08-05-2025
Established in 2020, the California Privacy Protection Agency works to protect consumer privacy. As part of its responsibilities, it creates regulations on automated decision-making technologies (ADMT). ADMT encompasses any technology that processes personal information and computation to replace or substantially replace human decision-making. It includes AI and machine learning technologies. In addition, data storage, calculators, databases, and spreadsheets may fall under ADMT if they replace human decision-making.
These new regulations will impact employers. They apply to any technology that replaces human decision-making for granting or denying benefits or opportunities in education or employment. Employers can avoid the compliance requirements of the regulations if there is sufficient human involvement in the decision-making process. Employees must be trained to interpret and use the technology’s outputs, actively engaging in reviewing and analyzing the information to make decisions. If employers use automated decisions related to hiring, job assignments, promotions, demotions, compensation, and termination, they must comply with the new regulations. As will businesses that systematically observe workplaces, educational settings, or publicly accessible places.
Companies must notify employees of the technology use and its purpose, scope, and potential impacts. They must share how the “ADMT processes personal information to make a significant decision.” If the employer does not meet the human involvement exceptions, the business must provide a description of the human reviewer’s role in the process. An alternate method must be shared and described for individuals who opt out of ADMT. While individuals have the right to opt out, some exceptions exist. Employers with California employees should consult an attorney about their obligations because they must follow specific steps. The regulations will be implemented in stages through January 1, 2027.