The “No Robo Bosses” Act (SB 7): How California’s New Bill Targeted at AI Could Impact the Workplace

Topics: AI in the Workplace, Personnel Policies and Procedures

The newly introduced “No Robo Bosses Act” seeks to regulate the use of AI in the workplace and prevent automated decision-making processes in employment decisions. For employers, understanding the implications of this bill is essential to maintaining compliance and minimizing legal risks, especially as AI becomes increasingly integrated into workplace practices. If enacted, SB 7 would have an immediate impact on employers using AI for workforce management.

California State Sen. Jerry McNerney, who introduced the bill, helped set federal AI policy while he previously served in Congress, where he co-founded the Artificial Intelligence Caucus and authored the AI in Government Act. “Businesses are increasingly using AI to boost efficiency and productivity in the workplace. But there are currently no safeguards to prevent machines from unjustly or illegally impacting workers’ livelihoods and working conditions,” Sen. McNerney said. However, we noted that the California Civil Rights Division is currently considering similar regulations regarding automated decision-making systems (“ADS”). See our prior blog and the status of proposed regulations.

The bill seeks to stop California employers from relying solely on ADS for critical workplace decisions—like hirings, terminations, disciplinary actions, and promotions. Under SB 7, “worker” means any person who is a job applicant to, an employee of, or an independent contractor providing service to, or through, a business or a state or local governmental entity in any workplace. Therefore, it would apply to job applicants and independent contractors, not just employees.

The bill defines an ADS as any computational process that uses machine learning, statistical modeling, data analytics, or artificial intelligence to produce simplified outputs—such as a score, classification, or recommendation—that assist or replace human decision-making and materially impact individuals. However, common workplace technologies were omitted from the definition, such as spam email filters, firewalls, antivirus software, and identity management tools.

In terms of enforcement, SB 7 would prohibit an employer from discharging, threatening to discharge, demoting, suspending, or in any manner discriminating or retaliating against any worker for taking certain actions asserting their rights under this Act. In addition, it would require the Labor Commissioner to enforce its provisions and would authorize a public prosecutor or any worker who has suffered a violation or their representative to bring a civil action.

If the bill is signed into legislation, California employers would need to take steps to ensure compliance in several ways, including but not limited to:

1. Human Oversight Requirement: Employers would need to ensure that any employment decision influenced by AI also passes through meaningful human review. AI cannot be the sole source of employment-related decisions under SB 7.
2. Transparency: Employers would be required to notify employees, in writing, when AI tools are being used in decision-making processes. The bill would further require the employer to maintain a list of all ADS currently in use and would require the notice to include the updated list. This could necessitate revising employee handbooks and updating onboarding procedures to include AI usage disclosures.
3. Data Privacy: Employers must ensure that data used in AI-decision making is handled responsibly and securely.
4. Predictive Behavior Analysis: If AI-driven decisions result in disparate impacts on protected classes, employers could face discrimination claims. Implementing robust auditing processes of ADS and conducting regular bias testing will be essential to mitigate this risk.
5. An ADS cannot obtain or infer information about an employee’s immigration status, ancestral history, health history, credit history, or other statuses protected by state law: Employers would need to implement protections in their ADS in this regard.
6. Enhanced Training for Employees: Employers may consider additional specific training on AI and provide procedures to oversee AI-driven decisions.
7. Appeals: Employees would have opportunity for appealing decisions made by an ADS. Employers would need to work on an appeals process.

As AI continues to gain traction across industries to improve efficiencies and reduce costs, it is important for California employers to proactively assess their current practices and implement safeguards if they use AI in employment decisions. CDF will monitor the status of the “No Robo Bosses” bill as it moves through the California legislative system.