California’s “No Robo Bosses” Law: What Employers Using Automated Tools Need to Do Before July 1, 2027

Beginning July 1, 2027, California employers will face new limits on using automated decision systems in the workplace. SB 947, signed by the Governor on September 30, 2026, adds new sections to the Labor Code (sections 1520 through 1526.7). It applies to most California employers, public and private, regardless of size.

What Is Changing

The law covers any “automated decision system” (ADS), defined as a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that produces a score, classification, or recommendation used to assist or replace human decision-making.

Employers may not use an ADS to violate employment laws, to infer an employee’s protected status under the Fair Employment and Housing Act, or to predict and take adverse action against workers for exercising their legal rights. Employers also may not rely solely on an ADS to make a disciplinary or termination decision.

If an employer primarily relies on ADS output for discipline or termination, a human must corroborate the decision using the underlying data or other supporting information, such as performance evaluations, personnel records, or witness interviews. Output that cannot be corroborated, or that the reviewer finds inaccurate, incomplete, or misleading, cannot be used. The employer must also give the employee a separate written notice, and the employee may request a description of their own data the system used. The law does not define “primarily relies,” so employers should assume that a decision heavily shaped by a tool’s output is covered.

Enforcement is by the Labor Commissioner and public prosecutors, and violations carry a $500 civil penalty per violation.

What Employers Should Do Now

• Inventory your tools. Identify any software that scores, ranks, or flags employees, including performance, productivity monitoring, and scheduling or attendance systems, and determine whether it meets the definition.
• Review how the output is used. Make sure no tool is the sole basis for discipline or termination, and that none is used for a prohibited purpose.
• Build a review process. Train managers and HR to corroborate ADS output independently, document their review, and set aside output they cannot corroborate.
• Prepare the employee notice. Develop a plain-language, stand-alone written notice and a process for responding to data requests.
• Update your handbook. Policies should reflect these new limits and employee rights.

If you would like help evaluating your tools or preparing your policies and notices, please contact please contact your Payne & Fears LLP attorney or any member of our Employment Practice Group.