California to regulate use of AI in employment starting October 1, 2025

California is set to implement new regulations governing the use of Artificial Intelligence (AI) and Automated Decision Systems (ADS) in employment decisions, starting October 1, 2025. These regulations, approved by the California Civil Rights Council on June 27, 2025, aim to clarify how existing anti-discrimination laws apply to the use of emerging technologies in the workplace.

Businesses have increasingly turned to using AI to increase efficiency in workplaces and hiring. The regulations make clear that using an ADS may violate California law if it harms applicants or employees based on gender, race, disability or other protected characteristics. They also require employers to maintain employment records, including automated-decision data for a minimum of 4 years.

The regulations amend the California Fair Employment and Housing Act (FEHA) to provide definitions for ADS, AI and the like. They also require notice to all applicants and employees when an ADS is used in employment decision-making. Another key requirement is providing reasonable accommodations when ADS tools evaluate attributes that may be impacted by disabilities or religious needs.

California employers should review the new regulations and assess their impact. This includes auditing and updating policies, evaluating AI/ADS tools, reviewing vendor agreements, training staff, and ensuring transparency with applicants and employees.

Stay tuned for our annual New Laws publication in Ahead of the Curve, which will feature new employment, business, and automotive laws passed in 2025. Last year’s publication is still available online.