What employers should know about CA bid to regulate automated decision making

May 2022 employment law letter

Authors:

Amanda L. Shelby and Sylvia Bokyung St. Clair, Faegre Drinker

California is among the first states to propose regulating employers’ use of algorithms and artificial intelligence (AI). In a recent 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 rules remain a work in progress, they provide a glimpse into how policymakers are approaching the issues. They also could prove influential to other states (and even, potentially, the federal government) contemplating their own regulations in this space.

AI, algorithms, and work-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 is shown to be “job-related” and “consistent with business necessity.”

Specifically, the proposed regulations:

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