By Mashable | Created at 2026-10-07 20:01:37 | Updated at 2026-10-07 21:56:42
2 hours ago
Employers in the Golden State can't offload the hard parts of running a business to AI, according to a new state law.
Signed by California Governor Gavin Newsom last week, SB 947 sets restrictions on the use of the novel technology in disciplinary decision making, including firing employees. SB 947 may sound like an obvious regulatory move as industries continue to worry about AI's impact on employment, but the "No Robo Bosses Act" marks the first law of its kind in the nation.
Other states, including California, have enacted bans on AI-enabled discrimination and laws that restrict the authority of automated systems in hiring and benefits decisions. The federal government has clarified that existing employee discrimination law also covers the use of AI systems. Still, AI remains an elusive element in modern workplace management.
What does the new law do?
Under SB 947, California employers can't exclusively rely on Automated-Decision Systems (“ADS”), including AI, to determine a worker's continued employment or disciplinary status. The bill also limits the use of AI as a "principal tool" in such decision-making.
Any use of AI must be disclosed to the affected employee, including details on personal data given to the model to determine company action.
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If an AI tool is a "primary" element of a termination decision, the law mandates that an employer provide a human reviewer who can go over the decision with an employee. The reviewer must provide additional corroborating information, such as evaluations, disciplinary records, and witness testimony.
Newsom vetoed a previous version of the bill in 2025, citing concerns that its notification terms were too broad. The initial text of the bill included mandatory advance notice, which was later struck, alongside language that would have included gig workers. Gig workers are excluded from the new law.
How will the new law affect employers?
All employers in California, no matter their size, are subject to the law.
Employers cannot continue using ADS in ways that may violate state employment law or an employee's protected status, or move forward with an ADS decision that can't be corroborated by a human.
An ADS is defined by the state 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."
If the California Labor Commissioner’s Office finds that a company has violated the law or retaliated against an employee exercising their rights under the law, the employer could face civil penalties.
The bill takes effect July 1, 2027.
