The “No Robo Bosses Act” (SB 7), which aims to regulate the use of automated decision systems (ADS) in the workplace, is currently sitting on Governor Newsom’s desk waiting for signature or veto by end of month.  The bill is a new approach to the state regulating AI in the workplace. Although Governor Newsome has not indicated whether he would sign or not, if he did, the law would be effective January 1, 2026.

The focus of the bill is to provide applicants and employees with transparency and accountability.  The bill requires employers to notify workers and job applicants when an automated decision system is in use and to ensure that high-impact decisions are not made by machines alone. Under the requirements of the bill, employers would be required to give written notice to any worker who is likely to be affected by the use of an automated decision system, excluding hiring-related systems, at least 30 days before deployment. For systems already in use when the law takes effect, employers would have until April 1, 2026, to provide notice. New hires must receive notice within 30 days of onboarding. 

Also, the law applies to contractors as well. "Worker" is defined in the bill to include "any natural person who is an employee of, or an independent contractor providing service to, or through, a business" or state and local governments.”

The term “automated decision systems” or “ADS” to define AI tools as:

“any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decision-making and materially impacts natural persons.”

This definition covers a broad range of tools, including commonly used AI tools, such as resume scanners, but adds several other broad categories of AI, such as: (1) keystroke or computer system monitoring tools; (2) tools that analyze voice or text (which can be used to analyze interviews or rate employee performance); (3) performance tracking tools; (4) scheduling assistant tools (including in connection with just-in-time scheduling protocols); and (5) training programs or protocols that rely on AI to assess or score performance, among others. Any employer that uses an AI tool to assist with any aspect of the employment lifecycle, e.g., hiring, performance evaluation, discipline, promotions, terminations, etc. should assume this is an ADS tool.

The term “employment-related decision[s]” is defined as “any decision … that materially impacts a worker’s wages, benefits, compensation, work hours, work schedule, performance evaluation, hiring, discipline, promotion, termination, job tasks, skill requirements, work responsibilities, assignment of work, access to work and training opportunities, productivity requirements, or workplace health and safety.”  The definition is extremely broad and pretty much covers all decisions made in the applicant and employee lifecycle. 

The Bill ensures that human decision making is part of any ADS process. The Bill states that employers may not rely solely on an ADS when making a discipline, termination, or deactivation decision. “Deactivation” is a term often used in the gig economy to refer to a termination and literally references a company “deactivating” an employee’s access to the company’s systems. In addition, employers may not use ADS tools to: (1) prevent compliance with or violate the law; (2) infer a worker’s protected status (e.g., race, gender, national origin, etc.); (3) collect worker data for a purpose not disclosed under the specific SB 7 notice requirements; or (4) “[i]dentify, profile, predict, or take adverse action against a worker for exercising their legal rights” (i.e., retaliate against workers).

There are two types of notices: Pre-Use and Post-Use. For pre-use notice, all employment-related decisions except hiring (which has a separate set of notice requirements), employers must: (1) deliver notice at least 30 days before an ADS is used (or by April 1, 2026 if an ADS is already in use) and within 30 days of hire for new workers; (2) provide notice in writing as a “separate, stand-alone communication” in the same manner by which other information is provided to workers; and (3) provide notice through a “simple and easy-to-use method,” such as email, hyperlink or other similar format. In the hiring context, employers must notify job applicants whether an ADS will be used in making any hiring-related decisions. The notice at the hiring stage must include:

The type of employment-related decisions potentially affected by the ADS.

• A general description of the categories of worker input data the ADS will use, the sources of worker input data, and how worker input data will be collected.
• Any key parameters known to disproportionately affect the output of the ADS.
• The individuals, vendors, or entities that created the ADS.
• A description of the worker’s right to access and correct the worker’s data used by the ADS.
• An anti-retaliation notice.
• If applicable, a description of each quota set or measured by an ADS to which the worker is subject.
• In terms of timing, employers can either provide the required notice upon receiving a job application from a candidate or include the notice on a job posting

A Post-Use notice is where an employer primarily relied on an ADS to make a “discipline, termination, or deactivation” decision. Specifically, at the same time the employer notifies the employee of the employment decision (i.e., the discipline, termination, or deactivation), the employer must also provide a written notice (in plain language and as separate, stand-alone communication), that must include: 

• The “human” to contact for more information about the employment decision and the ability to request a copy of data relied upon in the decision.
• That the employer “used an ADS to assist the employer in one or more discipline, termination, or deactivation decisions with respect to the worker.”
• The worker has the right to request a copy of the worker’s data used by the given ADS.
• An anti-retaliation notice. 

There is no individual cause of action under this law, though it is unclear whether a PAGA action can be based on it.  Violations carry a civil penalty of $500 per violation, and the law may be enforced by the Labor Commissioner or local prosecutors. 

For employers with operations in California, it is recommended once signed, but even if not, get with legal counsel to conduct an audit of and process map all HRIS systems to determine the extent of your ADS.  What this means is that all systems should be cataloged that generate scores, classifications, or recommendations affecting employees, including ADS used in hiring.  Further, compliant notices must be prepped if the law comes into effect. The whole law is centered on notice.

Finally, HR should establish clear internal procedures that allow employees to access and correct their data used in ADS-driven decisions as well as train HR representatives or other employees to serve as “human reviewers” in situations where ADS output informs decisions regarding discipline, termination, or deactivation. Lastly, HR should document protocols for how these reviewers will consider additional relevant information before finalizing decisions.

Source: Law360 9/19/25, Mintz 9/19/25, Forbes 5/19/25, Fisher Phillips 9/15/25