Effective October 1, 2025, the California Civil Rights Department has amended regulations to clarify that an employer’s use of automated decision systems, such as artificial intelligence, algorithms, or machine-learning tools may constitute discrimination if such use results in adverse treatment of individuals based on a protected characteristic.
These regulatory updates explicitly extend existing nondiscrimination provisions to include practices involving automated technologies, particularly as they relate to recruitment, hiring, and employment decision-making.
What Is an Automated Decision System?
The regulations define an ADS as any computational process, including those involving artificial intelligence (AI), machine learning, or algorithms that make or supports decisions about employment benefits. Examples of ADS use include:
- Screening resumes based on keywords or patterns
- Delivering targeted job advertisements
- Analyzing facial expressions or voice during video interviews
- Measuring skills, traits, or “cultural fit” through online assessments
Notably, basic tools like spreadsheets or databases are excluded, unless they are used to make employment decisions.
Key Compliance Obligations for Employers
Under the amended regulations, employers may be held liable if the use or outcome of an automated decision system contributes to:
- General discrimination based on protected characteristics such as race, sex, age, or religion;
- Disability discrimination, including failure to provide reasonable accommodations;
- Improper consideration of criminal history during hiring or employment decisions; and/or
- Discriminatory recruitment, screening, or application processes using automated tools.
The regulations emphasize that the method of decision making (automated or otherwise) does not insulate an employer from liability if the outcome has a discriminatory impact.
Next Steps for Employers
To comply with these regulatory updates, California employers should:
- Audit Current Technologies: Review all automated systems used in employment decisions, including resume screeners, chatbots, video interview analysis, and scoring algorithms to assess potential bias or disparate impact.
- Consult Vendors: Work with third-party providers to understand the logic and compliance framework of their tools. Confirm whether systems have been tested for potential discrimination against protected groups.
- Document Compliance Efforts: Maintain written policies and documentation of steps taken to evaluate and mitigate risk from automated decision tools.
- Train HR and Hiring Managers: Ensure relevant personnel are aware of the new regulations and understand that reliance on technology does not remove the employer’s legal responsibilities under FEHA.
- Review Criminal History Screening Practices: Confirm that use of criminal background checks complies with both FEHA and California’s “ban the box” law and that no automated tool is applying blanket exclusions.
