California lawmakers have taken a significant step forward in regulating the use of artificial intelligence (“AI”) in the workplace by passing SB 7, a bill aptly referred to as the “No Robo Bosses” Act. If Governor Newsom signs the bill into law—a decision he must make by September 30, 2025—SB 7 would take effect on January 1, 2026 and would have an immediate impact, including prohibiting employers from relying solely on AI to make decisions regarding employee discipline or termination. Below, we highlight the most salient aspects of SB 7 and make some recommendations for employers going forward, if Governor Newsom signs the bill into law.
What AI Tools are Covered?
SB 7 uses the term “automated decision systems” or “ADS” to define AI tools as:
[A]ny 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 decisionmaking and materially impacts natural persons.
This definition covers a broad range of tools, including commonly used AI tools, such as resume scanners, but adds several other broad categories of AI, such as: (1) keystroke or computer system monitoring tools; (2) tools that analyze voice or text (which can be used to analyze interviews or rate employee performance); (3) performance tracking tools; (4) scheduling assistant tools (including in connection with...
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