In recent years, the increasing use of automated decision systems(“ADS”) in employment practices has raised concerns over worker rights, privacy, and fairness. As AI systems become more sophisticated and widespread, the potential has grown significantly for ADS to make employment decisions—such as hiring, promotion, discipline, evaluation, and termination. In response, California lawmakers have once again proposed legislation that aims to regulate, control, and limit ADS in the workplace.
Notably, the proposed “No Robo Bosses” Act would preclude employers from relying solely on ADS to make employment-related decisions. This Act, alongside other proposed AI regulation, like AB 1018, demonstrates that employers using AI in the workplace must be cognizant of the potential shifts in California’s legal landscape.
While prior legislative efforts to curb ADS have failed, California employers should be prepared to act if the “No Robo Bosses” Act and AB 1018 pass.
The “No Robo Bosses” Act: Key Provisions
If enacted, the “No Robo Bosses” Act would impose significant restrictions on how employers can use ADSin employment-related decisions. Unlike other employment laws, the “No Robo Bosses” Act applies to all employers, without exception, including non-profits and small businesses.
- ADS Decision-Making Limits: Employers cannot rely solely on ADS for critical employment decisions, such as hiring, promotion, discipline, or termination. Instead, employers must:
- Ensure that an individual reviews ADS-driven recommendations for employment decisions.
- Base employment decisions on additional corroborating evidence, such as supervisory evaluations and personnel records.
- Notice Requirements: Employers or their vendors must provide written notice to workers if an ADS is being used to make employment-related decisions. The notice must:
- Be given at least 30 days before implementing a new ADS.
- Be updated whenever ADS usage changes.
- Include a list of all ADS in use, their purpose, and how they operate.
- ADS Use Restrictions: Employers are prohibited from using an ADS if it:
- Violates any labor, employment, or civil rights laws.
- Infers or collects sensitive worker data, such as information on immigration status, political beliefs, health, or protected class.
- Conducts predictive behavior analysis to determine a worker’s emotional state, beliefs, or intentions.
- Uses individualized worker data, unless directly tied to job tasks, to determine compensation.
- Worker Rights and Appeal Process:
- Workers have the right to access and correct data used by an ADS, ensuring employers do not misjudge employees due to inaccurate AI-driven analysis.
- Employers must notify workers when an ADS influences an employment decision.
- Workers may appeal an ADS-driven decision within 30 days, and employers must:
- Respond within 14 business days.
- Designate a human reviewer with power to overturn ADS-based decisions.
- Rectify wrongful decisions within 21 business days.
- Enforcement and Penalties:
- Retaliation against workers who challenge ADS decisions is strictly prohibited.
- The Labor Commissioner, public prosecutors, and workers can bring civil actions against employers for violations.
- Employers face penalties of $500 per violation, plus potential damages and injunctive relief.
The “No Robo Bosses” Act: Implications if Enacted
If enacted, the “No Robo Bosses” Act would significantly impact the way California employers implement ADS in the workplace.
Key implications include:
- Increased Oversight and Compliance Costs: Employers will need to invest in compliance mechanisms, including transparency measures, bias mitigation strategies, and regular audits of ADS and AI systems. This could lead to increased costs associated with ensuring that ADS comply with the new regulations.
- Potential Limitations on AI Use: Employers may find themselves restricted in the types of AI technologies they can implement. The ban on fully automated decision-making for key employment actions may require employers to rely on human involvement, reducing the speed and efficiency benefits that AI can provide.
- Improved Fairness and Transparency: The Act aims to address some of the inherent biases in AI systems, potentially leading to more equitable outcomes for workers. The Act may also increase transparency and accountability, allowing employees to better understand and challenge decisions made by ADS.
- Shift Toward Human-Centric Management Models: By requiring human oversight in ADS, employers may be encouraged to return to a more human-centric approach to management, where ADS serves as a tool to assist, rather than replace, human judgment.
Another proposed law, AB 1018, complements the “No Robo Bosses” Act by focusing on AI transparency and worker rights.
AB 1018: Complementary Legislation on AI Transparency
If enacted, AB 1018 would require that employers disclose to workers how AI technologies are used in the workplace, the types of data being collected, and how that data will be used. AB 1018 would also require that AI systems be auditable, meaning that employees or independent third parties can access information about the algorithms’ functioning and outcomes.
Best Practices for Employers to Consider
- Evaluate AI Use: Employers should audit which, if any, Human Resources functions rely on ADS (e.g., hiring, evaluating, terminating) and consider whether the “No Robo Bosses” Act would impact any of these practices. This inventory will help employers quickly implement any forthcoming notice and disclosure requirements.
- Negotiate AI Contracts: AI system providers tend to disclaim any responsibility for possible discrimination and other adverse outcomes relating to their products. Employers should carefully review these contracts and consider negotiating more favorable terms concerning AI product warranties, non-infringement, and indemnification.
- Review AI Systems for Bias: Employers should implement regular audits of AI systems to detect and address potential biases. This review includes working with experts to ensure that the AI models used are fair, impartial, and do not inadvertently discriminate against certain groups. Such diligence is essential given that employers are ultimately responsible for discriminatory or other adverse outcomes of AI use in the workplace.
- Consider Transparency and Dispute Process: To stay ahead of potential compliance requirements, employers may develop a transparency plan to clearly explain to employees how AI technologies work and what data is being collected. Employers may also implement procedures that allow workers to challenge AI-driven decisions. This could involve creating a process where employees can request a human review of AI-driven decisions, particularly in areas like promotions, discipline, or terminations.
The “No Robo Bosses” Act and AB 1018 signal a shift toward stricter regulations on AI-driven decision-making in the workplace. While these measures aim to protect workers from potential biases and lack of oversight, they also impose significant compliance burdens on California employers.
Given the fast-evolving nature of AI legislation in California, employers should monitor legal developments – including SB 7 and AB 1018 – and prepare proactively.
