California has introduced the 'No Robo Bosses' Act (SB 7), which aims to regulate the use of AI in workplace decisions such as promotions, demotions, and terminations, requiring human oversight in these processes.

This legislative effort follows Colorado's pioneering approach to regulating AI in the workplace, focusing on algorithmic fairness and worker rights.

The bill seeks to protect employee personal information by preventing AI systems from accessing sensitive data and predicting future behaviors that could lead to negative outcomes.

Endorsed by labor unions, the Act is considered a pioneering move in establishing restrictions on workplace AI usage.

Luana de Mello from Engage PEO highlights the act's uniqueness, emphasizing the requirement for businesses to regularly audit their AI systems for compliance.

However, legal experts express concerns that the California bill could impose significant compliance costs on businesses, particularly smaller ones, which may face increased litigation risks.

These compliance costs arise from the need to audit AI tools and implement new policies, potentially leading to litigation from employees.

Recently, a federal moratorium on state AI regulations was proposed but removed from a major budget bill, leaving the future of AI legislation uncertain.

Concerns have been raised about the potential conflict between a proposed 10-year federal moratorium and state efforts like California's.

A recent survey indicates that approximately 60% of managers currently use AI for making decisions regarding raises, promotions, layoffs, and terminations.

This legislation is part of a broader trend, with over 30 states exploring their own AI regulations, including Colorado's law addressing algorithmic discrimination, set to take effect in 2026.

Angelina Evans, an attorney, emphasizes that the intention behind such laws is to ensure transparency and protect workers' rights from being violated unknowingly.