The two new laws build on other recent AI-in-employment developments including updated regulations addressing the use of AI, machine learning, algorithms, statistics and other automated-decision systems used to make employment-based decisions.
As artificial intelligence races forward, California employment law sprints alongside. Two new employment-related AI bills have been signed into law imposing new requirements on California employers using AI and automated technology in the workplace.
Senate Bill 947, which takes effect July 1, 2027, imposes requirements on employers using automated decision-making (ADS) to make decisions about employee discipline or termination and levies penalties on violators. The new law also allows impacted employees to learn about the data used in making decisions about them. Senate Bill 951 goes one step further, requiring certain employers whose use of AI or other ADS is in part to blame for layoffs, relocations or terminations to provide information to impacted employees. This new law further requires the California Employment Development Department (EDD) to publish notices received from employers and report on the impacts of AI in hiring.
The two new laws build on other recent AI-in-employment developments including updated regulations addressing the use of AI, machine learning, algorithms, statistics and other automated-decision systems used to make employment-based decisions (see our October 2025 Alert). The legislation complements California’s new AI Unemployment Tracker, which provides sector-level information on where AI-related displacement, hiring shifts or workforce changes may be emerging (see our July 2026 Alert). The new bills also follow a California executive order issued in May 2026, directing a sweeping set of state-level actions aimed at studying, managing and mitigating the workforce impacts of AI and other emerging technologies (see our May 2026 Alert).
SB 947 – Automated Decision Systems in the Workplace
All employers in California, regardless of size, are subject to Senate Bill 947, which addresses automated decision-making in employment. The bill, popularly referred to as the “No Robo Bosses Act” and which had been approved by the California Legislature but vetoed by Governor Gavin Newsom in 2025, passed in 2026 and was signed into law on September 30, 2026.
Employer Do’s and Don’ts – What the Bill Prohibits and Requires
No ADS to Discriminate or Retaliate
Beginning July 1, 2027, California employers may not use an ADS to (1) prevent compliance with or violate labor, occupational health and safety, employment or civil rights law; (2) infer an employee’s protected status under California’s Fair Employment and Housing Act; or (3) predict and take adverse action against a worker for exercising legal rights. ADS is defined broadly as “any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decision-making and materially impacts natural persons.” Spam filters, firewalls, antivirus software, identity and access management tools, calculators, databases and datasets are excluded.
Human Oversight of Discipline and Termination
The new law forbids employers from relying solely on an ADS when making a disciplinary or termination decision. If the employer primarily relies on ADS output, it must direct a human to corroborate the decision using data collected or used to produce the output or other relevant corroborating information. The corroborating data can include evaluations by supervisors or managers, personnel files, employee work product, peer reviews or witness interviews (which may include relevant online customer reviews). If the ADS output used in the decision-making cannot be corroborated, or if the human reviewer concludes it is inaccurate, incomplete or misleading, the employer may not use it for the decision.
Required Notice to Employee
An employer that primarily relies on an ADS for a disciplinary or termination decision must give the employee a written, stand-alone notice with specific requirements at the time it informs the employee of the decision.
Employee’s Right to Description of Data
When an employer has primarily used an ADS to make a disciplinary or termination decision, the employee may request, and the employer must provide, a “meaningful, objective description” of the employee’s own data used by the ADS. Information about customers, other employees or other individuals that may appear in the data must be anonymized.
No Retaliation
Employers may not discharge, threaten, demote, suspend or otherwise discriminate or retaliate against employees for exercising or attempting to exercise their rights under the new law, or who file a complaint or cooperate in an investigation.
Enforcement, Attorney’s Fees, Penalties and Burden of Proof
The California Labor Commissioner’s Office may investigate alleged violations, order temporary relief during an investigation, issue citations and file civil actions. The law also enables public prosecutors to pursue violators. The new law provides for injunctive relief, punitive damages, attorney’s fees and civil penalties of $500 per violation. If it is shown that an ADS was used to make a disciplinary or termination decision, the employer has the burden of proving that it did not primarily rely on the ADS or that it complied with the corroboration and notice requirements. The new law also contains certain exceptions for parties covered by collective bargaining agreements and for select national airspace, security, military, space or defense purposes.
SB 951 – Cal/WARN Act: Technology Displacement Notices
In addition to following the new requirements when using ADS in making disciplinary and termination decisions, under a separate bill, California employers must also provide notice to employees in certain circumstances if their terminations are driven by AI adoption or automation.
California’s existing Worker Adjustment and Retraining Notification Act (Cal-WARN Act) requires employers provide certain notices to employees affected by mass layoffs, relocations or terminations. The Cal-WARN Act requires 60 days’ written notice to affected employees, to the California EDD, the local workforce development board and local chief elected officials. Notices must include federal WARN elements, information on rapid-response coordination with the local workforce board, CalFresh information and an employer contact (see our October 2025 Alert).
Under the new law, when a mass layoff, relocation or termination is caused in whole or in substantial part by an AI system or other automated technology replacing or automating employment positions, the employer must add to its Cal/WARN notice: (A) the number, classification or occupation, and work location of layoffs substantially due to AI or automation; (B) the job functions of the replaced workers that will be automated; (C) the specific category or type of AI or automating technology that substantially resulted in the displacement; and (D) a specific statement reflecting that the notice is for a technology displacement.
The EDD must publish summaries of these notices with its regular Cal/WARN data and post a quarterly statewide summary of technology displacements. SB 951 also requires the EDD to report to the Legislature by January 1, 2028, on AI’s effects on business hiring.
What These Two New AI Laws Mean for Employers
As employers increasingly adopt artificial intelligence tools to gather and synthesize information and to make decisions about their workforces, it is more important than ever to know and understand new laws designed to protect impacted workers. To reduce the risk of potential claims and heavy penalties, employers who use AI or ADS technology may wish to consider the following practical suggestions:
- Build an inventory of ADS and AI tools you are using in the workplace.
- Understand the tools, information going in, output, how decisions are made and whether the tool and/or a human is involved in the process.
- Evaluate how your business or organization makes decisions about discipline, and termination in particular. Evaluate criteria used to make those decisions and analyze your organization’s policies and procedures. Consider the use and extent of human beings in the process.
- Create policies and procedures for employees requesting AI or ADS information.
- Prepare notices to address discipline and termination decisions made with AI or ADS.
- Carefully consider reductions in force. If AI or other automated technology replace or automate the position, or are partly to blame, modify required notices.
- Evaluate your vendors. Question whether they use AI or ADS in providing services and the impact on your business. Consider questionnaires and potential amendments to vendor contracts to address risk.
- Retain evidence of compliance.
About Duane Morris
Duane Morris attorneys will present more on these developments, upcoming AI-related privacy laws and other new considerations for employers during our upcoming California Employment and Immigration Law Webinar scheduled for November 2026. Stay connected with us for details.
For More Information
If you have questions about this Alert, please contact Lorraine Ocheltree, Rocio Hernandez, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
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