Starting July 1, 2027, a California employer can’t let software discipline or fire anyone by itself. Senate Bill 947, signed September 30, 2026, requires a human to corroborate any discipline or termination decision that rests mainly on an automated decision system (ADS), plus a written notice to the employee. In an enforcement action, once an ADS is shown to have been used, the employer must prove it didn’t primarily rely on the tool or that it followed those steps, so records made at the time carry the defense.
What does SB 947 require, and when?
The law is Senate Bill 947, Chapter 859, Statutes of 2026, by Senator McNerney. It has been nicknamed the “No Robo Bosses Act,” though that name doesn’t appear in the chaptered text. It adds Part 5.5.5, sections 1520 through 1526.7, to the Labor Code. The Governor approved it on September 30, 2026.
Two dates matter. As a regular-session statute, it takes effect on January 1, 2027 under article IV, section 8 of the California Constitution. But section 1526.7 says “This part shall become operative on July 1, 2027.” The duties start in July.
It defines an automated decision system, or ADS, as “any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decisionmaking and materially impacts natural persons,” according to section 1520(c). The definition excludes security tools such as spam filters and antivirus software, and it excludes calculators and plain databases or datasets. A productivity dashboard that ranks warehouse workers, or a scheduling platform that flags attendance risk, probably isn’t.
The core duties are in section 1522:
“An employer shall not rely solely on an ADS when making a disciplinary or termination decision.” If the employer “primarily relies upon an ADS output,” it “shall direct a human to corroborate the decision using data that was collected or used to produce the ADS output or other relevant corroborating or supporting information.” The statute’s examples include supervisory evaluations, personnel files, peer reviews, and witness interviews. Under section 1522(c), if the reviewer can’t corroborate the output, or concludes it is “inaccurate, incomplete, or misleading,” the employer can’t use it for the decision.
Section 1522 also bars using an ADS to “Infer an employee’s protected status under Section 12940 of the Government Code,” and lets an employee request “a meaningful, objective description of the employee’s own data used by the ADS” when the employer primarily used one to discipline or fire that employee.
Section 1524 adds a written “postuse notice” when the employer primarily relied on an ADS. It’s due “at the time the employer informs the employee of the decision,” as “a separate, stand-alone communication,” in plain language and in the language the employer normally uses with employees. It must say that the employer primarily relied on an ADS and that a human reviewed the decision and corroborated the output. It must also give contact information for a person the employee can ask about the decision and the data-access right, and state that retaliation is prohibited.
What rules already covered AI in employment before SB 947?
Under the Fair Employment and Housing Act (FEHA), California’s main anti-discrimination law, the Civil Rights Council’s regulations on automated-decision systems took effect on October 1, 2025. According to the Civil Rights Department’s announcement, they “Ensure employers and covered entities maintain employment records, including automated-decision data, for a minimum of four years.”
So the FEHA rules already required employers to keep ADS data, like other employment records. SB 947 adds a Labor Code layer on top, aimed at one moment: the decision to discipline or terminate. It doesn’t displace FEHA’s discrimination rules, and section 1522(a) separately bars using an ADS to violate labor, employment, or civil rights laws. On notice, though, section 1526.3 gives some relief: an employer that complies with SB 947’s notice requirements “is not required to comply with any substantially similar notice provisions related to automated decision systems used for employment-related decisions required under any other state law.” That safe harbor doesn’t cover quotas under Labor Code section 2100 or other automated standards applied to working conditions. And under section 1526.4, a business covered by the California Consumer Privacy Act remains subject to the Privacy Protection Agency’s automated decisionmaking technology regulations as well as SB 947.
Where does the litigation exposure come from?
Mostly from the burden of proof. In a civil action or administrative proceeding under the new part for a violation of section 1522(b) or (c), section 1526.1(c) provides that “once it has been demonstrated that an ADS was used to make a disciplinary or deactivation decision, the employer must demonstrate that the employer did not primarily rely upon an ADS or that the employer complied with Sections 1522 and 1524 when making the disciplinary or termination decision.”
The trigger is that an ADS was “used.” The employer’s way out is to prove it didn’t “primarily” rely on it, or that it followed the corroboration and notice rules. The statute doesn’t define “primarily.” I expect that to be the first thing litigated, and I’d plan as if any decision touched by a scoring tool will be treated as one that relied on it.
Enforcement runs through the Labor Commissioner and public prosecutors. Section 1526.1 lets the Labor Commissioner investigate, issue citations, and file a civil action, and under subdivision (d), in civil actions by the Labor Commissioner or a public prosecutor, “the petitioner may seek appropriate temporary or preliminary injunctive relief, including punitive damages, and reasonable attorney’s fees and costs” on top of other remedies. Under section 1526.1(e), every violation also carries “a civil penalty of five hundred dollars ($500) per violation.” Section 1526 separately bars retaliation against an employee who uses these rights or complains to the Labor Commissioner.
The part doesn’t expressly give an individual employee a lawsuit of their own. But under the Private Attorneys General Act (PAGA), which lets an employee sue for Labor Code civil penalties on behalf of other workers, Labor Code section 2699(a) provides that “any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments” may “as an alternative, be recovered through a civil action brought by an aggrieved employee.” Because the part isn’t operative until July 2027, no court has addressed whether PAGA reaches it. My view is that plaintiffs’ lawyers will start listing it in PAGA notices, and that an employer using a scoring tool across a large workforce should expect the $500 per violation figure to multiply.
The bigger risk may be the wrongful termination or FEHA case that would have been filed anyway. A missing postuse notice doesn’t prove discrimination. But it gives the employee’s lawyer a story about a company that let a machine fire someone and skipped the steps the Legislature required, and a jury will hear it.
Which records will decide an ADS dispute?
The ones made on the day of the decision. Here’s how the statute’s requirements map to the paper an employer will need.
| Requirement | Statute | What the employer will have to show | Record to keep |
|---|---|---|---|
| No sole reliance on an ADS | Lab. Code § 1522(b)(1) | A person made the decision | The decision-maker and the basis for the decision |
| Human corroboration when ADS is the primary basis | § 1522(b)(2), (c) | The reviewer checked the output against real information | The ADS output, the reviewer’s notes, and the evaluations, files, or interviews used |
| Postuse notice | § 1524 | Timely notice containing the required contents | A copy of the notice and proof of delivery |
| Employee data request | § 1522(d), (e) | A meaningful description was provided, with others’ data anonymized | The request, the response, and the date |
| FEHA record retention | CRD ADS regulations | ADS data preserved for at least four years | ADS inputs and outputs, retained per the CRD rules |
How should an employer get ready before July 1, 2027?
Start with an inventory of every tool that scores, ranks, or flags employees, then build the record the burden-shifting rule will demand. When a challenge to an ADS-assisted decision arrives, these steps come first:
- Preserve under a litigation hold the ADS output for the decision, the data the tool used, the human reviewer’s notes, the postuse notice, the personnel file, and the versions of the policies and the tool’s settings in effect at the time.
- Calendar the deadline on the Labor Commissioner citation, PAGA notice, or complaint, and check for an arbitration agreement and the notice terms of any employment practices liability (EPLI) policy.
- Identify the human reviewer and the decision-maker, and stop any further action against the employee that could look like retaliation for raising the ADS issue.
- Pull the corroborating records the reviewer relied on, and the response to any request the employee made for a description of their own data.
- Talk to a lawyer before responding, before contacting the employee or the employee’s lawyer, and before offering anything to settle.
The firm’s page for employment defense attorneys in California describes how it defends wrongful termination and discrimination claims, where ADS issues will most often surface.
Questions employers are asking about SB 947
Does SB 947 apply to hiring decisions?
The human-review and notice rules in sections 1522(b) through (d) and 1524 apply to “disciplinary or termination” decisions. The bans in section 1522(a) aren’t limited to discipline, but they protect “employees,” which the statute defines as people already employed, so their reach to applicants is unclear. Hiring tools are covered by the FEHA automated-decision regulations that took effect in October 2025, so an AI screening tool isn’t outside the law either way.
Does a small employer have to comply?
Yes. The definition of “employer” in section 1520(d) has no headcount minimum, and it expressly includes public employers and labor contractors.
What if a vendor’s software made the call?
The duties fall on the employer, and section 1520(d) defines an employer to include one acting “through an agent or any other person.” A vendor contract won’t move the burden in section 1526.1(c). Ask vendors now what the tool scores, what data it uses, and whether it can export the output for a given decision.
If an employee says an algorithm fired them
If a former employee, the Labor Commissioner, or a PAGA notice says your company let an automated tool decide a termination, the reviewer’s notes and the postuse notice usually decide how serious the claim is. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including wrongful termination claims. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The law is Senate Bill 947 (2025-2026 Reg. Sess.), Chapter 859, Statutes of 2026, chaptered text, adding Labor Code sections 1520 through 1526.7, with its legislative status and history. The effective-date rule is article IV, section 8 of the California Constitution. PAGA’s civil-penalty provision is Labor Code section 2699. The FEHA automated-decision regulations are described in the Civil Rights Department’s June 30, 2025 announcement.
This post is general information about California and federal employment law as of November 5, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.