California Introduces New AI Anti-Discrimination Bill

California Introduces New AI Anti-Discrimination Bill

In recent years, employers have nigh-universally embraced the implementation of artificial intelligence (AI) in their major employment decisions, such as hirings, promotions, and firings. Indeed, as of 2025, 83% of companies already use AI tools in their hiring processes, and 98% of Human Resources (HR) executives plan to use this technology when making termination and layoff decisions as well.

However, despite the widespread acceptance of AI in the workplace, signs have already emerged that overreliance on such technology could trample workers’ rights. Without proper oversight by human officials, AI machine learning tools might adopt unlawful discriminatory biases against job candidates and employees. For instance, Amazon used an AI recruiting tool that allegedly promoted male candidates over women, downgrading resumes that contained phrases such as “women’s chess club captain” and penalizing graduates of various all-women’s colleges. To prevent such harms, some jurisdictions, including the European Union, prohibit companies from making significant decisions based only on AI analysis. The European Union also requires companies who rely on AI to share algorithms used in decision-making with affected individuals. These protections are important, even if they do not prevent every instance of AI overreliance—in 2023, an Amsterdam court found that Uber had used AI technology as the sole decision-maker when it terminated three drivers.

To address the dangers AI poses for Californians, Assemblymember Rebecca Bauer-Kahan introduced Assembly Bill (AB) 1018 on February 20, 2025 to regulate AI decision-making tools in the workplace. AB 1018 would create a strong framework governing automated decision systems (ADS), which it defines as any machine-learning-based system that aids or replaces human decision-making and materially impacts individuals, including employment-related decisions. Namely, the bill would impose strict oversight on ADS and establish overarching duties for AI developers and deployers, including third-party audits, data retention obligations, performance evaluations, and transparency mandates for AI-driven judgments affecting sectors such as employment, healthcare, and housing. Some of the key aspects of AB 1018 include the following:

• AB 1018 would expand compliance requirements for HR functions using AI tools, covering not only hiring and firing, but benefits, wages, promotions, scheduling, access to training, workplace safety decisions, and performance evaluations as well.
• AI developers must perform annual audits and reveal potential disparate impacts of their systems.
• Employers must preserve unredacted AI-related documentation for at least 10 years, which includes performance evaluations, audit results, and employee appeals. Non-compliance with these requirements could lead to potential penalties.
• All employers using AI decision-making technology must designate at least one compliance officer responsible for overseeing adherence to the law and investigating AI-related complaints.
• All employers must offer their employees and job applicants the choice to opt out of AI decision-making in certain areas. They must also disclose whether human review occurred at any point before effectuating any decision made by ADS.
• If an employer uses ADS that affect 6,000 or more individuals over three years in processes related to hiring, promotions, and discharges, then they must undergo independent audits of their systems.
• Employers must give employees and candidates disclosures relating to ADS-driven decisions, permit them to opt-out in certain situations, and offer them an appeals process if they experience an adverse outcome.
• The California Civil Rights Department, Labor Commissioner, and Attorney General have the authority to impose penalties onto employers of up to $25,000 for each violation.

If passed, AB 1018 would be a great victory for California workers, representing the state’s most comprehensive effort yet to curb bias resulting from AI decision-making. Workers and their advocates would have a powerful tool to discover AI’s role in employer discrimination, and employers would not be able to hide behind supposedly neutral AI decision-makers.

If you believe that you have been the victim of discrimination in the workplace, or you have concerns about your employer’s use of AI, contact us at Bryan Schwartz Law, P.C.