Josh Hild, Unsplash
On October 13, 2025, California Governor Gavin Newsom vetoed S.B. 7, which would have required human oversight in certain types of employment decisions made solely by automated decision systems (“ADS”). If Gov. Newsom signed the bill, it would have required California employers using automated systems for actions such as hiring, firing, and discipling to implement human oversight and explain certain decisions made by AI. The bill would have also required robust notices and granted employees and contractors access rights to data used by ADS.
In his letter notifying the California State Senate of the veto Gov. Newsom cited concerns that S.B. 7 would have imposed “overly broad restrictions” on employer deployment of ADS. For example, the requirements could be interpreted to extend to “innocuous” technology such as scheduling and workflow management tools. Industry groups opposing the bill argued it would have also carried massive costs for compliance, particularly to small businesses.
Gov. Newsom shared concerns with the bill’s author of unregulated use of ADS and affording employees protection as it relates to ADS, but wrote that legislatures “should assess the efficacy of [such] regulations to address these concerns.” Still, California employers face restrictions with respect to certain uses of ADS under the regulations recently finalized by the California Privacy Protection Agency.
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