The California legislature is currently considering Assembly Bill (AB) 1898, a significant piece of legislation aimed at increasing transparency regarding the use of Artificial Intelligence (AI) and automated decision-making tools in the workplace.
If passed, the “Artificial Intelligence Transparency at Work” act would amend the California Labor Code to require employers to disclose the use of any computational process, such as machine learning or statistical modeling used to assist in employment-related decisions.
Key Requirements of AB 1898
The current draft of AB 1898 introduces several rigorous obligations for employers operating in California:
- 90-Day Advance Notice: Employers would be required to provide a written notice at least 90 days before deploying a new “workplace AI tool” to any worker who could be affected.
- Deadline for Existing Tools: For AI tools already in use by January 1, 2027, employers must provide the required notice no later than February 1, 2027.
- Mandatory Signed Acknowledgments: Employers would be prohibited from using an AI tool until every affected worker has signed a confirmation stating they received and understood the notice.
- Annual AI Inventory: Organizations would be mandated to maintain and distribute an updated annual list of every workplace AI tool currently in use.
Disclosure and Notice Standards
The notice cannot be buried in a general handbook; it must be a standalone, plain-language document provided in the language the employer typically uses for routine communications. Required disclosures include:
- Purpose and Justification: A clear explanation of why the tool is being used and the specific goals of its implementation.
- Technical Mechanics: A description of the data inputs, the specific analysis performed, and the nature of the output generated.
- Employment Impact: Which specific decisions (e.g., hiring, performance reviews, or termination) the tool may influence and whether any roles will be automated.
- Data Privacy Protocols: Information on who can access worker data and whether that data is sold or transferred to third-party entities.
Enforcement and Potential Liability
Non-compliance with AB 1898 would carry heavy consequences. The Labor Commissioner and public prosecutors would have the authority to investigate violations. Specific risks include:
- Statutory Penalties: Employers could face fines of up to $500 per employee for each specific violation.
- Private Right of Action: The bill would authorize workers (or their representatives) to file civil actions for damages, injunctive relief, and recovery of attorney’s fees.
Next Steps for Employers
While the bill continues to move through the legislative process, California employers should consider the following proactive measures:
- Conduct an AI Audit: Identify all software currently used for recruitment, scheduling, or performance monitoring that utilizes automated algorithms.
- Consult with Software Vendors: Request “plain-language” documentation from your tech providers regarding how their AI models function and how worker data is handled.
- Track Legislative Progress: Monitor the status of the bill, as requirements and effective dates may be adjusted during the committee process.
How HR Works Can Help
Employers wishing to prepare for this change in California, as well as laws being considered in other states, should carefully review their organization’s AI governance activities. HR professionals have a key role in AI governance: communicating policies, training employees, and monitoring the use of AI in employment-related decisions and activities. To assist you in getting your organization up to speed with AI compliance, HR Works’ AI Governance Package includes sample policies, inventory tracking, vendor due diligence, disclosure language, training, state law monitoring, and more. Contact us for more information.
