Businesses have less than three months to become compliant with California’s new rules regulating automated decision-making.
The California Privacy Protection Agency finalized regulations under the California Consumer Privacy Act on Sept. 23, and the rules will go into effect Jan. 1, 2026.
The regulations will be “the most stringent requirements in the United States on employers’ use of artificial intelligence and other automated tools in employment decisionmaking,” Littler attorneys say.
The final regulations have been a long time coming and have been delayed due to the complexity of the topic, Littler attorneys said in a post on the subject.
The rules generally apply to mid to large for-profit California employers who use automated decision-making technology for employment-related decisions, such as hiring, work assignments, compensation, promotion and termination, without meaningful human involvement.
They require affected employers to perform detailed risk assessments, provide pre-use notices and honor certain opt-out and access rights, Littler said.
“Given the complexity and operational burden of these requirements, employers should begin preparing now to evaluate their use of these technologies and implement compliance frameworks,” the attorneys said.
California’s law is one of a handful at the state level regulating the use of AI. Notably, Colorado recently delayed implementation of its embattled AI law amid debate.
At the federal level, President Donald Trump’s AI action plan gives agencies the power to deny AI-related funds to states with “burdensome” rules on the technology.