If an algorithm, score or flag plays any part in how you discipline or terminate California employees, you have until July 1, 2027 to get your process in order. Once the use of an automated decision system (ADS) is shown, the law puts it on you to prove you didn't primarily rely on it, or that you followed the rules; each violation is subject to a $500 civil penalty. California Senate Bill 947, widely known as the "No Robo Bosses Act," adds a new Part 5.5.5 to the California Labor Code, and Governor Newsom signed it on September 30, 2026 (Chapter 859, Statutes of 2026). Here is what it requires, where it reaches background screening, and the checklist to work through before the deadline.
Who SB 947 Covers
"Employer" is defined broadly: private employers, state and local government bodies, special districts, the University of California and California State University systems, community college and school districts, and labor contractors, with no employee-count threshold, public employers included.
The law applies to an "automated decision system" (ADS): a computational process using machine learning, statistical modeling, data analytics or AI that produces a score, classification or recommendation used to assist or replace human discretionary decision-making and that materially impacts natural persons. It expressly excludes basic IT tools and, importantly for screening, "a database, dataset or other compilation of data": an ordinary records-based background report isn't, by itself, an ADS. A scoring or risk-ranking layer built on top of one may be, and it may already be in scope under California's FEHA rules on automated decision systems.
What SB 947 Prohibits in Any Use of an ADS
Three prohibitions apply to any ADS use, not only discipline and termination: an employer may not use an ADS to violate any labor, employment, civil rights or occupational health and safety law; to infer an employee's protected status; or to predict and take adverse action against a worker for exercising a legal right. There is no broader ban on predictive analytics or risk scoring as such.
The Discipline and Termination Rules
A narrower set of duties applies specifically where an employer primarily relies on an ADS output to discipline or terminate someone, not merely where ADS plays some role:
- No sole reliance on an ADS to discipline or terminate.
- Human corroboration. A human must corroborate the decision using the data behind the ADS output or other corroborating information, such as supervisory evaluations, personnel files or peer reviews.
- No use of uncorroborated output. If the output cannot be corroborated, or a reviewer finds it inaccurate, incomplete or misleading, it cannot be used to discipline or terminate.
- Data description on request. The employee can request a meaningful, objective description of their own data the ADS used.
The Written Notice
Where an employer primarily relied on an ADS, it must give a separate, plain-language written notice at the time it communicates the decision, in the language it uses for routine employee communications, and by a simple method such as email. The notice must state four things: that the employer primarily relied on an ADS; that a human reviewed the decision and corroborated the ADS output; contact information for a human the employee can reach for more information about the decision and about their right to a description of their own data the ADS used; and that retaliation for exercising these rights is prohibited. The act separately bars retaliating against an employee for using these rights, filing a Labor Commissioner complaint, or cooperating with an investigation.
Carve-Outs and Enforcement
The law doesn't apply where a collective bargaining agreement waives it in clear terms with its own protection from algorithmic management, or where a federal statute, regulation or binding contract requires the ADS use for aircraft, national security, military, space or defense purposes.
SB 947 doesn't preempt local ordinances that go further, and other states are writing their own ADS rules, so a multi-site employer has to check each jurisdiction. The KRESS State-by-State Compliance Guide tracks those requirements as they change.
The Labor Commissioner, the Attorney General and local public prosecutors can all enforce SB 947, at a civil penalty of $500 per violation; the act doesn't define what counts as a single violation, so this isn't necessarily a per-employee figure.
Where This Reaches Background Screening and FCRA
The monitoring or scoring layer described above is where screening meets SB 947: primary reliance on it for a discipline or termination decision triggers the corroboration and notice duties. That runs alongside the Fair Credit Reporting Act (FCRA), not instead of it: FCRA already requires a pre-adverse action notice with a copy of the consumer report, and an adverse action notice once the decision is made, whenever a consumer report factors into the decision. SB 947's notice duties can satisfy similar state-law notice rules, but not a federal statute like FCRA, so both notices are still required. KRESS reports supply the verified records behind that decision and the audit trail showing where they came from; the discipline or termination call stays with you, which is also where SB 947 puts it. Where a score rather than a record drives the outcome, the harder question is when an AI hiring score becomes a consumer report in its own right.
Compliance Checklist Before July 1, 2027
- Map every ADS touchpoint in discipline and termination workflows, including vendor tools and monitoring layers, against the statutory definition and its exclusions.
- Build the corroboration step into the workflow wherever primary reliance is possible.
- Set a rule to stop uncorroborated output from being used in a decision.
- Draft the required written notice, with all four statutory contents, in the languages and delivery methods your workforce uses.
- Review vendor contracts for access to the data and logic behind any ADS output.
- Train HR and managers on the primary-reliance trigger and the burden-of-proof rule.
- Check for a qualifying collective bargaining waiver or federal carve-out before assuming the law applies in full.
Frequently Asked Questions
When do SB 947's requirements start? Governor Newsom signed it September 30, 2026. It becomes operative July 1, 2027.
Does SB 947 only apply to discipline and termination? No. The human-corroboration and notice duties are specific to discipline and termination, but the law's general prohibitions, including the bar on using an ADS to infer protected status or retaliate for a legal right, apply to any ADS use.
What counts as an automated decision system? A computational process using machine learning, statistical modeling, data analytics or AI that produces a score, classification or recommendation used to assist or replace human discretionary decision-making and materially impacts natural persons. Spam filters, firewalls, antivirus software, identity management tools, calculators, and plain databases are excluded.
Can employers still use AI tools in discipline decisions? Yes, but not alone. Where it primarily relies on an ADS, a human must corroborate the decision and the employer must give written notice.
What are the penalties? A $500 civil penalty per violation, enforceable by the Labor Commissioner, the Attorney General or local prosecutors. The act doesn't define what counts as a single violation, so it isn't necessarily a per-employee figure. In a civil action brought by the Labor Commissioner or a public prosecutor, the petitioner can also seek temporary or preliminary injunctive relief, with reasonable attorney's fees and costs. The employer bears the burden of proving it did not primarily rely on the ADS, or that it complied.
How does this affect background screening? A standard background report is excluded from the ADS definition. A scoring layer built on top of one is not automatically excluded, and primary reliance on it for discipline or termination triggers the corroboration and notice duties. FCRA's own notices still apply separately whenever a consumer report is used.
Get Ready Before July 1, 2027
July 1, 2027 is the date your discipline and termination process has to be able to stand up on its own, and the burden of showing it falls on you, not on your vendor. KRESS gives you verified records and a documented workflow behind the decision, with real people to call when a file needs explaining; you still make the hiring and termination call. Talk to a KRESS compliance expert about your screening and monitoring workflow before the deadline.
