Artificial Intelligence in the California Workplace

Employers across California are increasingly using artificial intelligence to handle decisions that were once made by humans: reviewing resumes, ranking job candidates, scheduling shifts, evaluating performance, and even recommending terminations.

AI-powered tools now influence who gets hired at major companies, which employees receive shift opportunities, and how performance metrics are weighted. In many cases, employees never know that an algorithm – not a manager – played a role in a decision that affected their livelihood.

This shift raises a significant question for California workers: what happens when an algorithm gets it wrong – or gets it wrong in a way that harms people in protected categories?

Can an AI System Discriminate?

Artificial intelligence does not harbor prejudice the way humans do. But AI systems can produce discriminatory outcomes for reasons that have nothing to do with intent.

Many AI tools are trained on historical data. If that historical data reflects past discriminatory practices – such as workplaces that historically undervalued women or underrepresented people of color – the AI may replicate or amplify those patterns. This is sometimes called algorithmic bias.

In California employment law, what matters is often not whether discrimination was intended, but whether a protected characteristic was a substantial motivating reason for an adverse employment decision – or whether a facially neutral practice has a disparate impact on a protected class.

This legal framework may be relevant when:

• A hiring algorithm screens out applicants from protected demographic groups at a disproportionate rate
• A performance management system generates lower scores for older employees or employees with disabilities
• A scheduling tool consistently assigns fewer hours to employees based on patterns that correlate with protected characteristics
• An AI-driven termination recommendation system targets a particular protected group at higher rates

The California Legal Framework

California Fair Employment and Housing Act (FEHA)

The FEHA is California’s primary anti-discrimination law. It applies to employers with five or more employees and prohibits discrimination in hiring, compensation, training, promotion, discipline, and termination based on protected characteristics including:

• Race and national origin
• Sex and gender identity
• Pregnancy and related conditions
• Age (40 and over)
• Disability (physical or mental)
• Sexual orientation
• Religion
• Marital status
• Military or veteran status

Under FEHA, a discrimination claim may be based on disparate treatment (intentional discrimination) or disparate impact (a neutral policy that disproportionately harms a protected group). AI-driven decisions may implicate both theories, depending on the circumstances.

California’s Approach to Automated Decision-Making

California has been among the most active states in the country in addressing automated decision-making. California regulations effective October 1, 2025, address automated decision systems in employment contexts and reflect the state’s recognition that algorithmic accountability is an emerging concern for California workers.

While laws in this area continue to evolve, California workers should be aware that the legal landscape around AI in the workplace is rapidly developing – and that existing protections under FEHA may apply to AI-influenced decisions.

The Unruh Civil Rights Act

The Unruh Civil Rights Act generally does not apply to employment discrimination. However, it may apply in certain nonemployment contexts where AI-driven discrimination affects a business’s provision of goods or services.

Real-World Examples of AI Employment Discrimination

AI Hiring Tools

A 2023 federal lawsuit against Workday, Inc. alleged that the company’s AI-powered applicant-screening tools disproportionately screened out candidates based on race, age, and disability status. The case has drawn national attention because it names the AI vendor – not just an employer – as a potential defendant. The case remains pending, and the allegations have not resulted in a final determination that Workday is liable.

For California workers, this illustrates an important point: depending on the circumstances, AI-discrimination claims may potentially involve an employer that uses the AI tool, a company that develops or operates the tool, or both.

AI-Driven Performance Management

Some employers use AI-generated metrics – delivery times, response rates, task completion scores – to evaluate employee performance. If these metrics systematically penalize employees with disabilities who require reasonable accommodations, or older workers who perform tasks differently, the AI system may produce outcomes that raise FEHA concerns.

Automated Scheduling

Retail and food service workers in California are frequently subject to AI-generated scheduling systems. If these systems consistently assign fewer desirable shifts to employees in protected categories, or if scheduling decisions effectively force workers with certain protected characteristics out of a job, California law may provide relevant protections.

AI-Generated Termination Recommendations

In some large organizations, AI systems flag employees for discipline or termination based on performance data. If such a system generates recommendations that disproportionately target employees in protected categories, the employer’s adoption and use of that system may be subject to scrutiny.

What Evidence May Be Relevant

If you believe an AI system played a role in an adverse employment decision you experienced, documenting relevant information that you lawfully possess may be important. Depending on your situation, this might include:

• Records or information about the AI system or tool your employer used
• Comparative information about how similarly situated employees were treated
• Any communications from your employer about the basis for the decision
• Your own performance records, reviews, and documentation of your work
• Information about whether accommodations were in place or requested

Do not access restricted company systems or obtain confidential, proprietary, privileged, or personal information that you are not authorized to possess. The specific information relevant to your situation will depend on the facts of your case. An employment attorney can help assess what documentation may be meaningful.

Practical Considerations for California Employees

File Timelines May Apply

California employment discrimination claims are typically subject to filing deadlines. Under FEHA, employees generally have three years from the date of the alleged discrimination to file a complaint with the California Civil Rights Department (CRD, formerly the DFEH), with additional deadlines governing the right-to-sue process.

Because these deadlines can affect your legal options, consulting with an attorney sooner rather than later may be advisable if you believe you have been affected.

Note: Filing timelines are subject to change and may vary depending on specific circumstances. This is not legal advice. Consult a qualified employment attorney for guidance specific to your situation.

Identifying Whether AI Was Involved

Many employees do not know whether an AI system was involved in a decision about their employment. Employers are not always required to disclose this information proactively. However, beginning January 1, 2027, California privacy regulations may provide notice, access, and opt-out rights when covered businesses use certain automated decisionmaking technology for significant employment decisions.

If you suspect automated tools were used, an employment attorney may be able to help identify whether and how to seek relevant information.

Employer Responsibility

California employers cannot avoid liability for discriminatory outcomes simply because an algorithm – rather than a human – produced the recommendation. Employers who adopt and implement AI tools remain responsible for ensuring those tools do not result in violations of applicable law.

Frequently Asked Questions

Blackstone Law, APC, headquartered in Beverly Hills, California, represents employees across the state in employment-discrimination cases. Our team focuses on plaintiff-side employment law, with cases spanning Los Angeles, Beverly Hills, and communities throughout California.