Artificial intelligence is rapidly changing how businesses operate. The California legislature noticed this trend and is stepping in to regulate how employers use automated systems. Unchecked technological workforce management will soon be a thing of the past. Two major bills are currently awaiting Governor Gavin Newsom’s signature. Senate Bill 947 and Senate Bill 951 will expose employers to heavy litigation and civil penalties if they do not update their HR and restructuring protocols.
SB 947: The “No Robo Bosses Act” Senate Bill 947 directly limits the use of automated decision systems for employee discipline and termination. Most companies currently use software to track attendance, measure productivity, or evaluate customer feedback. SB 947 completely prohibits employers from relying solely on these automated systems to discipline or fire a worker.
Under this proposed law, a human manager must independently review the facts when a software program flags an employee for poor performance or recommends termination. The manager must verify if the disciplinary action is actually appropriate before moving forward. Employers will also have to notify employees when an automated system plays a role in a disciplinary or termination decision.
This requirement creates a major litigation risk for businesses. If you cannot prove a human reviewed an AI-generated performance score, plaintiffs’ attorneys will argue the system made the decision. That exposes your company to liability.
SB 951: The AI WARN Act and Technological Displacement Senate Bill 951 brings even larger changes by introducing the California Worker Technological Displacement Act. This bill requires employers to give 90 days of advance written notice before implementing any “technological displacement”. The bill defines this as job eliminations caused primarily by AI or automated technology.
SB 951 has a very low trigger threshold. It applies to displacements affecting just 25 workers or 25 percent of your workforce. This threshold sits much lower than the standard Cal-WARN Act, which generally applies to employers with 75 or more employees and requires notice for layoffs of 50 or more workers.
The administrative requirements under SB 951 are demanding. Employers must deliver highly detailed notices to the affected workers, the Employment Development Department, local workforce investment boards, and local city and county officials. The notice must include the specific AI system used, the vendor, and the justification for the technology. The legislation requires a separate “technology hiring disruption notice” to the state when an employer permanently stops hiring for a role because automation has taken over that work. Noncompliance carries heavy penalties. Employers face liability to each affected worker for back pay, calculated at the higher of the worker’s average compensation over the last three years or their final rate, plus the value of lost benefits.
Protecting Your Business Automated workplace systems promises the potential of real value. Their unchecked use, however, now carries serious legal risks. Companies must audit their AI tools, document their human-review workflows, and carefully plan any technology-driven restructuring before these laws take effect.
Nowland Law focuses on defending California companies and guiding corporate stakeholders through complex litigation. We protect your business by understanding your specific operational goals. This allows us to enforce your legal rights, get complaints dismissed, and build a strong defense strategy.
Contact Nowland Law at 949-221-0005 for a free initial consultation if your business is integrating automated management systems or planning tech-driven workforce changes.
