As of Oct. 1, California employers face new legal responsibilities under amendments that extend anti-discrimination protections to decisions made by or with the help of AI. The updated rules explicitly hold employers accountable for any discriminatory outcomes linked to AI-driven tools used in hiring, promotion, or evaluation — without exemptions for small businesses.
Legal experts warn that the biggest compliance risk lies not in using AI itself, but in failing to monitor how it influences human judgment. Employers must now store and retain data related to AI employment decisions for at least four years, maintain detailed documentation, and treat AI outputs with the same scrutiny as employee decisions.
This is just one recent news development in California. Here is a look at other news and trends in the state.
SHRM Testifies About AI
At a California Senate hearing on Oct. 23, SHRM and other experts testified on how AI is transforming the workplace, emphasizing both its risks and opportunities. Lawmakers discussed the need for ethical oversight and policies to prevent AI from eroding trust or displacing workers. SHRM's Tara Fournier, SHRM-SCP, deputy director of the SHRM California State Council, highlighted AI's potential to make hiring more inclusive and efficient, noting that 43% of organizations now use AI for HR activities.
Cal-WARN Updates
With ongoing layoffs and facility closures across California, employers are reminded of their legal duty to provide advance notice under the federal and state Worker Adjustment and Retraining Notification (WARN) Acts. Both laws generally require at least 60 days’ notice before certain workforce reductions, though they differ in how they define covered employers. Under California’s version (Cal-WARN), the rule applies to facilities with 75 or more employees at a single site. Recent court rulings have reinforced that separate worksites typically cannot be combined to meet the 75-person threshold unless they are adjacent and highly integrated. Legislative efforts to change this single-facility rule continue — Gov. Gavin Newsom vetoed one such bill in 2023, but new updates like Senate Bill 617, signed Oct. 1, expand the information employers must include in Cal-WARN notices.
‘No Robo Bosses Act’ Vetoed
Newsom has vetoed Senate Bill 7, known as the “No Robo Bosses Act,” which would have placed strict limits on how employers use AI in workplace decisions related to discipline, termination, and scheduling. Newsom argued the bill was overly broad, duplicative of existing regulations, and potentially burdensome for businesses — particularly smaller employers.
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