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Legislators in California are considering a bill that would regulate how employers may use Artificial Intelligence as part of the hiring process.

Senate Bill 7

California Senate Bill 7 (SB7), also known as the “No Robo Bosses Act” could create new regulations for employers who utilize Artificial Intelligence (AI) as part of their hiring process. It would disallow organizations from using AI to make employment decisions without some form of human oversight.

SB7 hopes to establish several guidelines for employers in CA. Highlights include:

• Employers, or third parties that are hired by an organization, would be required to provide written notice that an Automated Decision System (ADS) is being used to help make employment decisions.
• Businesses or their vendors would have certain limitations on how they may use an ADS.
• People who work for an organization that uses an ADS would need to be notified if the AI is involved in making non-employment decisions about them.
• Employers would be prohibited from discharging, threatening to discharge, demoting, suspending, or in any manner discriminating or retaliating against workers who make efforts to protect their rights under SB7.
• Employers would be disallowed from using any ADS to conduct predictive behavior analysis.

Definitions

SB7 also defines some key terms:

• ADS. A computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, which is used to assist or replace human discretionary decision-making and materially impacts natural persons.
• Vendor. A third party, subcontractor or entity that provides software, technology, or a related service that is used to collect, store, analyze, or interpret data about workers.
• Employer. Any person who directly or indirectly employs or exercises control over the wages, benefits, other compensation, hours, working conditions, access to work or job opportunities, or other terms or conditions of employment, of any worker.
• Predictive Behavior Analysis. Any system or tool that predicts or infers a worker’s behavior, beliefs, intentions, personality, emotional state, or other characteristics.

Takeaway For California Employers

Employers in CA should be aware that if SB7 is signed into law, it will become illegal for them to use an ADS that:

• Infers a worker’s immigration status, veteran status, ancestry, history, religious or political beliefs, criminal record, credit history, or other protected statuses
• Uses or relies on data for a worker to help determine their compensation, unless the employer can clearly demonstrate that any differences in compensation for substantially comparable work are based on cost differentials in performing the tasks, or that the data was directly related to the tasks the worker was hired to perform.

SB7 would prevent employers from relying on an ADS exclusively to make promotional or disciplinary decisions. They would also be required to have a human review data such as personnel files, managerial evaluations and peer reviews.

Employment Background Checks

AI is becoming more prominent in the hiring process, but at Backgrounds Online, we believe in the importance of human oversight. We are a Consumer Reporting Agency (CRA) that is accredited by the Professional Background Screening Association (PBSA). Every one of our reports goes through a quality assurance process and we take reasonable steps to ensure the data we provide is current, accurate and reportable.

If your organization needs employment background checks, please contact us. Our highly trained team can help you customize screening packages that suit your specific needs, comply with relevant laws and meet industry standards. We are available to assist you Monday through Friday from 5am to 6pm PT.