New regulations have been enacted in California that directly affect how employers can use automated decision systems (ADSs) in hiring, compensation, promotion, and other employment decisions. The regulations enacted by the CPPA apply to any ADS that substantially replaces human decision-making, while those enacted by the CCRC apply to any that facilitates human decision-making.
The following steps can help determine proper usage.
- Document and Assess Use of ADS
Identify the use of an ADS in employment decisions, including recruitment, termination, screening, compensation, hiring, and promotion. Document all uses, functions, and decision points.
- Assess for Risk and Anti-Bias
Prior to updating or deploying an ADS, a business that is subject to the CPPA must assess the risks associated with its use. The assessment must include the potential for discriminatory impacts on protected groups and any risks associated with personal data processing. Anti-bias testing is allowed under the CCRC rules as a defense for liability.
- Give Notice and Maintain Transparency
The regulations under the CPPA require an employer to inform an individual when an ADS is in use to make significant decisions related to employment. The notice should explain how the system works, what personal data is being processed, and how the output impacts employment outcomes. CPPA regulations also outline the rights to access, appeal, correct, and delete information in an ADS.
- Maintain Records
The regulations also require employers to retain all records that relate to significant employment decisions influenced or made by an ADS for four years.
This article is informational and does not constitute legal or financial advice. Consult with an employment lawyer or accountant for additional clarification on how these changes impact your company.
