California Civil Rights Council Rules on AI in Employment

The California Civil Rights Council adopted amendments to employment regulations addressing automated-decision systems, artificial intelligence, and algorithms under the Fair Employment and Housing Act (FEHA). The Office of Administrative Law approved the regulations, which became effective October 1, 2025. They clarify how existing antidiscrimination rules apply when employers and other covered entities use technology in hiring and other employment decisions. The regulations do not create a general license for automated selection or replace the underlying FEHA analysis. An automated-decision system can be used to screen, assess, or select applicants and employees. If its use causes an adverse employment action because of a protected characteristic, the employer may face discrimination liability. The rules clarify that using an algorithm does not remove the employer’s obligations and that a vendor can be an agent in relevant circumstances. Employers should examine selection criteria, impact evidence, job relationship, business necessity, and available alternatives rather than rely on a vendor’s assertion that a tool is neutral. The regulations require covered employment records, including automated-decision system data, to be retained for at least four years, subject to the rule’s details and applicable exceptions. They also address assessments that may constitute medical inquiries when questions, tests, or games elicit information about a disability. Employers must consider accommodation duties and should not assume that a game-based or indirect assessment avoids those rules. Documentation of validation and bias testing can be relevant evidence, but passing a test is not an automatic defense and does not cure a discriminatory practice. A sound process inventories vendor systems, decision points, inputs and outputs, human review, accommodations, records, and responsible parties. Keep the version and configuration used for each hiring cycle, document who reviewed recommendations, and monitor outcomes. Seek California employment-law advice for deployment-specific questions. FEHA and related federal law apply independently of whether an employer calls a tool artificial intelligence, analytics, or automation.