Governor Newsom recently signed a new law in response to the increasing use of automated decision systems in employment. Senate Bill 947, which becomes effective on July 1, 2027, imposes new restrictions on how employers use automated decision systems (“ADS”) in employment determinations, severely limiting employers’ reliance on them in certain contexts and outright banning their use in others.

First and foremost, it’s important for business owners in California to understand what qualifies as an ADS under this law, as the definition extends well beyond generative AI ...