In a first-of-its-kind move, California has finalized groundbreaking regulations that directly address the use of artificial intelligence (AI) and automated decision systems (ADS) in employment. These rules, approved by the California Civil Rights Council in March 2025, signal a clear message: while AI tools can be valuable in recruitment, hiring, and workforce management, they must not be used in ways that discriminate against applicants or employees.
These regulations are expected to take effect later this year, once approved by the Office of Administrative Law. Here’s what California employers need to know.
1. Purpose and Scope of the New Regulations
The regulations aim to ensure that the increasing use of technology in employment decisions complies with the Fair Employment and Housing Act (FEHA). In essence, the rules extend traditional anti-discrimination protections to the digital age by:
2. What Is an Automated Decision System (ADS)?
The regulations define an ADS as: “A computational process that makes a decision or facilitates human decision-making regarding an employment benefit,” including tools that rely on AI, machine learning, algorithms, or statistics.
Examples of ADS:
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