On October 1, 2025, the CRD’s new regulations aimed at protecting employees and applicants from potentially discriminatory employment decisions made using automated decision systems (ADS) will take effect. These new regulations expand coverage for unlawful discrimination in the workplace and have important records requirements. Employers have only six weeks to evaluate the regulations, connect with counsel, and implement appropriate changes.
The CRD’s new regulations implement a series of defined terms, create different record retention requirements, and expand potential liability.
ADS Broadly Defined: ADS encapsulates a broad range of AI uses in the workplace, such as technology that makes predictive assessments, systems that evaluate facial expressions or other biometric information in interviews, or programs used to screen applicants. Essentially, any use of AI in assisting an employer to screen, evaluate candidates or that contributes to the hiring or other employment decision making is covered.
Record Keeping: Employers who utilize any form of ADS must maintain records related to ADS data, for four years.
Third Party Liability: Employers will be responsible for third-party vendor’s ADS technology as the regulations define “agent” as “any person acting on behalf of an employer, directly or indirectly, to exercise a function traditionally exercised by the employer or any other FEHA-regulated activity.” Thus, the importance of auditing vendors along with contractual agreements for financial responsibility from claims arising from ADS have increased importance.
How To Help Your Company?
- Implement Protocols: With six weeks left, Companies should work on dialing in protocols for record retention requirements. Record keeping is cumbersome, and processes are a critical step to help alleviate the burden. Future litigation may turn on whether an adverse inference of discrimination should be drawn from a failure to retain records.
- Audit: Companies that use ADS technology should regularly perform audits and evaluate the output for potential shortcomings and other unintended consequences.
Get ahead of compliance issues by scheduling and addressing the new regulations before they take effect on October 1, 2025. CDF’s Privacy Practice Group will continue to monitor updates on AI, privacy, and related issues impacting employers. Don’t hesitate to reach out to your favorite CDF attorney in our Privacy Practice Group (Dalia Khatib, Dan Forman, Linda Wang, or Christopher Dawood).