Statute requires human corroboration, written notice when AI drives discipline
The law bars companies from using “automated decision-making systems” as the sole basis for disciplinary actions or terminations. When an employer “primarily” relies on such a system, a human must corroborate the decision using additional information — including evaluations from managers, reviews from peers and personnel files.
Workers must also receive written notice that AI was “primarily used” in disciplinary actions and firings, a description of the data on the employee that the system used, and a human contact who can be reached to discuss the decision further.
In a letter to Newsom last month, Robert Singleton of the California Chamber of Progress warned that the bill’s central trigger — when an employer “primarily relies” on an automated decision system — is not defined in the statute. “The bill’s obligations generally apply when an employer ‘primarily relies’ on an automated decision system, but that critical term is never defined,” Singleton wrote. “Employers are given no objective standard for determining when a technology has moved from merely informing a decision to being a primary basis for it.”
Singleton added that uncertainty about whether ordinary tools qualify as regulated automated decision systems “could discourage employers from using technologies that improve consistency, identify safety risks, or help managers make better-informed decisions.”
State Sen. Jerry McNerney, a Democrat and the bill’s author, told CNBC that “no worker should ever be fired or disciplined by a machine, AI or not.” McNerney added: “Artificial intelligence systems have the potential to boost productivity, but they’ve also made errors and misjudgments and exhibited bias.” McNerney first introduced the legislation last year after a push by organized labor in California to guard against the ability of management to use AI to take adverse actions against workers.
California Federation of Labor Unions President Lorena Gonzalez framed the signing as a victory for organizing. “When working people organize, we get results,” she said in a statement. “Workers across California have demanded that our state lead the way in regulating AI in our workplaces. And today, we see that begin to happen.” She added: “Today, California’s workers and our unions have changed the national narrative on how Americans can fight back and win against AI taking over our jobs and workplaces.”
The bill’s path to Newsom’s desk took more than a year. A year ago, Newsom vetoed the legislation even after it passed both houses of California’s legislature with broad majority support. He cited a requirement for businesses to alert employees in advance when an AI system was being used that could impact work conditions.
McNerney reintroduced the bill in February after removing the pre-notification language. The change was designed to extend the legislation’s protections to gig workers, following criticism from Uber Technologies and Lyft. Even after the changes, business leaders in the state rallied against the bill leading up to its adoption.