Starting on October 1, 2025, California employers must follow new regulations from the Civil Rights Council (CRC) regarding “automated-decision systems”, or “ADS” — that is, tools that use AI, algorithms, or other computer processes to help make employment decisions.

What’s Covered?

An ADS is any technology that makes or influences decisions about jobs or benefits — like:

• Resume screening software
• Online assessments, puzzles, and tests
• Interview tools that analyze tone, facial expressions, or word choice
• Recruiting ads targeted to specific groups
• Data analytics using applicant or employee information

Importantly, basic tools (like spreadsheets or calculators) are not considered ADS if they don’t actually make employment decisions.

Why the New Rules Matter

The CRC’s position is clear: if an ADS results in discrimination based on race, gender, age, disability, religion, or any other protected characteristic, it’s unlawful under the California Fair Employment and Housing Act.

Employers — and even outside vendors providing ADS tools — can be held liable for violating the CRC’s regulations.

Key Requirements

Recordkeeping: Keep all ADS-related records (applications, personnel files, ADS data) for four years.

Anti-bias testing: Not required, but highly recommended — courts may look for evidence of efforts to prevent bias.

Reasonable accommodations: ADS tools that measure skills, reactions, or communication styles must be flexible for applicants with disabilities or religious needs.

Takeaways for Employers

California employers should take the following steps to ensure compliance with the new regulations:

• Review your current hiring and HR technologies to ensure they will not be considered ADS
• Audit how your tools affect applicants and employees
• Keep ADS records organized and accessible
• Work with legal counsel and vendors to make sure your systems are compliant

The bottom line? AI and related tools can save time, but they also bring legal risk. Employers should use them carefully, document their workplace decisions, and put appropriate safeguards in place before October 1.

About Shaw Law Group 

At Shaw Law Group, we do more than practice employment law—we partner with employers to build compliant, respectful, and productive workplaces. From day-to-day advice and counsel to impartial workplace investigations, proactive HR audits, dynamic training programs, and sensitive pre-litigation matters, our experienced team helps clients stay ahead of the curve—and out of court.