California’s New AI Employment Regulations: What Employees Need to Know
California is about to roll out new rules to protect workers from unfair treatment caused by employers using artificial intelligence (AI) and automated decision systems (ADS) to make employment decisions. These rules were approved by the California Civil Rights Council on March 21, 2025, and are expected to go into effect on July 1, 2025, once they receive final approval from the Office of Administrative Law.
Understanding Automated Decision Systems (ADS)
Many companies now use computer programs or AI tools to help them make decisions about who gets hired, promoted, or even let go. These tools are called automated-decision systems (ADS). They rely on data and algorithms to make decisions faster, but not always fairly.
The new rules define ADS as any system that uses technology to help make decisions about jobs or benefits. This includes tools that use AI, machine learning, algorithms, statistics, or other data processing techniques.
How the New Rules Protect You
The main goal of these rules is to prevent discrimination. Employers cannot use AI or other tools in a way that results in discrimination based on protected characteristics, including race, gender, age, disability, and more. This means that if an AI-driven hiring or evaluation tool disproportionately disadvantages individuals from certain protected groups, it could constitute unlawful discrimination under the California Fair Employment and Housing Act (FEHA). If a hiring tool, for example, ends up excluding more women or older applicants without a valid reason, that could be illegal. The regulations also expand the definition of “agent” to include third parties acting on behalf of an employer, such as vendors or consultants who develop or implement ADS. This means that employers are responsible for any unfair treatment, even if the discrimination is unintentional since they outsource decision-making processes to external entities.
Employers Have to Keep Records
Employers will be required to maintain records for at least four years showing how these tools were used. These records include job applications, personnel files, and data from AI or ADS. These records can help during audits or investigations into potential discriminatory practices.
What This Means for You
These changes could affect you if your employer uses any kind of automated system for things like:
Hiring and Promotions: If you suspect that an AI system and/or ADS used in hiring or promotion decisions has unfairly affected you due to bias, you may have a right to take action.
Workplace Surveillance: Proposed legislation, such as Assembly Bill 1221, aims to limit how employers use AI to watch and monitor employee behavior. If passed, it would provide additional protections regarding how your employer collects and uses your data.
What You Can Do
If you believe you’ve been treated unfairly because of an employer’s use of AI or ADS:
- Document Everything: Keep records of job postings, emails, texts, or other communications, and any interactions that may support your claim.
- File a Complaint: You can file a complaint with the California Civil Rights Department (CRD), which enforces the FEHA.
- Seek Legal Advice: Consult with an employment attorney to help understand your rights and what options you have.
Stay Informed
Technology is changing fast, and so are the laws that protect workers. These new AI rules are a step toward making sure workplaces stay fair for everyone. Knowing your rights is the first step to protecting them.
