California Governor Rejects Employer Automated-Decisions Bill
Employers won’t face a new set of California requirements on automated decision systems. Gov. Gavin Newsom (D) vetoed SB-7, which would have added employer ADS rules on top of recent regulations about automated decision-making technology by the California Privacy Protection Agency and the California Civil Rights Council (see 2509240045).
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In a veto statement on SB-7, Newsom said he shares “the author’s concern that in certain cases unregulated use of ADS by employers can be harmful to workers.” However, the bill by Sen. Jerry McNerney (D) “imposes unfocused notification requirements on any business using even the most innocuous tools,” he said. “The proposed solution fails to directly address incidents of misuse. Moreover, this measure proposes overly broad restrictions on how employers may use ADS tools.”
“For example, prohibiting an employer from using customer ratings as the primary input data for an ADS takes away a potentially valuable tool for rewarding high-performing employees. To the extent that customer reviews are unfairly or inappropriately used to make decisions about a worker, legislation should address those specific scenarios rather than ban this practice altogether.”
Newsom noted that “situations where an employer uses an ADS to make disciplinary, termination, or deactivation decisions … are partially covered by forthcoming California Privacy Protection Agency regulations, which would allow employees and independent contractors to better understand how their personal data is used by automated decision technology.” Newsom suggested seeing if those rules work before enacting new legislation.
Newsom's veto disappointed the Center for Democracy & Technology. SB-7 “would have granted deeply needed transparency in the use of algorithmic decision systems in consequential decisions about workers as well as protections against the misuse of these systems in employment contexts," said Travis Hall, CDT director for state engagement. "Workers should not lose their jobs based on the output of opaque and unaccountable algorithms that have been unreviewed by a real person.”
Another SB-7 supporter, the Electronic Frontier Foundation, "will continue to work on this issue," said EFF State Affairs Director Hayley Tsukayama in an emailed statement. The "common-sense bill ... would have curbed some of the harshest consequences of automated abuse in the workplace," she added.
Fisher Philllips lawyers Benjamin Ebbink and Usama Kahf blogged Tuesday that the governor's "move will have an impact on employers not only in the Golden State but across the country as regulators from coast to coast struggle with how -- and whether -- to regulate artificial intelligence in the workplace."