California AI employment regulations proposed by the California Civil Rights Council are now in effect regarding the use of artificial intelligence (AI) and automated-decision systems (ADS) in recruitment, hiring and personnel decision-making.  These systems are increasingly used by employers to improve efficiency, and it is critical that employers understand their compliance obligations related to the regulations, which became effective October 1, 2025, under the California Fair Employment and Housing Act (FEHA).

About the California Civil Rights Council AI Regulations for Employers

The new AI regulations clarify that an employer’s use of automated systems to facilitate employment decisions may violate California employment law if employees or applicants are harmed on the basis of protected characteristics.  They also assert that existing laws regarding discrimination apply to employers’ use of AI and ADS when making employment-related decisions.

Employers must take proactive steps to ensure the systems they are using are tested and monitored for potential bias, and that they, and any third-party vendors, are otherwise compliant with the updated regulations.

AI and ADS under the California Civil Rights Council AI Regulations

The updated employment regulations define an automated-decision system as “a computational process that makes a decision or facilitates human decision making regarding an employment benefit . . . derived from and/or using AI, machine-learning, algorithms, statistics, and/or other data processing techniques.”

An AI system is defined as a “machine-based system that infers, from the input it receives, how to generate outputs.”

Technology employers may be using that are subject to the updated California AI employment regulations include tests, assessments, and tools that perform as follows:

• Predict an applicant or employee’s potential;
• Evaluate a job applicant’s skills, abilities, personality traits, attitudes and other qualities;
• Filter, categorize or recommend applicants or employees;
• Target specific groups to receive information about available positions and/or recruiting;
• Identify patterns or screen for specific terms in resumes;
• Analyze personal characteristics in video interviews; and
• Analyze applicant or employee data provided by third parties.

What Are California Employers Required To Do?

To comply with California’s AI employment regulations, employers covered under the Fair Housing and Employment Act must take steps to ensure that they, as well as their vendors and partners, are not using systems that may directly or indirectly harm or create a disparate impact for individuals with characteristics protected under the law.  Lack of intent to discriminate or inadequate knowledge of the mechanisms used by an artificial intelligence or automated-decision system are not sufficient defenses if discrimination occurs or is alleged as a result of the use of that system.

Employers must implement procedures to evaluate, audit and regularly test any AI or ADS systems they use to make employment-related decisions.  They must notify applicants and employees of the use of AI and ADS systems, providing details about how the tools are used, rights to opt out and options to request accommodations or appeal decisions.

The updated regulations also extend the timeframe for which employers are required to retain personnel and employment records, including those related to AI or ADS systems.  Employers are now required to maintain and preserve these records for four years, rather than the previous requirement of two years.

Employer Best Practices Regarding California AI Employment Regulations

Employers should take proactive steps to prevent bias and discrimination arising from the use of AI and ADS in employment decisions.  When claims of discrimination arise, employers who have crafted and consistently implemented policies and procedures to prevent it are much better positioned to defend themselves.

Best practices to ensure compliance with California AI employment regulations include the following:

• Train human resources staff and company leaders to understand the fundamentals of AI and ADS, the specific systems used and the potential for bias;
• Test and audit systems for bias;
• Regularly monitor systems for potential issues and thoroughly address any concerns that arise;
• Document policies, procedures and steps taken to detect and prevent bias in AI and ADS systems;
• Ensure human oversight and input related to systems and the decisions they make or inform; and
• Evaluate third-party vendors and partners to ensure compliance.

Contact the Law Offices of Susan A. Rodriguez for Help

Los Angeles employer defense lawyer Susan Rodriguez has more than 30 years of experience counseling and defending California employers in various areas of the law.  She assists employers in creating policies and procedures to mitigate potential bias and discrimination.  When claims arise, Susan provides the trusted legal defense employers need.

To schedule a consultation to discuss compliance with California AI employment regulations or other employment law matters, call the Law Offices of Susan A. Rodriguez, APC at (323) 272-3954 or complete this online contact form.

Posted by Susan A. Rodriguez, Esq.

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