California: Employment Regulations Regarding Automated-Decision Systems (FEHA)

CaliforniaRegulationIn force

The California Civil Rights Council issued regulations under the Fair Employment and Housing Act (FEHA) to address employment discrimination resulting from the use of automated decision-making systems (ADS), including AI and algorithms. These rules apply to employers, employment agencies, and labor organizations with five or more employees. The regulations clarify that it is unlawful to use an ADS that discriminates against applicants or employees based on protected characteristics. Key provisions mandate the preservation of ADS data and selection criteria for at least four years, prohibit pre-employment inquiries via ADS that elicit protected information, and require reasonable accommodations when using an ADS for employment tests. The law focuses on the operational use of these automated tools by HR and recruitment teams. It does not impose direct, independent legal obligations on technology vendors, though vendors acting as agents of the employer may fall under the employer definition

Impact

What this means for HR and vendors

HR and recruitment teams

HR and recruitment teams must thoroughly evaluate their use of AI and automated decision systems in hiring, promotion, and retention. Organizations should ensure that automated pre-employment tools, such as assessments or puzzle games, do not unlawfully screen out candidates based on protected characteristics. Teams must establish processes to provide reasonable accommodations for candidates undergoing ADS evaluations. Furthermore, organizations must update their compliance and recordkeeping practices to retain ADS data and selection criteria for a minimum of four years

HR technology vendors

While these regulations directly govern employers, HR technology providers will likely see increased client demand for compliance-enabling features. Providers may need to supply transparency documentation, assist deployers with anti-bias testing, and ensure their platforms can facilitate reasonable accommodations, such as alternative test formats. Providers who act directly as an agent of an employer may fall under the regulatory definition of an employer, potentially exposing them to direct liability

Key obligations

What organizations need to do

Practical obligation briefings focused on what the requirement is, who it applies to, when it applies and what teams should consider doing.

DeployerDocumentation & Recordkeeping

Anti-Bias Testing and Proactive Efforts

OBLIGATION

APPLIES TO

STATUS

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Not legal advice

This page is regulatory intelligence only. Organizations should seek guidance from legal counsel before making compliance decisions.

Employment-focused extraction

This may be part of wider regulation. The Warden Watch extracts and displays the parts relevant to employment, HR and recruitment decision-making.

HR and recruitment teams

HR technology vendors

Recordkeeping of Automated-Decision System Data

Prohibition of Discriminatory ADS Use

Prohibition on Pre-Employment Inquiries via ADS

Reasonable Accommodation in ADS Testing

Anti-Bias Testing and Proactive Efforts

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