Written By ESR News Blog Editor Thomas Ahearn

On March 15, 2022, the California Fair Employment & Housing Council (FEHC) proposed “Draft Modifications to Employment Regulations Regarding Automated Decision Systems” that would revise the state’s non-discrimination laws with regard to employers and employment agencies that use or sell employment screening tools and services with artificial intelligence (AI), machine learning, and automated decision-making.

In the proposal, an “Automated Decision System (ADS)” is defined as a “computational process, including one derived from machine-learning, statistics, or other data processing or artificial intelligence techniques, that screens, evaluates, categorizes, recommends, or otherwise makes a decision or facilitates human decision making that impacts employees or applicants.” It includes, but is not limited to, the following:

  • Algorithms (rules or instructions typically used by a computer to make a calculation, solve a problem, or render a decision) that screen resumes for particular terms or patterns.
  • Algorithms that employ face and/or voice recognition to analyze facial expressions, word choices, and voices.
  • Algorithms that employ gamified testing that include questions, puzzles, or other challenges used to make predictive assessments about an employee or applicant, or to measure characteristics including but not limited to dexterity, reaction time, or other physical or mental abilities or characteristics.
  • Algorithms that employ online tests meant to measure personality traits, aptitudes, cognitive abilities, and/or cultural fit.

The proposal specifies that the use of an ADS in a manner that is intentionally discriminatory or is neutral but results in discriminatory impact is unlawful under state law, and liability extends to third parties that act on behalf of an employer by providing services relating to various facets of employment, including recruiting, screening, hiring, payroll, and benefits administration if they adversely (negatively) affect employment.

The proposal defines an “Employment Agency” that may use an ADS as “any person undertaking for compensation to identify, screen, and/or procure job applicants, employees, or opportunities to work, and includes, but is not limited to, any person that provides automated decision-making systems or services involving the administration or use of those systems on an employer’s behalf.”

The California FEHC will discuss the proposed regulations in a remote (virtual) public meeting scheduled for 3:00 p.m. Pacific Daylight Time on Friday, March 25, 2022. The meeting will be available on Zoom or at 1-669-900-6833 (Meeting ID: 88056357506). If approved, the proposal will be open for public comment. The FEHC may approve the draft as proposed or make modifications to the proposal based on comments received. 

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