What happened?

On May 17, 2024, The California Civil Rights Department Council (CRC) put forth proposed rules to regulate the application of AI tools in employment-related decisions, including recruitment, application screening, hiring, and promotions.

What are the details?

The California Civil Rights Council, an extension of the California Civil Rights Department (CRD), has publicized its proposed rules aimed at safeguarding against employment discrimination that could arise from the utilization of artificial intelligence, algorithms, and other automated decision-making systems.

The proposed regulations seek to, among other topics:

• Clarify that it is a violation of California law to use an automated decision-making system if it harms applicants or employees based on protected characteristics.
• Ensure employers and covered entities maintain employment records, including automated decision-making data, for a minimum of 4 years.
• Affirm that the use of an automated decision-making system alone does not replace the requirement for an individualized assessment when considering an applicant’s criminal history.
• Clarify that third parties are prohibited from aiding and abetting employment discrimination, including through the design, sale, or use of an automated decision-making system.
• Provide clear examples of tests or challenges used in automated decision-making system assessments that may constitute unlawful medical or psychological inquiries.
• Add definitions for key terms used in the proposed regulations, such as “automated-decision system,” “adverse impact,” and “proxy.”

The Civil Rights Council and CRD invite all concerned individuals and the public to engage in the regulatory proceedings. They must submit their written feedback by 5:00 PM PT on July 18, 2024. Additionally, a public discussion regarding the proposed rules is scheduled for 10:00 AM PT on the same day.

Business Considerations

• Employers should consider leaving their feedback by email at council@calcivilrights.ca.gov and attending the public hearing.
• Employers should familiarize themselves with the proposed regulations and understand how they apply to your organization, especially the definitions of key terms such as “automated-decision system,” “adverse impact,” and “proxy.”
• It is recommended that employers conduct an audit of any automated decision-making systems that are in use for processes such as recruitment, hiring, promotion, and retention, ensuring that these systems do not adversely affect applicants or employees.
• Consider being proactive and take steps to protect your business.

Source References

• CRC Council Propose Rules Regarding Automated-Decision Systems 
• CRC Press Release
• Notice of Proposed Rulemaking

Resources

• Notice Of Proposed Rulemaking, Initial Statement Of Reasons For The Proposed Regulations, and Proposed Text of the Regulations are available here.

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