California Introduces No Robo Bosses Act to Regulate AI in Workplace

Artificial Intelligence (AI) is increasingly becoming a part of the workplace, from recruiting to evaluating employee performance. In response to this trend, California has introduced the “No Robo Bosses” Act, also known as SB 7. This bill, authored by Assembly members Sade Elhawary and Isaac Bryan and introduced by State Sen. Jerry McNerny, aims to regulate the use of AI in the workplace. The bill is supported by organized labor, including the California Federation of Labor Unions, an affiliate of the AFL-CIO.

The “No Robo Bosses” Act requires human oversight when AI is involved in decisions related to promoting, demoting, firing, or disciplining workers. It also restricts AI from accessing personal information about workers, such as their immigration status, religious beliefs, or healthcare history. Additionally, the bill prohibits the use of AI for predicting a worker’s future behavior in a way that could result in negative actions against them.

Luana de Mello, assistant general counsel and HR consultant with Engage PEO, highlights that this act is a first-of-its-kind legislation that places significant restrictions on AI use in the workplace. It will require businesses to regularly audit their AI systems and ensure they are used transparently and in compliance with state regulations.

California is not the only state taking steps to regulate AI in the workplace. More than 30 states are actively considering their own legislation. Colorado, for instance, was the first state to address algorithmic discrimination at work in 2024. Its legislation, set to take effect in 2026, focuses on “high-risk” AI systems that influence major decisions for employees. Employers in Colorado will need to conduct annual impact assessments, inform employees about the use of high-risk AI systems, and provide workers with the opportunity to appeal adverse decisions influenced by AI.

However, the future of AI legislation remains uncertain due to a proposed 10-year federal moratorium on state laws regulating AI. This moratorium was initially included in a budget reconciliation package but was later removed, leaving the path for AI regulation open to interpretation.

Danielle Ochs, an attorney and shareholder at Ogletree Deakins, expresses concern over the conflicting directions states, particularly California, are taking with AI regulation. Some lawyers warn that the California bill could impose significant costs on businesses, including auditing AI tools, complying with vendors, revising policies, notifying employees, and maintaining records. Jason Murtagh, a shareholder and attorney at Buchanan Ingersoll & Rooney, anticipates an increase in litigation from employees and job applicants as a result of the new bill.

Spencer Hamer, an attorney and shareholder at FBFK Law, believes that smaller businesses will bear the brunt of litigating these laws. Larger companies may have the resources to achieve legal compliance, but smaller employers will often have to determine their compliance through litigation.

Angelina Evans, an attorney at Seyfarth Shaw’s Los Angeles office, advises clients to create an AI governance team to ensure the data provided by AI tools is consistent with expectations and to investigate any discrepancies. She views the bill as an extension of this line of thinking, aimed at providing transparency and protecting workers' rights.