Newsom signs law barring sole use of AI in hiring, firing decisions

Oct. 1 (UPI) -- California Gov. Gavin Newsom has signed a landmark bill into law that bans employers in the state from solely using artificial intelligence to discipline or fire workers.

Newsom on Wednesday enacted the so-called No Robo Bosses Act barring companies from relying on "automated decision-making systems" for disciplinary matters or terminations.

It mandates businesses that "primarily" rely on AI to make disciplinary or termination decisions to have a human corroborate the moves with additional information, including evaluations from managers, reviews from peers and personnel files.

Written notices that AI was "primarily used" in disciplinary actions and firings must be provided to the employee, a description of the data on the employee that was used by the system, and a human contact who can be contacted to discuss the decision further.

"No worker should ever be fired or disciplined by a machine, AI or not," Democratic state Sen. Jerry McNerney, the bill's author, told CNBC. "Artificial intelligence systems have the potential to boost productivity, but they've also made errors and misjudgments and exhibited bias."

McNerney first introduced the legislation last year after a push by organized labor in California to guard against the ability of management to use AI to take adverse actions against workers.

"When working people organize, we get results," California Federation of Labor Unions President Lorena Gonzalez said in a statement. "Workers across California have demanded that our state lead the way in regulating AI in our workplaces. And today, we see that begin to happen.

"Today, California's workers and our unions have changed the national narrative on how Americans can fight back and win against AI taking over our jobs and workplaces."

A year ago, Newsom vetoed the legislation even after it passed both houses of California's legislature with broad majority support. He cited a requirement for businesses to alert employees in advance when an AI system was being used that could impact work conditions.

McNerney in February reintroduced the bill after removing the pre-notification requirement language to extend protections to gig workers after criticism from Uber Technologies and Lyft.

Even after the changes, business leaders in the state rallied against the bill leading up to its adoption.

"The bill's obligations generally apply when an employer 'primarily relies' on an automated decision system, but that critical term is never defined," Robert Singleton of the California Chamber of Progress told Newsom in a letter last month. "Employers are given no objective standard for determining when a technology has moved from merely informing a decision to being a primary basis for it."

Uncertainty about whether ordinary tools qualify as regulated automated decision systems "could discourage employers from using technologies that improve consistency, identify safety risks, or help managers make better-informed decisions," he added.