Dive Brief:
- A California bill passed on Sunday would prohibit employers in the state from using artificial intelligence tools that surveil an employee’s individual emotional state or collect an employee’s “neural data.”
- The text of Assembly Bill No. 1883, or AB 1883, defines neural data to include information generated by measuring the activity of an employee’s central or peripheral nervous system that is not inferred from nonneural information. It contains a broad list of covered AI tools including those used to generate outputs that influence either physical or virtual environments.
- AB 1883 would not prohibit employers from using workplace surveillance tools broadly, and the law would permit the use of such tools to ensure safety. Violators would be subject to a per-violation penalty of $500. The law also exempts operations related to the development of certain aircraft and products for national security, military, space or defense purposes.
Dive Insight:
The legislation addresses an area of growing interest among HR technologists. Workplace emotional monitoring via AI is a controversial topic, however, and its use has already been prohibited by the EU’s Artificial Intelligence Act, which took effect in August 2024.
One example of a similar tech deployment made headlines earlier this year, when the fast food chain Burger King announced the rollout of its “Patty” AI assistant. The software, which is integrated into employees’ headsets, can identify when employees use phrases associated with friendliness, the Associated Press reported. The company told AP that it intended to use Patty as a coaching tool rather than a tracker of individual employees.
Emotion AI is showing up in a growing number of workplaces like call centers, lobbies and various offices, Korn Ferry executives wrote in a June article, where it has been promoted as potentially helpful in hiring, training and safety monitoring. Such use cases are likely to draw heavy investment, with Korn Ferry citing a report showing that the market for emotion AI could reach $9 billion by 2030.
Yet, some researchers have urged employers and organizations at large to exercise caution. In a March 2025 analysis, an associate professor of information at the University of Michigan wrote that emotion AI’s capacity to measure emotions “remains controversial and contested,” adding that some research suggests adults exposed to the tech express concerns about a loss of privacy and autonomy along with psychological harm.
California lawmakers are targeting several pieces of AI-related employment legislation in 2026. These include SB 951, which would require employers to issue notices of mass layoffs, relocations or terminations caused substantially or wholly by AI adoption, as well as SB 947, which would prohibit employers from solely relying on “automated decision systems” to make disciplinary or termination decisions. State regulators have already issued rules limiting the use of AI in some employment decisions among specific employers.
Monday marks the deadline for California’s legislature to pass bills that will then be sent to Gov. Gavin Newsom, according to local news outlet CalMatters. Bills signed into law by the governor typically take effect on Jan. 1 of the following year.