California regulations amended to protect against AI-related employment discrimination

Revised regulations impact use of automated decision systems in screening, hiring and other employment decisions

Quick Summary: In response to the growing use of AI tools, the California Civil Rights Department’s Civil Rights Council has developed and issued ADS-related employment regulations “to protect against potential employment discrimination as a result of the use of artificial intelligence, algorithms, and other automated-decision systems.” Learn about the prohibited use of AI in employment decisions and when employers might need to provide reasonable accommodation. CDA resources will assist members’ compliance.

A dental practice uses an automated decision system to advertise an open position for front-office staff. Another uses an ADS to screen job applicants’ resumes to hire the best candidate, and a third uses chatbots powered by artificial intelligence to communicate with candidates. The dental practices are discovering that these systems can expedite the hiring process and free up time with patients, so what can go wrong?

ADS and chatbots may benefit the practices in some ways, but using AI to make employment decisions related to recruitment, hiring and promotion could exacerbate existing workplace biases and lead to discriminatory outcomes that violate California’s existing antidiscrimination laws, such as dismissing a candidate based on a protected basis.

In response to the growing use of AI tools, the California Civil Rights Department’s Civil Rights Council has developed and issued ADS-related employment regulations “to protect against potential employment discrimination as a result of the use of artificial intelligence, algorithms, and other automated-decision systems.” The new regulations will take effect Oct. 1, 2025, and apply to all California employers who are covered by the Fair Employment and Housing Act.

The council in a June 30 news release cites these examples of AI-related discrimination: “a hiring tool that rejects women applicants by mimicking the existing features of a company’s male-dominated workforce or a job advertisement delivery system that reinforces gender and racial stereotypes” by directing advertising for specific jobs to certain individuals.

Regulations clarify how antidiscrimination laws apply to use of AI

The regulations do not codify new antidiscrimination laws; instead, they clarify how the state’s existing antidiscrimination laws apply to employers’ use of emerging AI systems to make employment decisions.

The regulations also do not prohibit employers from using AI tools in employment decision-making; rather, they prevent discriminatory use of the tools. This means employers should monitor AI tools and train employees who use the tools to ensure they do not inadvertently discriminate against applicants or employees based on protected characteristics.

Additionally, the regulations extend employers’ record-keeping requirements as described later in this article.

CDA’s employment analysts have updated relevant resources to help members comply with the regulations.

Employers may need to provide reasonable accommodation

Employers may want to read the full text of the ADS-related changes, which include definitions of artificial intelligence, automated-decision system, machine learning and other newly added terms with examples of tasks performed by these systems and processes.

The most conspicuous change is the addition of the following language for the 18 protected characteristics under California law:

“It is unlawful for an employer or other covered entity to use an automated-decision system or selection criteria (including a qualification standard, employment test, or proxy) that discriminates against an applicant or employee or a class of applicants or employees on the basis of …”

Employer-dentists may ask, what might ADS-related employment discrimination look like?

ADS can be used to screen resumes for certain terms or patterns or analyze word choice, voice and even facial expressions during online interviews. This use could potentially discriminate against an individual based on their race, national origin, gender, disability or other protected characteristics.

Or a dental practice may ask an applicant to take an ADS assessment that includes tests, questions or puzzles that elicit information about a disability and may therefore constitute an unlawful medical inquiry.

Employers must maintain AI data, other personnel records for four years

The amended regulations also require employers and other covered entities to:

Preserve applications, personnel records, selection criteria, automated-decision systems/AI data and all other records affecting applicants and employees for four years — up from two.Consider the need to provide an applicant with reasonable accommodation if ADS is used during applicant screening or interviewing,

When might an employer need to provide reasonable accommodation?

The use of ADS to measure an applicant’s dexterity, reaction time or other ability might discriminate against individuals with certain disabilities or other protected characteristics. To avoid unlawful discrimination, an employer may need to provide the applicant with the required reasonable accommodation.

Due diligence: Testing AI for bias prior to implementation

To defend a claim of discrimination using AI, employers can show that they performed due diligence prior to implementing AI or an ADS. Due diligence includes understanding the “what” and “how” of the data in a system’s algorithm. Racial, ethnic and sexual bias are possible, for example, if the data used to train an AI system is not representative of the population.

Teresa Pichay, CDA’s senior regulatory compliance analyst, advises, “Seek independent studies published about the system you are considering. Assess the findings or, if applicable, the lack of independent studies or anti-bias testing of the system.”

Demonstration of other quality efforts to avoid illegal discrimination may also defend the employer, but a lack or absence of effort will likely harm the employer’s position.

Even when exercising due diligence, employers should commit to maintaining human oversight over all AI-driven processes. “While AI can offer valuable insights and efficiencies, final decisions, particularly those that significantly impact individuals, will always involve human judgment,” says CDA Employment Practices Analyst Michelle Coker.

Use updated CDA resources for record-keeping, AI

Member-dentists can sign in to use CDA resources, including Records and Documents Retention Guidelines,Employee Records and Artificial Intelligence and Dentistry: Legal and Regulatory Considerations.