By Khari Johnson
Committees in both houses of the California Legislature will decide this week whether more than half a dozen bills that seek to protect people from AI will move on to final votes.
One closely watched bill before the Assembly appropriations committee, Senate Bill 7, would require employers to give workers 30 day’s notice before they use AI to make decisions related to employment such as compensation, hiring, firing, or promotions. It would also give workers the right to appeal decisions made by AI and prevent employers from making predictions about a worker related to their immigration status, ancestral history, health, or psychological state.
A recent audit of algorithmic management tools sold to companies suggests that many use AI to determine pay, a trend that started among gig workers nearly a decade ago that researchers say is now becoming widespread. Tests have found that AI that sifts through resumes can disqualify or downgrade a job applicant for arbitrary reasons like race or sex or because they’re wearing glasses. Inferences based on brain data, which can reveal a person’s health or the words or images they form in their mind, would also be prohibited under the legislation, which will be considered in a hearing scheduled for Friday, Aug. 29.
SB 7 is one of a trio of bills supported by the California Federation of Labor Unions, AFL-CIO, this year that attempt to regulate automated systems in the workplace. The other two bills, Assembly Bill 1331 and AB 1221 both involve regulating workplace surveillance.
The other two bills, Assembly Bill 1331 and AB 1221 both involve regulating workplace surveillance.
Federation president Lorena Gonzalez told CalMatters that employers shouldn’t be allowed to predict if you’re pregnant or what you think about your employer or boss and use that information against you.
“We have to set up guardrails against every kind of surveillance and AI tool to ensure that workers have the privacy and respect and autonomy that they deserve,” said Gonzalez, who continues to work with labor unions in other states to prevent AI from harming frontline workers.
A race to use AI?
Sen. Jerry McNerney, the bill’s author, said there seems to be a race to use AI to displace workers or squeeze more efficiency out of them.
In response to questions about criticism that SB 7 will drive costs up, McNerney told CalMatters in a statement that he plans to introduce amendments that will substantially reduce the cost of implementing the bill.
SB 7 is one of a number of bills on what is known as the suspense calendar. Each year, hundreds of bills with a price tag above $50,000 are added to the calendar. Appropriation committees in the Assembly and Senate then have the power to designate some bills as too expensive or otherwise use cost to justify holding or effectively killing the legislation. Roughly two out of three bills make it from the suspense calendar to a final vote.
Making sure private companies comply with SB 7 could cost the state $600,000 or more, according to an assembly appropriations committee staff analysis released last week. But the cost for the state’s own agencies to comply is unknown, because the state doesn’t know how many automated employment systems it uses. Earlier this year the California Department of Technology allowed state agencies to self report use of high-risk automated systems like those used in employment. Nearly 200 state agencies reported no use of such technology despite the fact that state agencies are currently using or have used high risk automated systems in the past.
Cost barrier
The cost of compliance or enforcement has stalled AI employment regulation before.
Last year a similar version of the bill was pulled by Bauer-Kahan, a Democrat from San Ramon, after amendments limited its provisions to assessing employment. That bill attracted opposition from big tech companies but also a range of nearly 100 companies including Blue Shield of California, dating app company Bumble, biotech company Genentech, and pharmaceutical company Pfizer.
Nearly 80 businesses or groups oppose the bill, including the California Hospital Association and major health care providers like Kaiser Permanente. The advocacy group California Life Sciences argues that passage could lead providers to pass on higher costs to patients, while the California Credit Union League argues that compliance with the bill will slow innovation.
Both bills were authored by California lawmakers with extensive histories of regulating AI. McNerney previously served as co-chair of an AI subcommittee in Congress. As chair of the assembly privacy and consumer protection committee, Bauer-Kahan is one of the most powerful regulators of AI in California.
Partly because of the price tag for businesses that deploy AI, the California Privacy Protection Agency acted against the wishes of unions, digital rights, and privacy groups and voted last month to weaken its own draft rules to regulate how businesses use automated decision- making technology. Conversely, the California Civil Rights Department finalized rules to protect workers from automated discrimination during recruitment, hiring, and promotion. Those rules go into effect in October.
Passing bills that force employees to notify workers if they use AI to determine things like compensation is a critical first step, said Veena Dubal, a coauthor of the study released last week and an outspoken critic of AI that harms workers to enrich tech companies. Because people don’t know this tech is in use today, she hopes that notifying people increases public knowledge, and that leads to a ban of algorithms that determine how much people get paid.
To those who say the cost of implementing these bills is too high, she warns that algorithms are already influencing how much money people make, and that cost gets passed down to taxpayers. Algorithms can also locate union organizers, automate discrimination, or terminate people who managers decide they don’t like.
“These all have extraneous costs on society, extraordinary costs,” she said. “Workers, voters, taxpayers, we should all have a say in the kind of world that these companies are creating with the disproportionate power that they hold.”
If these bills don’t pass, Dubal said, it’s a signal that AI regulation has stalled in California.
“As much as Gov. Newsom wants to juxtapose himself against Donald Trump and California wants to be a sort of savior to the rest of the nation in this moment of extreme right authoritarian actions,” Dubal said, “it’s really important that the state not continue to concede to big tech companies who are very much in bed with the president.”
