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Companies have three months to comply with California’s new rules regulating automated decision-making.
The California Privacy Protection Agency finalized regulations under the California Consumer Privacy Act on September 23, which are scheduled to go into effect on January 1, 2026.
The regulation would be “the most stringent requirement in the United States regarding employers’ use of artificial intelligence and other automated tools in employment decision-making,” Littler said.
In a post on the matter, Littler and his colleagues said the final regulations took a long time to develop and were delayed due to the complexity of the subject matter.
This rule generally applies to medium- to large-sized commercial businesses in California that use automated decision-making technology to make employment-related decisions, such as hiring, work assignments, compensation, promotions, and terminations, without meaningful human involvement.
Affected employers are required to conduct detailed risk assessments, provide notice before use, and respect certain opt-out and access rights, Littler said.
“Given the complexity and operational burden of these requirements, employers should start now to evaluate their use of these technologies and prepare to implement compliance frameworks,” the lawyers said.
California’s law is one of the few that regulates the use of AI at the state level. Colorado, in particular, recently delayed enacting a thorny AI law amid controversy.
At the federal level, President Donald Trump’s AI Action Plan gives agencies the power to deny AI funding to states with “burdensome” rules regarding the technology.
