AI and employment: tracking California’s proposed regs on automated decision making

California is among the first states to propose expressly regulating employers’ use of algorithms and artificial intelligence (AI). In a March 25, 2022, virtual public meeting, the California Fair Employment and Housing Council discussed proposed regulatory changes that would address employers’ and third parties’ use of AI in employment practices. While the proposed regulations remain a work in progress, they provide a glimpse into how policymakers are approaching these issues—and they could prove influential to other states (and even, potentially, the federal government) contemplating their own regulations in this space.

Closer look: AI, algorithms, and employment-related decisions

The proposed regulations, which were released March 15, 2022, would make explicit that California’s current nondiscrimination law prohibits an employer’s use of “qualification standards, employment tests, automated-decision systems, or other selection criteria that screen out or tend to screen out an applicant or employee or a class of applicants or employees” based on legally protected characteristics, unless the selection criteria are shown to be “job-related” and “consistent with business necessity.”

Specifically, the proposed regulations define “automated-decision system” broadly as any “computational process . . . or other data processes or artificial intelligence technique” and specifically includes algorithms that: