California Privacy Protection Agency (CPPA) Votes to Move Forward With Formal Rule-Making for AI-Based Employment Decisions
On November 8, 2024, the California Privacy Protection Agency (CPPA) voted 4 to 1 in favor of moving forward with the formal rule-making process for certain issues involving Automated Decision-Making Technology (ADMT), including significant employment decisions. Future regulations could potentially have major implications for companies and organizations interested in using AI to make/contribute to employment decisions, such as hiring, work assignments or job positions, or discipline. Here, our California employment lawyer for employers highlights key things to know about the proposed regulations.
What to Know About Automated Decision-Making Technology (ADMT)
CPPA defines ADMT within the draft regulations as any technology that processes personal information and uses computation to execute a decision, replace human decision-making, or substantially facilitate human decision-making. In other words, it is a broad definition encompassing a wide range of Artificial Intelligence (AI) tools currently used in a wide range of Human Resource functions.
The CPPA’s Proposed Regulations Focus On “Significant Employment Decisions”
The proposed regulations specifically target “significant employment decisions.” How does the California Privacy Protection Agency define this term? Once again, it is broad. Some examples include:
- Hiring, such as the use of AI in screening and selecting candidates;
- Work allocation, such as Automated assignment of tasks or projects;
- Compensation, such as decisions affecting salaries, bonuses, or other benefits.
- Promotion and demotion, such as AI-driven evaluations that impact progression; and
- Termination, such as automated assessments leading to suspension or dismissal.
How California Employers Should Prepare for the Potential Upcoming Changes
The CPPA 4-to-1 vote makes it clear that the agency is preparing to move forward with new regulations. With the public comment period now open and set to extend into early 2025, employers have a window to provide input on the proposed regulations. To prepare for these potential changes, employers should:
- Review and Adjust: Employers should examine current AI tools and practices to identify areas that may need adjustment to ensure compliance with these new regulations. Indeed, all employers in California should have a comprehensive understanding of the AI tools—or lack thereof—they are currently using for significant employment law decisions.
- Engage in the Process: Businesses and organizations in California should prepare to participate in the public comment period to voice concerns or seek clarifications on these new regulations. The public comment window is open into early 2025 if an employer has any important thoughts they would like to share.
- Plan Ahead: Finally, employers in California should develop strategies for implementing required notices, audits, and assessments to avoid potential violations of any future CPPA Automated Decision-Making Technology (ADMT) regulations.
Speak to an Employment Lawyer in California
At Sloat Law Group, APC, our California employment lawyer has the professional expertise you can trust. Have questions or concerns about CPPA regulations for AI-based employment decisions? We are here to help. Our firm helps employers put the right workplace practices in place so that their business complies with the new laws and regulations. Contact our employment law firm today for a confidential initial consultation. With an office in Riverside County, our firm works with employers throughout the State of California.
Source:
cppa.ca.gov/regulations/ccpa_updates.html
