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October 21, 2025
The California Civil Rights Council (CRC) enacted new regulations – effective October 1, 2025 – to prevent discrimination in employment caused by using artificial intelligence (AI) and other automated decision systems (ADS). The regulations apply to all California employers and define an ADS as any computational process that makes a decision or facilitates human decision-making regarding an employment benefit, such as screening resumes, conducting assessments, or analyzing employee data. The definition includes systems that use AI, machine learning, and algorithms.
The new regulations explicitly prohibit using an ADS that discriminates against job applicants or employees based on protected characteristics under the Fair Employment and Housing Act.[1]
The regulations also expand liability to include third-party vendors who develop or use ADS systems on behalf of employers and require employers to maintain records related to ADS for a minimum of four years.[2]
California Employer Takeaways: If you are using an ADS for employment decision- making, regularly perform anti-bias testing or similar proactive efforts to avoid unlawful discrimination. The CRC’s regulations provide that such testing/effort is an affirmative defense to a claim of discrimination. The regulations identify six key elements of such testing, including the test’s: (1) quality; (2) efficacy; (3) recency; (4) scope; and (5) results, as well as (6) the employer’s response to the results.
The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in Pennsylvania, California, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issues.
[1] The California Fair Employment and Housing Act protects individuals from discrimination based on the following protected characteristics: race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, sexual orientation, age (40 and over), military and veteran status, and reproductive health decision-making. The statute also includes protections for traits historically associated with race, such as hair texture and protective hairstyles. Additionally, it prohibits discrimination based on the intersectionality of protected characteristics and off-duty cannabis use under certain conditions.
[2]The CRC’s regulations are different than the No Robo Bosses Act (Senate Bill 7), which California Governor Gavin Newsom vetoed on October 13, 2025. Senate Bill 7 sought to prevent employers from relying solely on an ADS to discipline or fire workers and would have required employers to provide notice to employees of AI use. Governor Newsom expressed concern that the Bill’s restrictions were too broad and sought to impose complex notification requirements even for the most common digital tools. He also noted that other state agencies, including the CRC and the California Privacy Protection Agency, were already finalizing their own AI regulations.
