In March 2022, the California Fair Employment & Housing Council (FEHC) proposed modifications to employment regulations regarding “Automated Decision Systems” that would revise the state’s non-discrimination laws with regard to employers and employment agencies that use or sell employment screening tools and services with Artificial Intelligence (AI).
An “Automated Decision System (ADS)” is defined as a “computational process, including one derived from machine-learning, statistics, or other data processing or artificial intelligence techniques, that screens, evaluates, categorizes, recommends, or otherwise makes a decision or facilitates human decision making that impacts employees or candidates.” An ADS includes:
- Algorithms (rules or instructions typically used by a computer to make a calculation, solve a problem, or render a decision) that screen resumes for particular terms or patterns.
- Algorithms that employ face and/or voice recognition to analyze facial expressions, word choices, and voices.
- Algorithms that employ gamified testing that include questions, puzzles, or other challenges used to make predictive assessments about an employee or candidate, or to measure characteristics including but not limited to dexterity, reaction time, or other physical or mental abilities or characteristics.
- Algorithms that employ online tests meant to measure personality traits, aptitudes, cognitive abilities, and/or cultural fit.
An “Employment Agency” is defined as “any person undertaking for compensation to identify, screen, and/or procure job candidates, employees, or opportunities to work, and includes, but is not limited to, any person that provides automated decision-making systems or services involving the administration or use of those systems on an employer’s behalf.”
The proposal specifies that using an ADS in a way that is intentionally discriminatory, or is neutral but results in discriminatory impact, is unlawful under state law. Liability would extend to third parties that act on behalf of an employer by providing services relating to various facets of recruiting, screening, and hiring if they adversely affect employment.
The California FEHC discussed the proposed regulations in a virtual public meeting on Friday, March 25, 2022. If approved, the proposal will be open for public comment. The FEHC may approve the draft as proposed or make modifications to the proposal based on comments received. To read the complete proposal, click here.
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