California’s New AI Firing Law: What Employers Must Do Now
By Ryan Danz, Founding Attorney, Employer Guidance Group PC
If any system you use to manage employees scores attendance, flags performance problems, or recommends who gets written up or let go, you are closer to a Labor Code violation than you probably think. On September 30, 2026, Governor Newsom signed SB 947 — the "No Robo Bosses Act" — and buried in the compliance language is something every small and mid-size employer needs to see: a private right of action, with punitive damages on the table, for getting this wrong.
Most coverage of SB 947 has focused on big tech and gig platforms. That's a mistake. The law reaches any employer using any automated tool — including the scheduling app, the applicant tracking system, or the "coaching" dashboard your payroll vendor bundled in — to help decide who gets disciplined or fired.
What SB 947 Actually Regulates
SB 947 adds Labor Code Part 5.5.5 (Sections 1520–1526.7), chaptered as Chapter 859, Statutes of 2026. It becomes operative July 1, 2027.
The law defines an "automated decision system" broadly: any computational process built on machine learning, statistical modeling, data analytics, or AI that produces a score, classification, or recommendation used to assist or replace human discretion, and that materially affects a worker. That sweeps in far more than a chatbot. A scheduling tool that auto-flags "excessive" lateness, a performance platform that ranks employees, or a background-check or productivity-monitoring service that generates a risk score can all qualify if the output feeds into a discipline or termination call.
The Core Rule: A Human Has to Actually Check the Work
The statute does not ban AI-assisted HR decisions outright. It bans relying solely on one. Before an employer disciplines or terminates based on an ADS output, a human reviewer must independently corroborate that output with additional information — not simply approve whatever the software recommended.
That distinction matters more than it sounds. A manager who clicks "approve" on an algorithm's termination recommendation without pulling any independent record — attendance logs, a direct conversation, a documented performance history — has not done what the law requires. The statute is built around a real, documented second look, not a rubber stamp.
Three Things an Automated System Can Never Be Used For
| Prohibited use (Lab. Code § 1522(a)) | What it means in practice |
|---|---|
| Enabling a violation of labor, safety, or civil rights law | You can't use a tool's output as cover for an outcome that would itself violate wage-hour, Cal/OSHA, or anti-discrimination law |
| Inferring protected status under FEHA (Gov. Code § 12940) | A system can't estimate race, disability, pregnancy, religion, or other protected traits from behavioral data and factor that into a decision |
| Predicting and punishing protected activity | A tool can't be used to flag who is likely to file a claim, join a union, or take protected leave — and then act against them for it |
New Notice and Data Rights for Employees
When an employer primarily relies on an ADS to discipline or terminate someone, the law requires a written, plain-language notice after the fact — stating that an ADS was used, that a human reviewer corroborated it, and describing the employee's rights under the statute. Employees also gain the right to request a meaningful, objective description of their own data the system used in reaching that outcome.
The anti-retaliation provision (Lab. Code § 1526) is written broadly: employers cannot discharge, demote, suspend, or otherwise retaliate against an employee for exercising rights under the statute, filing a Labor Commissioner complaint, or cooperating with an investigation.
How This Gets Enforced — and Why the Civil Suit Is the One to Worry About
| Enforcement path | Who brings it | What's at stake |
|---|---|---|
| Labor Commissioner | State agency | $500 civil penalty per violation |
| Public prosecutor | District attorney or city attorney | Same statutory remedies |
| Employee civil action | The employee, in superior court | Injunctive relief, punitive damages, and attorney's fees and costs |
The $500 statutory penalty is the smallest part of the exposure. SB 947 gives employees a direct civil action, and that action can reach punitive damages plus fee-shifting — on top of whatever wrongful termination or FEHA claim already exists on the same facts. For an employer with several employees affected by one flawed scoring tool or one mis-set threshold, that is not a $500 problem.
Action Checklist Before July 1, 2027
- Inventory every system that scores, flags, ranks, or recommends action on an employee — scheduling and attendance software, performance platforms, applicant tracking systems, and any vendor "coaching" or monitoring tool.
- For every tool that touches a discipline or termination decision, name a specific human reviewer and require them to document the independent information they checked beyond the system's output.
- Draft your written post-use notice template now, before the operative date arrives.
- Build an intake process for employee requests for their own ADS data, and route it through whoever already handles personnel file requests.
- Train managers that "the system flagged it" is never a complete answer, and that questioning or overriding the software is required, not optional.
- Ask every HR, scheduling, and monitoring vendor directly whether their tool infers protected characteristics or is used for predictive risk-scoring of employees.
- Calendar July 1, 2027, and schedule a compliance review at least 90 days ahead of it.
If you already rely on AI-assisted hiring tools, this law is the direct sequel to that exposure — see our earlier guide on AI in hiring compliance for the intake-side rules that now pair with SB 947's discipline-and-termination-side rules. And because the enforcement structure here echoes the penalty stacking we've written about before, our guide to avoiding PAGA penalties is worth a parallel read.
Getting ahead of a law like this is almost always cheaper than responding to the first demand letter after it takes effect. If you want help inventorying which of your systems qualify as an automated decision system under SB 947, or building the human-review and notice process the statute requires, our business audit services are built for exactly this kind of gap-check. You can also reach out directly to talk through your specific tools before July 2027.
Disclaimer
This article is general information about California law. It is not legal advice, and reading it does not create an attorney-client relationship. Employer Guidance Group PC is not your attorney unless and until you have signed a written engagement agreement with the firm.
California employment law changes constantly. The information here may be incomplete, out of date, unverified, or incorrect, and it does not account for your specific facts — and outcomes turn on facts. Do not act, or refrain from acting, on the basis of this article. Consult a licensed attorney about your own situation before making any employment decision.
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