AI Spotlight: New Laws for California Employers

Governor Newsom recently signed a package of Artificial Intelligence and technology related bills, describing California as having a nation-leading AI framework. For California employers, the new laws create important rules about how employers can use AI and automated technology in the workplace, from employment decisions to workplace surveillance and AI-driven workforce reductions. Let’s break down what these new requirements mean for you.

At a high level, these new bills are aimed at:

• Ensuring real people review automated employment actions by prohibiting employers from only relying on AI when making a disciplinary action or termination decision
• Providing more transparency by requiring employers to disclose if a mass layoff, relocation, or termination is caused by an AI system
• Protecting employee privacy by banning the use of workplace surveillance tools by employers in a bathroom located in the workplace

SB 947 Automated Decision Systems

This bill may sound familiar because Governor Newsom vetoed a similar version of it last year. SB 947 is known under the “cute” name, “No Robo Bosses Act of 2026,” and ensures human oversight in the workplace.

Starting July 1, 2027, it will regulate an employer’s use of automated decision systems (ADS), including artificial intelligence tools, used to make disciplinary or termination decisions.

Key Prohibitions

Employers cannot solely rely on an ADS to make a disciplinary or termination decision. For example, it would be prohibited to use an AI system that monitors workers for productivity and automatically terminates them if they fall below a required threshold.

The law also bans systems used to infer an employee’s protected status or to predict and take adverse action against a worker for exercising legal rights, among other prohibitions.

Discipline/Terminations Primarily Relying on ADS

When an employer primarily relies on an ADS to make a discipline or termination decision, a human must review and corroborate the decision, and provide written notice to the employee informing them of ADS reliance. Employees have a right to obtain the data the system relied on, upon request.

For example, let’s say an employer uses software that tracks an employee’s keystrokes & response times, and the system gives the employee a “low productivity” score. HR intends to primarily rely on the score to issue the employee a final written warning. A human must first review the decision and corroborate it, using information the ADS gathered or other relevant material, such as personnel file documents, supervisor evaluations, peer or customer feedback. If the information cannot be corroborated, or if it’s determined it was inaccurate, misleading, or incomplete, the employer cannot use it to make the decision.

A stand-alone “post-use” written notice must be provided at the time the discipline/termination decision is communicated to the employee, identifying reliance on the ADS and other specific information.

Violations may result in a civil penalty of up to $500 per violation.

Employers should prepare post-use notice templates and forms to corroborate the decision when relying on ADS for disciplinary action and terminations. CEA will develop sample forms for our members before the law becomes effective.

SB 951 Cal/WARN & Technological Displacement:

SB 951 expands information required in Cal-WARN notices when a mass layoff, relocation, or termination is due to AI displacement or automation.

The law does not expand when Cal/WARN notification is triggered. Rather, when Cal/WARN already applies, it requires employers to identify when a mass layoff, termination, or relocation was caused in whole or substantial part from artificial intelligence or automation replacing positions. When that is the case, the notice must additionally include:

• Statement at the top: “This notice is for a technology displacement”
• The number, classification or occupation, & work location of the layoffs
• Job functions that will be automated
• Type of AI system or technology

The EDD will publish summaries of technology-displacement notices.

AB 1883 & AB 1331 Workplace Surveillance 

AB 1883 prohibits employers from using workplace surveillance tools that use artificial intelligence to collect “neural data,” or make inferences about a worker’s emotional state. “Neural data” is information that measures a worker’s central or peripheral nervous system. AB 1331 prohibits monitoring or surveilling employees in a workplace bathroom, and gives employees the right to leave workplace surveillance tools behind when entering bathrooms, such as a GPS tracking device. The law includes limited exceptions.

While AI and technology got a spotlight this past legislative session, many other important new laws are impacting California workplaces and handbook policies. Join CEA at our annual Labor Law Update, where we cut through the legalese and make sure you get the clarity you need. This event is free for CEA members on December 3, 2026!