Topics: AI in the Workplace, Personnel Policies and Procedures

By: Linda Wang

It is no surprise that businesses are seeking ways to utilize AI to increase efficiency, including developing automated decision-making systems to assist in hiring and promotion processes. The California Civil Rights Council is actively working on new laws to address potential employment discrimination based on protected characteristics when using AI in personnel decisions. This includes considerations of whether facially neutral factors (e.g., criminal history) may still constitute discrimination.

On February 7, 2025, the Civil Rights Council published its second round of modifications to proposed employment regulations regarding automated decision systems. For employers in the process of implementing AI to make personnel decisions, here are some notable changes to keep in mind:

• The new definition of an "agent" has been expanded to include any person acting on behalf of an employer, directly or indirectly, to exercise a function traditionally exercised by the employer or any other FEHA-regulated activity. This may include recruitment, applicant screening, hiring, promotion, or other decisions regarding pay, benefits, or leave, including when such activities and decisions are conducted in whole or in part through the use of an automated decision system. This broad definition aims to cover both employers and any third parties assisting employers with AI systems.
  
• Employers may bear a higher...

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