California legislators recently introduced a pair of bills that would dramatically limit that way in which employers use artificial intelligence (AI) to make employment decisions. In sum, the bills would mandate human oversight when AI is employed to fire or discipline workers, and also require extended advance notice before conducting AI-driven mass layoffs.
SB 947: The Revised “No Robo Bosses” Act
State Senator Jerry McNerney’s bill introduced a revised version of the bill that Governor Newsom vetoed last year.
Current law requires the Department of Technology to conduct a comprehensive inventory of all high-risk automated decision systems (ADS) that have been proposed for use, development, or procurement by, or are being used, developed, or procured by, any state agency. In addition, existing law establishes the Labor and Workforce Development Agency. This organization involves a number of state departments that are tasked with “protecting and promoting the rights and interests of workers in California.”
SB 947 would prohibit an employer from using an ADS to perform certain functions and would restrict the purposes for and way in which such systems are used. The bill would authorize a worker to request, and require an employer to provide, a copy of the most recent 12 months of the worker’s own data primarily used by an ADS to make a disciplinary, termination, or deactivation decision, as specified. In addition, the bill would require an employer that uses an ADS to help in making a disciplinary, termination, or deactivation decision to provide the affected worker with a written post-use notice.
Moreover, SB 947 would prohibit an employer from discharging, threatening to discharge, demoting, suspending, or in any way discriminating or retaliating against any worker for taking certain actions asserting their rights under the bill. The bill would require the Labor Commissioner to enforce the bill. It would also authorize, in the alternative, any worker who’s suffered a violation of these provisions to bring a civil action for damages, and authorize a public prosecutor to bring a civil enforcement action. The bill would provide specific relief that a plaintiff could seek and the penalties for an employer that violates the Act. This includes a $500 civil penalty and punitive damages.
Nonetheless, the essential tenant of SB 947 remains intact: employers can’t rely solely on an ADS when making a disciplinary, termination, or deactivation decision.
SB 951
State Senator Eloise Gómez Reyes (D–Colton) introduced SB 951 as a companion measure concerning mass layoffs caused by AI.
This bill, the California Worker Technological Displacement Act, would require a covered employer to provide at least a 90-day advanced written notice before any technological displacement or termination of contract affecting 25 or more workers or 25% of the workforce (whichever is less). The bill would require an employer to provide notice to affected employees, the Employment Development Department, and specified state and local entities.
“Technological displacement” means the elimination of employment positions, or a reduction in hours equivalent to 25% or more of total workforce time, within any 12-month period, caused in whole or in substantial part by the introduction of an AI system or other automated technology.
SB 951 would require a covered employer to provide a “written technology hiring disruption notice” to be provided to the Employment Development Department and specific local entities when it executes a technological reduction in hiring or cessation in hiring due to the adoption of artificial intelligence or other automating technology. The notice will have to contain all of the following information:
- The name and address of the employment site and the name, email, and telephone number of a company official;
- A statement indicating whether the planned action is permanent or temporary;
- The expected date of the first separation and the anticipated schedule for subsequent separations;
- The number, classification, and work location of layoffs substantially due to the replacement or automation by AI;
- The job functions performed by those workers that will be automated by AI;
- The AI system or other automating technology that substantially resulted in technological displacement, including the entity or entities that developed, sold, or leased the product; and
- The justification for, and purpose of, the use of the AI tool.
The term “covered employer” means any employer that employs, or has employed within the preceding 12 months, any number of workers. A “covered employer” includes, but isn’t limited to, any of the following:
- The state, including its legislative, judicial, and executive branches;
- Any city, county, or city and county, and other political subdivisions of the state;
- Special districts, including, but not limited to, school districts; and
- Any authority, commission, board, agency, or instrumentality of any entity specified in paragraphs (1) to (3).
For covered employers with more than 100 workers, this bill would allow workers impacted by technological displacement or termination of contract to a right of first bid on other positions with the company and would prohibit discharge of those workers during a 90-day period from when notice is provided.
Plus, a covered employer that fails to provide notice must provide back pay and benefits to each affected employee for a maximum of 60 days or one-half the number of days the employee was employed, whichever period is shorter. The bill would also impose a $500 civil penalty for each day of the covered employer’s violation.
The bill would also state the procedures for reporting violations to the commissioner and filing a civil action in court.
“The reach and speed at which AI is transforming our economy is astounding,” remarked Senator Reyes. “Recent announcements that tens of thousands of jobs will once again be sacrificed to automation is a stark reminder that we cannot rely on CEOs of the richest and most powerful companies in the world to protect workers and communities. Lawmakers must step in to do that work.”
Takeaway
If one or both bills become law, employers in California would be tasked with substantial new compliance requirements when using AI in employment decisions. As a consequence, employers should consider taking stock of all systems they use that potentially qualify as “automated decision systems” under this legislation.
Eanet, PC will continue to watch these bills and report on any developments.