Picture the scene. It’s late afternoon on a job site in a cramped office trailer. A supervisor has been informed by upper management that, for budgetary reasons, it is necessary to “let someone go,” and that they have the unenviable task of choosing the employee to be terminated. The supervisor stares at a laptop screen, where some software has already done the heavy lifting: productivity scores, absenteeism flags, and a ranking that puts one employee name near the bottom. The machine has spoken. The human supervisor is about to highlight that employee’s name, click “confirm”, and begin the termination process. Starting July 1, 2027, California law says this type of AI-driven procedure may no longer be lawful.

SB 947: “No Robo Bosses”

On September 30, 2026, California enacted SB 947 — also called the “No Robo Bosses Act.” This law regulates automated decision systems (“ADS”) — computer processes built from machine learning, data analytics, statistical modeling, or artificial intelligence that analyze data and produce a simplified output (scores, rankings, recommendations), which are then used to inform (or replace) human judgment calls about personnel.

Essentially, what SB 947 says is that employers may not rely solely on ADS in determining whether to discipline or terminate an employee. An employer can use ADS to inform such decision-making, but when ADS is the primary basis for the decision, a human must confirm the result using real evidence — the underlying data, personnel files, supervisor evaluations, work product, peer reviews, or witness interviews. If a human fails to corroborate it, or finds the output to be erroneous or misleading, the employer can’t use it. The new law says that a human must be the one making the ultimate decision.

Additionally, when ADS is “primarily” relied on in making discipline or termination decisions, the employer must give the employee plain-language written notice at the time of the decision, confirming that an automated system was used and that a human reviewed and corroborated the ADS’ output. The notice must be a separate, stand-alone, plain-language communication that also: (a) identifies a human contact the employee can direct questions to, and (b) expressly states that retaliation for exercising rights under the Act is prohibited. The law does not, however, define what it means to “primarily rely upon an ADS,” leaving employers without a clear standard for when the corroboration and notice requirements are triggered, until the Labor Commissioner or courts provide guidance. Until then, best practice for California employers is to assume the requirements apply whenever ADS output is a substantial factor in the decision and to document a genuine (human) review in those cases.

What the Law Actually Covers

SB 947 applies only to ADS used in discipline and termination decisions. It does not cover hiring, promotions, or other employment decisions. However, under SB 947, “ADS” is defined broadly enough to potentially capture many modern tools and familiar processes that an employer might not intuitively anticipate being encompassed by the new law, including time-and-attendance systems, GPS or vehicle-tracking tools, scheduling or workforce-management software, and other analytics platforms. It does, however, exclude everyday administrative software, such as basic spam filters, firewalls, antivirus software, login/access controls, calculators, and plain databases.

Practical Steps Owners Can Take Now

The effective date of SB 947 is July 1, 2027. There is still time to review systems and processes, and to update company materials preemptively:

• Take inventory of tools and processes that produce scores, rankings, flags, or recommendations that might be used in discipline or termination decisions;
• Instruct managers and supervisors that they must independently review supporting information and exercise real judgment. Emphasize that they cannot simply accept software output;
• Update handbook or policy language on technology use, monitoring, and the discipline process;
• Prepare a simple, plain-language notice template for situations where an ADS is primarily relied upon, and establish a procedure for documenting the specific human corroboration (who reviewed what and when);
• Review how tools handle absences, productivity, or safety metrics so protected leave, weather, or other legitimate factors are not overlooked;
• Document decisions contemporaneously; good records help if questions arise later.

Although we have yet to see how SB 947 will be applied, it is the first law of its kind in America. As AI edges ever closer to ubiquity, this law will no doubt yield significant changes to how employers lawfully and unlawfully use AI to make personnel decisions. Alleged violations of the new law will find their way into  wrongful termination litigation – further accentuating the importance of the adopting mitigation measures before June of next year.

James Richards, Esq., is an attorney with the law firm of Dunn DeSantis Walt & Kendrick. His practice focuses on the litigation of commercial and business disputes.

Dunn DeSantis Walt & Kendrick provides a broad spectrum of legal services to businesses of all sizes, from small, local start-ups and non-profits to large, national companies. DDWK’s real estate development and construction practice includes representing all segments of the development and construction industries on both private and public projects. 

You can find additional information and resources related to helping business owners and their businesses on the DDWK website.