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Be on the lookout: AI bills impacting the workplace to monitor in 2025

11/25/24

By: Lauren K. Adjieff and Gaia T. Linehan

It’s no secret that Artificial Intelligence (“AI”) has the potential to change the workforce. The California Legislature is trying to keep pace with the ever-evolving digital landscape and its collateral effects. AB 2930 and AB 3058 are two examples of repeated attempts to account for these effects, which will likely be revisited in 2025. 

AB 2930 prohibits algorithmic discrimination and AB 3058 offers an “unconditional benefit pilot program” for employees whose jobs are replaced by AI. 

AB 2930 would require employers to: (1) Perform an impact assessment before an automated decision system is employed; and (2) After the system is employed, on an annual basis, perform an impact assessment. The impact assessment must include a statement of the purpose of the system, its intended benefits, its intended uses, and its deployment context(s). Each impact assessment must be provided to the Office of Civil Rights Department (“OCR”). The Bill prescribes an obligation by the employer to notify each candidate or employee of the use of the automated decision system and provides the candidate or employee with an alternative decision-making process, if feasible, and an opportunity to correct any incorrect personal data. 

The Bill would also prohibit the use of an automated decision system if the impact assessment identifies a reasonable risk of algorithm discrimination, i.e., the algorithm shows a preference for potential or existing employees based on actual or perceived race, color, ethnicity, sex, religion, age, national origin, limited English proficiency, disability, veteran status, genetic information, reproductive health, or any other classification protected by state or federal law. 

If a candidate or an employee files a charge with OCR against an employer, the Bill will allow OCR to bring a civil action against the employer and seek $25,000 as a civil penalty per violation. Yet, the Bill will also include a ‘safe harbor’ provision, in which OCR must give the employer a 45-day advance written notice before initiating a civil action; and no civil action will be filed against the employer if it provides an express written statement, under penalty of perjury, that the violation has been cured. 

This Bill is a reintroduction of a 2023 bill that did not make it out of the legislature. This time around, the author has some high-profile industry support for the bill, so it could fare better this time around. 

As for AB 3058, the purpose of the Bill is to aid individuals who lose their jobs due to automation or artificial intelligence. If AB 3058 is enacted, the Bill would establish the California Unconditional Benefit Income (CalUBI”) Pilot Program to be administered by the Employment Development Department until January 1, 2029. Under AB 3058, upon a determination that an individual is unemployed due to automation or artificial intelligence, an eligible individual may submit an application to the department to receive $1,000 each month for a period of 12 months, starting as late as January 1, 2027, and until January 1, 2028. The individual would also need to establish receipt of the maximum amount of unemployment compensation benefits. 

Ultimately, a hearing on the Bill was canceled during the legislative session ending August 31, 2024, and questions remain about how this program will be funded. No doubt, the conversation surrounding the regulation of AI will continue to develop. Employers should be mindful of potential pitfalls when integrating artificial intelligence into their workflow; and in the coming years, the possibility of benefits that may be available to employees resulting from a reduction in staff. 

Employers are always encouraged to reach out to their legal counsel when making decisions on these issues. As always, FMG is here to help.

For more information on the topic, contact Lauren K. Adjieff at lauren.adjieff@fmglaw.com, Gaia T. Linehan at gaia.linehan@fmglaw.com, or your local FMG attorney.