SB 947 (2026): Employers Must Corroborate Automated Discipline

Authority

Cal. Legislature

Citation

Stats. 2026, ch. 859

Effective Date

January 1, 2027

Senate Bill 947, authored by Senator McNerney, adds Part 5.5.5 (commencing with Labor Code section 1520) to Division 2 of the Labor Code to regulate how employers use automated decision systems, or ADS, in the workplace. The statute takes effect January 1, 2027, but its substantive provisions become operative on July 1, 2027. Among other things, it bars employers from relying solely on an ADS to make a disciplinary or termination decision and requires written notice when an ADS is primarily used for such a decision.

Background

Before this law, California had no general statute governing how private and public employers use automated decision systems to manage, discipline, or terminate workers. Existing law directed the Department of Technology to inventory high-risk ADS used by state agencies, but that effort focused on government procurement rather than the employment relationship.

SB 947 fills that gap by adding a new part to the Labor Code aimed squarely at the workplace. It defines an ADS as a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, such as a score, classification, or recommendation, used to assist or replace human discretionary decisionmaking. Routine tools such as spam filters, firewalls, antivirus software, calculators, and databases are excluded.

What the Law Changes

Under Labor Code section 1522, an employer may not use an ADS to violate labor, safety, employment, or civil rights laws, to infer an employee’s protected status under Government Code section 12940, or to predict and take adverse action against a worker for exercising legal rights. The statute reaches a broad set of employers, including state and local government entities, charter cities and counties, labor contractors, and farm labor contractors.

The core rule bars an employer from relying solely on an ADS when making a disciplinary or termination decision. Where an employer primarily relies on ADS output, it must direct a human to corroborate the decision using supporting information such as supervisory evaluations, personnel files, work product, peer reviews, or witness interviews. If the output cannot be corroborated, or a reviewer finds it inaccurate, incomplete, or misleading, the employer may not use it for the decision.

Section 1522 also gives an employee the right to request, and requires the employer to provide, a meaningful, objective description of the employee’s own data used by the ADS when the employer primarily relied on it for a disciplinary or termination decision. That description must anonymize the personal information of customers, other employees, and individuals.

Postuse Notice and Data Access

Labor Code section 1524 requires an employer that primarily relied on an ADS for a disciplinary or termination decision to give the affected employee a written postuse notice when it informs the employee of the decision. The notice must be plain language, stand-alone, in the employee’s usual communication language, and delivered by a simple method such as email or a hyperlink.

The notice must state that the employer primarily relied on an ADS, that a human reviewed and corroborated the output, and that the employer may not retaliate against the employee for exercising their rights. It must also provide contact information for a person the employee can reach for more detail and to access a description of the employee’s own data.

Enforcement, Retaliation, and Exceptions

Section 1526 prohibits discharging, demoting, suspending, or otherwise retaliating against an employee for asserting rights under the new part, filing a complaint, or assisting an investigation. The Labor Commissioner may enforce the part through existing citation and civil-action procedures, and a public prosecutor may bring a civil enforcement action. A violation carries a civil penalty of $500 per violation, and plaintiffs may seek injunctive relief, punitive damages, and reasonable attorney’s fees and costs.

In certain actions, once an employee shows an ADS was used, the burden shifts to the employer to show it did not primarily rely on the ADS or that it complied with sections 1522 and 1524. The part does not apply to parties under a collective bargaining agreement that explicitly waives it in clear terms and provides protection from algorithmic management, and it yields to federal requirements tied to aircraft for the national airspace or to national security, military, space, or defense work.