California Proposes Revising Employment Regulations for Use of Artificial Intelligence (AI)

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California Proposes Revising Employment Regulations for Use of Artificial Intelligence (AI)

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.

ClearStar – a leading provider of Human Capital Integrity℠ technology-based services specializing in background checks and medical screening services – offers innovative screening for advanced industries like technology with candidate-friendly mobile solutions and support for multiple data entry points. To learn more, contact ClearStar.

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    Thomas Ahearn - News Blog Editor and Public Relations Specialist

    Thomas Ahearn is our News Blog Editor and Public Relations Specialist. Our News Blog provides information about the background check industry to employers, HR professionals, recruiters, and consumers. ClearStar's News covers a variety of topics including Ban the Box, credit reports, criminal records, data breaches, drug testing, Equal Employment Opportunity Commission (EEOC), E-Verify, Fair Credit Reporting Act (FCRA), HR technology, identity theft and fraud, jobs reports, lawsuits involving screening, Millennial workforce, privacy issues, social media background checks, and workplace violence.

    At ClearStar, we are committed to your success. An important part of your employment screening program involves compliance with various laws and regulations, which is why we are providing information regarding screening requirements in certain countries, region, etc. While we are happy to provide you with this information, it is your responsibility to comply with applicable laws and to understand how such information pertains to your employment screening program. The foregoing information is not offered as legal advice but is instead offered for informational purposes. ClearStar is not a law firm and does not offer legal advice and this communication does not form an attorney client relationship. The foregoing information is therefore not intended as a substitute for the legal advice of a lawyer knowledgeable of the user’s individual circumstances or to provide legal advice. ClearStar makes no assurances regarding the accuracy, completeness, or utility of the information contained in this publication. Legislative, regulatory and case law developments regularly impact on general research and this area is evolving rapidly. ClearStar expressly disclaim any warranties or responsibility or damages associated with or arising out of the information provided herein.

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