California lawmakers are considering new restrictions on how employers can use automated decision systems to discipline or terminate employees, including requirements for human review and employee notification, according to the California Legislature.
SB 947, introduced by Sen. McNerney with Sen. Reyes and Assembly Members Kalra and Ward as coauthors, would add new rules to the state Labor Code. If enacted, the provisions would take effect July 1, 2027.
AI Could Not Make Discipline Decisions Alone
The bill would prohibit employers from relying solely on an automated decision system (ADS) for disciplinary or termination decisions. When an employer primarily relies on an ADS output, a human reviewer would have to independently investigate and corroborate the decision using relevant information. That could include managerial evaluations, personnel records, work product, peer reviews or witness interviews.
If the ADS output cannot be corroborated or the reviewer determines it is inaccurate, incomplete or misleading, the employer could not use it to make the disciplinary or termination decision.
The bill would also prohibit employers from using an ADS to predict or take adverse action against employees for exercising their legal rights or to infer protected characteristics under California law.
Employees Would Get More Information
When an ADS is primarily used in a disciplinary or termination decision, the affected employee would receive written notice at the time they are informed of the decision. The notice would have to state that an ADS was primarily relied upon, confirm that a human reviewer independently investigated and corroborated the output, and provide contact information for a human who can answer questions about the decision.
Employees could also request a description of their own data from the previous 12 months that was primarily used by an ADS in a disciplinary or termination decision. The request would be limited to once every 12 months, and information identifying other employees or individuals would have to be protected.
Employers Could Face $500 Penalties
The bill would prohibit employers from retaliating against employees who exercise their rights under the proposed law, file complaints or cooperate with investigations.
The Labor Commissioner could enforce the provisions, while public prosecutors could also bring civil enforcement actions. Employers that violate the requirements could face a $500 civil penalty per violation, along with other potential remedies available through civil actions.
The bill would apply to state and local government employers as well as private employers and labor contractors. It would not apply to parties covered by collective bargaining agreements that explicitly waive the law while providing specified protections against algorithmic management.
Certain uses required by federal law, regulation or binding federal contracts involving aircraft, national security, military, space or defense activities would also be excluded.
If passed, SB 947 would add another layer of oversight to the use of AI and automated systems in workplace decisions, particularly when those systems influence decisions that could cost employees their jobs.
