California’s No Robo Bosses Act Could Reshape Workplace AI Rules
California continues to lead the nation in shaping the rules of the road for AI in employment. One of the most consequential workplace AI laws, Senate Bill 7, known as the “No Robo Bosses” Act, has cleared both the California State Assembly and Senate, awaiting the governor’s signature. If enacted, this bill would impose sweeping new obligations on employers that utilize automated decision systems, which broadly encompass machine learning tools, algorithms, and artificial intelligence, to make employment-related decisions.
SB 7 Arrives at a Pivotal Moment
Amidst increasing demand for transparency and fairness, California’s Civil Rights Council recently finalized regulations on automated decision systems in employment, set to take effect on October 1, 2025. While these regulations focus on discriminatory outcomes, SB 7 targets procedural fairness and transparency. Together, they represent a layered compliance regime that will reshape how employers deploy technology in the workplace.
Governor Gavin Newsom has not indicated a position on SB 7, previously vetoing other AI-related legislation due to concerns over premature regulatory frameworks. However, growing public pressure regarding AI in employment decisions may make this bill more challenging to dismiss. Should it be signed, SB 7 will take effect on January 1, 2026.
Requirements of SB 7
At its core, SB 7 emphasizes visibility and accountability. Employers must notify workers and job applicants when an automated decision system is in use, ensuring that significant decisions are not made solely by machines. Key requirements include:
- Employers must provide written notice to affected workers at least thirty days before deploying an automated decision system, with a deadline of April 1, 2026, for systems already in use.
- New hires must receive notice within thirty days of onboarding.
- Transparency in hiring requires that employers disclose the use of automated decision systems at the point of application.
Notices must detail the categories of employment decisions affected, types of worker data collected, data sources, and the system’s processing methods. Employers must also disclose productivity quotas and potential consequences for noncompliance.
Crucially, SB 7 prohibits relying solely on automated decision systems for worker discipline, termination, or deactivation. If such systems guide these decisions, human review and consideration of additional evidence, including personnel files and supervisory evaluations, are mandated. Moreover, customer ratings cannot be the primary input for automated decisions, significantly impacting gig economy platforms.
Worker Rights and Data Access
Workers will have the right to request a copy of their personal data used in decisions involving discipline or termination. Employers must provide this data annually, ensuring anonymity to protect the identities of other individuals.
Enforcement and Exceptions
SB 7 establishes various enforcement mechanisms, allowing the Labor Commissioner to investigate complaints, while public prosecutors can initiate civil actions. Workers may seek injunctive relief, punitive damages, and attorney’s fees through private lawsuits, with civil penalties of $500 for violations.
Limited exemptions apply for employers under existing collective bargaining agreements that explicitly waive coverage and include provisions addressing wages and working conditions. The bill acknowledges that some employers may be required to use automated decision systems under federal law.
A New Layer: Civil Rights Council Regulations
SB 7 coincides with the California Civil Rights Council’s final regulations on automated decision systems, which prohibit discrimination based on protected characteristics. These regulations emphasize the employer’s responsibility to prevent adverse impacts and offer reasonable accommodations.
Unlike SB 7, the Council’s regulations do not require notices or data access rights, focusing instead on outcome-based accountability enforced through administrative complaints.
A Combined Compliance Challenge
Should SB 7 become law, employers will face a dual compliance challenge, ensuring that automated decision systems are used transparently while also preventing discriminatory outcomes. This dual approach necessitates continuous testing and monitoring of these systems.
What Employers Should Do Now
Regardless of the bill’s outcome, employers should take proactive steps, including:
- Inventorying all automated decision systems currently in use, covering scheduling software and AI-enhanced screening tools.
- Drafting plain-language notices for compliance with SB 7’s requirements, reviewed by legal counsel.
- Establishing protocols for human oversight in significant decisions.
- Training managers and HR professionals on both sets of rules to mitigate regulatory risks.
Parting Thoughts
California’s legislative advancements reflect a growing demand for transparency, fairness, and human judgment in algorithmic management. Employers who prepare now will be better positioned to adapt to emerging regulations, not only in California but across the nation.
The bots may not be taking over, but regulatory scrutiny is certainly on the rise.
