Beginning October 1, 2025, California’s Fair Employment and Housing Act (FEHA) regulations, which apply to employers with five or more employees, will be amended to address employers’ use of automated-decision systems (ADSs). The amended regulations apply the state’s existing antidiscrimination laws to new technologies like artificial intelligence and introduce key definitions. Highlights are below.

Automated-Decision Systems

The updated regulations require that employers comply with the state’s existing antidiscrimination laws when using an ADS. For employment purposes, an ADS is any computational process that makes or supports employment decision-making, such as in hiring, promotion, or termination. An ADS uses or draws from artificial intelligence, algorithms, statistics, or other types of data processing to:

📌 Make predictive assessments about applicants or employees, measure their skills, abilities, personality or cultural fit, or otherwise screen and evaluate them.

📌 Direct job advertisements or other recruiting materials to certain groups.

📌 Screen resumes for particular terms or patterns.

📌 Analyze facial expressions, word choice, voice, or other observed traits from online interviews.

📌Analyze employee or applicant data from third parties.

Accommodation Obligations

The new regulations also address that the use of an ADS can lead to discrimination based on disability or religious creed. If an ADS evaluates abilities like dexterity, reaction time, or cognitive traits, it could screen out individuals with disabilities unless reasonable accommodations are provided. Similarly, if an ADS conflicts with an applicant’s or employee’s sincerely held religious belief or practice, employers should consider whether reasonable accommodations are required.

Recordkeeping

Employers must retain automated-decision system data for four years from the date the record was created or the date of the related employment action, whichever is later. Automated-decision system data is data used by or produced from an ADS, as well as any data used to develop or customize an ADS.

Action Items

📌 Ensure ADS data is retained for at least four years.

📌 Make sure HR and managers are aware that accommodations for disability or religion might be required when using an ADS in employment decisions.