California lawmakers have passed laws that could immediately require employers to provide notification to applicants and workers if AI is being used in workplace decisions and prohibiting the use of AI for certain workplace behaviors. The “No Robo Bosses” Act (SB 7), which aims to regulate the use of the Automatic Decision System (ADS) in the workplace, will head to Governor Newsom's desk after passing Congress late Friday. If signed, SB 7 will take effect on January 1, 2026 along with other AI-related employment regulations waves that use AI in the workplace to create a complex compliance environment for employers. Here's what you need to know about the new law and four steps to prepare for compliance:
Defining an automatic decision system
First, let's talk about the types of AI systems regulated by the No Robobos Act. This bill will affect employers' use of automated decision-making systems (ADS). So it's important to know how it is defined.
Tools such as spam filters, firewalls, cybersecurity software, access control, calculators, and data compilation are excluded.
In fact, this includes a wide range of technologies, including, but not limited to:
- Call the analysis tool – A tool that may generate performance scores based on phone length, tone, or employee efficiency
- Keystroke or computer activity monitoring software – Tools to monitor employee computer usage to ensure productivity or monitor employees remotely
- Automatic Shift Scheduling Platform – Tool to allocate time for forecasted demand using data analysis
- AI-based training program Gain employee proficiency after training the module and recommend the following tasks or other employment-related tasks:
- a Emotional analysis Employee email or chat messages that create scores or categories that may affect ratings
- Software that scores or flags employees based on employee Complying with workplace rules (Example: PPE compliance, regulatory training completion)
- Career Path Tool Generate internal transfer or training program recommendations based on employee data
It is more defined by employment-related decisions
Next, let's talk about which employer's actions are affected by the No Robobos Act.
Good news for employers? The final bill removes the original broad language included in previous versions, including decisions relating to “other terms or conditions of employment,” and instead sets a finite boundary when SB 7 is applied.
Advertising Prohibited Applications
The Robo Bosses Act prohibits employees from using advertising.
- rely only Advertising when making decisions regarding discipline, termination, or deactivation
- Inferring a worker's protected status (such as race, gender, or other legally protected characteristics)
- Identify, profile, predict, or make actions that are unfavourable to workers to exercise their legal rights;
- Collect worker data for purposes not disclosed based on applicable notification requirements
- Prevent or violate federal, state or local labor, occupational health and safety, employment, or compliance with civil rights laws or regulations;
- rely Only or mostly Customer reviews as input data for advertising when making employment-related decisions
Humans may need to be in a loop
Employers are prohibited from relying on only The ads above may depend on mainly When making employment-related decisions. There is no clear guidance on what the turning point is. This can pose compliance challenges for employers.
When an employer mainly Because it relies on advertising output to make discipline, termination, or deactivation decisions, the law is Human reviewers also evaluate the ad output Consider additional relevant information, such as supervisor or manager ratings, HR files, employee work products, peer reviews, witness interviews, and customer reviews.
However, in particular, SB 7 no longer offers workers the right to appeal their advertising decisions (which was necessary in previous versions of the bill). At best, human reviewers should look into other potentially relevant information, but there is no need for reviewers to overturn ADS outcomes or make sure employers are primarily dependent on them. These distinctions remain vague and can pose compliance challenges for employers.
Employers have notification requirements
The Robo Bosses Act requires employers to provide notifications both before and after using advertising in a particular workplace setting.
Pre-use notifications
Employers must provide written notice whenever advertising is used to make employment-related decisions (excluding employment) that directly affect workers (excluding employment).
- Notices must be provided to new workers at least 30 days before the ad is first rolled out (or if the ad is already in use by April 1, 2026) and within 30 days of employment.
- Notices must be written in plain language as another standalone communication provided in the language normally used in regular worker communication.
- It should be provided in simple and accessible ways, such as hyperlinks and other written formats.
Employers must also notify job seekers upon application if the advertisement is used to make position decisions. Your notification must include:
- Types of employment-related decisions that are potentially affected by advertising
- A general description of the categories of worker input data used by ADS, the source of that data, and how it is collected
- Important parameters known to disproportionately affect ad output
- The person, entity, or vendor who created the ad
- Explaining workers' rights to access and modify data used in advertising
- Statement that employers are prohibited from retaliating against workers for exercising these rights.
- If applicable, a description of each quota set measured in the ads, such as:
- Quantified number of tasks performed or products produced
- Potential adverse employment measures that may result from failure to meet quotas
- Whether quotas will be changed and whether workers will be notified of the change
Notification after use
SB 7 also imposes a requirement for employers to rely primarily on advertising to “use” “” and issue “post-use notices.”Discipline, end, Or deactivate” decision, and when the employer notifies the worker of the decision, it provides notification to the affected worker. The notification must include the following information:
- For details on decisions, humans relied on decisions on their own ability to request copies of workers' data.
- The employer uses advertising to assist the employer in one or more discipline, termination, or deactivation decisions regarding the worker.
- Workers have the right to request a copy of the worker's data used in the advertisement.
- Employers are prohibited from retaliating against workers for exercising their rights under this part.
Like pre-use notifications, post-use notifications must use languages provided in plain languages in separate standalone communications, usually used to communicate with workers and provided in an accessible format.
SB 7 Enforcement Bureau has been reduced from the original version
In another good news for employers, lawmakers amended SB 7 before being finalized to remove one of the bill's most controversial provisions. The applicant and the worker no longer have a private right to conduct that would have permitted them to file a civil action in court against an employer who appears to be in violation of the law.
What remains unchanged, however, is that a violation of SB 7 will bear a civil penalty of $500 for each violation. The executive agency continues to rest with the Secretary of Labor and prosecutors, including the California Attorney General, District Attorney, City Attorney, County Advice, and other local prosecutors.
What should an employer do to prepare for SB 7?
With SB 7 being signed into law and expected to come into effect on January 1, 2026, employers must take steps to prepare.
1. Perform a complete inventory of all your ads in use
SB 7 requires employers to maintain an updated list of all advertising used in the workplace. Perform an internal advertising audit now. Start by cataloging all systems that generate scores, classifications, or recommendations that affect employees, including the ads used for employment.
2. Prepare notifications before and after use
Employers must provide workers, and in some cases applicants must provide detailed notices explaining when and how the advertisement will be used. These notifications ensure that you meet the plain language, timing and accessibility requirements of the SB 7.
3. Create a comprehensive compliance plan
Establish clear internal procedures that allow employees to access and modify the data used in ADS-driven decisions. It designates a trained individual and acts as a “human reviewer” in situations where the advertising output informs you of a decision regarding discipline, termination, or deactivation. A document protocol on how these reviewers will consider additional relevant information before finalizing a decision.
4. Please consult a lawyer
California employers will soon see complex interactions between SB 7 and other emerging regulatory schemes, such as the Civil Rights Office's Automated Decision Technology (ADT) regulations and the California Privacy Protection Agency's Automated Decision Technology (ADMT) regulations. Advising should be provided to develop a compliance strategy that meets the SB 7 obligations and to maintain consistency with broader legal requirements.
