Employers increasingly rely on automated tools to help make decisions concerning hiring, promotion, discipline, and termination. In response, state legislatures and agencies have begun to regulate uses of these technologies, often referred to as automated decision-making technology (“ADMT”). These laws generally require entities that deploy ADMT in the employment context to, among other requirements, notify affected individuals, disclose how ADMT factors into decisions, and provide rights to appeal or request human review.
This remains a fast-moving area and a hot topic for legislative and regulatory focus, with several states enacting laws this year and additional bills pending. Below, we summarize the key legislative and regulatory ADMT developments that apply in the employment context.
California ADMT and Pending Legislation
In 2025, the California Privacy Protection Agency approved regulations governing the use of ADMT for “significant decisions” concerning consumers, including job applicants, employees, and independent contractors. Pursuant to these rules, beginning January 1, 2027, employers that use ADMT for a “significant decision” (a decision resulting in the provision or denial of employment or independent contracting opportunities including hiring, allocation of work, compensation, and termination) must provide pre-use notice, offer individuals the ability to opt out, and conduct a risk assessment, among other requirements, unless an exception applies. For a...
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