New AI Employment Rules in California Aim to Protect Workers from Discrimination

Finally, the California Civil Rights Council has gotten official approval for its long-awaited rules concerning employers’ use of automated-decision systems (ADS) such as artificial intelligence (AI). Starting from October 1, 2025, the state will implement the new regulations, which are aimed at protecting employees and job seekers from discrimination caused by AI and automated decision-making tools used by employers. These rules, officially approved by the Office of Administrative Law in late June, make California one of the first states to take concrete steps towards regulating the use of AI in the workplace.

Why Do These Regulations Matter?

Many employers today depend on technology like AI, algorithms, and automated systems to make critical employment-related decisions such as recruitment, hiring, promotions, and disciplinary actions. Indeed, these tools can help save time and improve efficiency. However, the use of these tools poses significant risks. If these systems are not designed and monitored carefully, they can exacerbate existing biases and contribute to discriminatory outcomes.

For example, an algorithm may inadvertently favor specific resumes based on historical data patterns, such as gender or ethnicity, leaving qualified candidates out. This form of discrimination often happens subtly and without clear warning signs, making it hard for workers to identify and challenge. The new regulations aim to address this issue. The rules clearly state that employers cannot use AI or other ADS that discriminate against employees or job applicants based on protected characteristics, such as gender, race, age, disability, or religion, under the Fair Employment and Housing Act (FEHA). 

Definitions Under the New Rules

The new rules provide the following important definitions that both employers and employees need to understand;

• Artificial intelligence (AI): A machine-based system that uses input data to generate outcomes such as decisions, recommendations, and predictions.
• Automated decision system (ADS): Any computer-based process used to make decisions or help humans make employment-related decisions, such as AI, algorithms, and machine learning.
• Machine learning: A type of AI in which a computer learns from data or experience and applies what it learns in future decisions.
• Automated decision system data: Any data used to develop or customize the technology used by a specific employer.
• Agent: Anyone acting on behalf of an employer (directly or indirectly) is considered an “employer” under these regulations. So, an employer is still responsible even if they use an outside company to handle hiring or HR tasks using automated tools.

Key Points from California’s New AI Employment Rules

The following are the key points under the new AI employment rules;

• The use of automated decision systems that cause discrimination is prohibited, unless the employer can show that the system is necessary for the job and allows for accommodations.
• ADS is illegal if the technology or algorithm filters out candidates based on availability.
• Where AI tools assess traits such as movement, reaction time, facial expressions, and voice, employers must offer alternative evaluations or reasonable accommodations, as such tools may disadvantage applicants with disabilities.
• Employers are liable for discrimination caused by third-party vendors.

What Does This Mean for You as a Worker or Job Applicant?

If you are an employee in California or looking for a job, these new regulations mean that an employer can’t rely on biased technology when making job-related decisions. If an AI tool or another automated system discriminates against you, you may have legal rights under FEHA.

Contact a California Employment Lawyer

Contact a California employment lawyer if you have questions or believe an AI tool or another automated decision system has treated you unfairly.