Does your company use an “automated decision system” (“ADS”)? Your initial response may be “No” or “What does that mean?” But a closer look at the role software plays in your workplace may reveal that you already use one. Consider attendance software that automatically issues a write-up after a certain number of points, or a productivity dashboard that categorizes employees based on their performance and flags them for disciplinary review. Under California’s new law, a tool may qualify as an ADS based on how it makes or helps make those decisions (even if the vendor never calls it an ADS).
Reining In the Robo Boss – Meet SB 947
On September 30, 2026, California Governor Gavin Newsom signed SB 947, the “No Robo Bosses Act of 2026,” into law. The law becomes operative on July 1, 2027, and adds new provisions to the California Labor Code beginning with section 1520.
SB 947 prohibits California employers from relying solely on an ADS in decisions to discipline or terminate employees. An ADS, as defined by the statute, covers any “computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decision-making and materially impacts natural persons.” (Cal. Lab. Code § 1520(c).)
What does this actually mean? Good question.
Essentially, an ADS is a computer tool that analyzes information and produces a score, label, or recommendation used to make or help make a decision that materially affects someone. It can qualify even when a human makes the final decision.
The law excludes spam email filters, firewalls, antivirus software, identity and access management tools, calculators, databases, datasets, and other compilations of data.
The Four Primary No-Robo Rules – Employer Obligations
The statute establishes four primary obligations for employers using an ADS in discipline or termination decisions:
1. No “sole reliance.” An employer may not rely solely on an ADS to discipline or terminate an employee.
2. Human review when primarily relying on an ADS. If an employer relies primarily on an ADS output to discipline or terminate an employee, a human must corroborate the decision by checking the underlying data or other relevant supporting information. Supporting information may include, but is not limited to, the following:
a. Supervisor or manager evaluations;
b. Personnel files;
c. Employee work product;
d. Peer reviews; or
e. Witness interviews or relevant online customer reviews.
3. No reliance on uncorroborated or unreliable output. An employer may not use an ADS output to discipline or terminate an employee if a human cannot corroborate it or determines that it is inaccurate, incomplete, or misleading.
4. Provide notice and access to data. Employers that rely primarily on an ADS output to discipline or terminate an employee must provide a standalone, plain-language written post-use notice when communicating the decision. The notice must use the language of routine employee communications and include:
a. Disclosure of the employer’s primary reliance on the ADS;
b. Confirmation that a human reviewed and corroborated the output;
c. The employee’s right to request a description of their own data, along with contact information for a human who can explain the decision and receive data requests; and
d. A statement that retaliation for exercising rights under the law is prohibited.
Upon request, the employer must also provide a meaningful, objective description of the employee’s own data used by the ADS, while anonymizing other individuals’ personal information.
The Three No-Robo Prohibitions – Off-Limits Uses
In addition to these obligations, the statute explicitly prohibits the use of an ADS in three key contexts:
1. No unlawful uses. Employers may not use an ADS to prevent compliance with or violate federal, state, or local labor, workplace health and safety, employment, or civil rights laws or regulations.
2. No inferring protected status. Employers may not use an ADS to infer an employee’s protected status under California’s Fair Employment and Housing Act (FEHA).
3. No predicting and penalizing the exercise of legal rights. Employers may not use an ADS to predict and take adverse action against a worker for exercising legal rights, including rights protected by state and federal employment and labor laws.
The No-Robo Reckoning – Applicability, Enforcement, and Penalties
SB 947 broadly covers employers with employees in California, including public and private employers, with narrow exceptions for qualifying collective bargaining agreements and ADS uses required by, or reasonably necessary to comply with, specified federal laws, regulations, or contracts involving aircraft development or national security, military, space, or defense products or services.
Enforcement rests with the Labor Commissioner and public prosecutors, and violations carry a $500 civil penalty each. The law also puts employers on the defensive: in proceedings challenging compliance with the human-review rules, once the required showing of ADS use is made, the employer must demonstrate that it did not primarily rely on the system or that it followed the review and notice requirements.
Keeping the Human in Charge – Practical Takeaways
1. Don’t assume you’re robo-free. Inventory the tools that generate scores, rankings, classifications, or recommendations about employees. Identify which qualify as an ADS and how their outputs influence discipline or termination, regardless of the vendor’s marketing.
2. Make human review meaningful. Establish who will review ADS outputs, what information they will check, and how they will corroborate the decision. Reviewers should understand when an output must be rejected and have the authority to stop a decision that lacks support.
3. Document the human work. Preserve the relevant output, the information reviewed, the reviewer’s identity, and the reasons supporting the final decision. A documented review will help the employer demonstrate what happened if its compliance is challenged.
4. Prepare the paperwork and the people. Before July 1, 2027, develop the required standalone post-use notice template, designate a human contact, and establish a process for responding to requests for a meaningful, objective description of the employee’s own data while anonymizing other individuals’ personal information. Train managers and HR personnel on these procedures, the corroboration requirements, and the prohibition against retaliation.
Please contact a Nukk-Freeman & Cerra team member if you have any questions or would like further assistance.