California Governor Gavin Newsom has signed SB 947, known as the “No Robo Bosses Act,” protecting workers from fully automated personnel decisions and establishing a potential template for national labor regulation by taking effect on July 1, 2027.
How California is Limiting Automated Terminations
The legislation addresses the growing reliance on automated decision systems across corporate human resources departments. ZDNET reported that workplace use of algorithmic tools has expanded rapidly, touching everything from everyday tasks to hiring and performance reviews.
An April survey conducted by MyPerfectResume found that out of 1,000 HR professionals polled, 73% rely on algorithmic tools to make hiring decisions. Furthermore, 52% of respondents stated they use these systems to inform restructuring and role planning.
When screening candidates, hiring managers frequently deploy software for behavioral insights. Over half of the survey respondents, exactly 51%, use these applications to flag risky candidates.
When it comes to workforce reductions, only 26% of respondents reported that they don’t use AI to make decisions about layoffs.
What SB 947 Requires from Employers
The newly signed California law prohibits employers from outsourcing disciplinary and termination decisions entirely to automated decision systems. Employers must independently verify any algorithmic recommendation affecting employment status.
Under the statute, companies must provide affected workers with a clear description of the reasons behind a disciplinary or termination decision. This disclosure must include any data used by the system, covering personnel files, evaluations, work product, peer reviews, and witness interviews.
The legislation explicitly outlines the limits of machine authority in the workplace. “If an employer cannot corroborate the ADS output or the human reviewer has concluded that the ADS output is inaccurate, incomplete, or misleading, the employer shall not use the ADS output to make a disciplinary or termination decision,” the bill states.
Affected employees who believe these protocols were bypassed can file formal complaints with the California Labor Commissioner once the law goes into effect on July 1, 2027. The statute also mandates that employers explicitly clarify whether a mass layoff, relocation, or termination stems from an AI system.
State versus Federal Legislative Approaches
Lily Li, a lawyer specializing in artificial intelligence and founder of Metaverse Law, told ZDNET that she sees California’s latest enactment setting the precedent for other states. However, she anticipates corporate pushback.
“We could see employers engaging in check-the-box reviews rather than meaningful human review, to avoid the operational costs of an additional layer of review,” she noted. She added that the statutory right for an employee to request an explanation serves as a vital counterweight against superficial checks.
