaces, SB 951 introduces a new disclosure requirement regarding the role of technology, without altering the existing notice period.
The legislation instructs the California Employment Development Department to publish summaries of notices related to technological displacement and to produce quarterly statewide summaries. By January 1, 2028, the department must submit a report to lawmakers examining the impact of AI on hiring practices across different industries and occupations in California.
Restrictions on Workplace Surveillance
Governor Newsom has also signed AB 1331 and AB 1883, which address workplace surveillance. The Governor’s Office highlighted that these measures restrict the use of surveillance technology in workplaces, including a ban on the use of such tools in workplace bathrooms.