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California Governor Gavin Newsom has signed a landmark law barring employers from relying solely on artificial intelligence when firing or disciplining workers. The measure places California businesses under a distinct regulatory framework for workplace AI decisions.

SB 947, known as the No Robo Bosses Act, prohibits businesses from exclusively using “automated decision-making systems” for employee discipline and termination. It also restricts employers from using AI as the principal tool behind such actions.

When an employer relies primarily on AI output, a human reviewer must corroborate the proposed decision using additional information. That material can include managerial evaluations, peer reviews and personnel files.

Affected workers must receive written notice that AI was primarily used in the disciplinary or termination decision. Employers must also describe the employee data used by the system and provide a human contact who can further explain the outcome.

“No worker should ever be fired or disciplined by a machine, AI or not. Artificial intelligence systems have the potential to boost productivity, but they’ve also made errors and misjudgments and exhibited bias,” California State Senator Jerry McNerney, the bill’s author, told CNBC.

McNerney, a Democrat, first introduced the act in 2025 after organized labor pushed for limits on management’s use of AI in adverse employment actions. Lorena Gonzalez, president of the California Federation of Labor Unions, AFL-CIO, and lead sponsor of the act, celebrated its enactment.

Newsom has recently taken several other actions involving AI. These include a broader executive order addressing potential existential risks from AI models and a measure establishing a state framework for independent evaluation and auditing of those models.

The governor said the federal government was abdicating “its responsibility to protect Americans.” His workplace measure arrives as automated management tools gain traction across American businesses.

An OECD survey published late last year found the United States leading other countries in the adoption of automated management software and systems. According to the results, 90% of American managers said their firms had adopted at least one tool to “instruct, monitor or evaluate workers.”

Concerns about such systems are already surfacing at major employers. Former Meta employees filed a lawsuit in July alleging that AI assisted systems ranked and selected workers for layoffs, disproportionately affecting employees who had taken medical or family leave, though Meta denied the allegations.

Walmart and Amazon workers are also increasingly concerned that human resources decisions are becoming automated, according to a May survey from United for Respect. The nonprofit unsuccessfully sought shareholder approval last summer for a measure requiring Walmart management to disclose more about its workforce use of AI.

The No Robo Bosses Act previously stalled in October when Newsom vetoed it despite overwhelming support in both state legislative chambers. Newsom objected to a requirement that businesses notify workers in advance whenever an AI system capable of affecting work conditions was being used.

McNerney reintroduced the proposal in February and removed that advance notification requirement. He also stripped language that would have extended protections to gig workers, a provision that had drawn heavy criticism from Uber and Lyft.

Business opposition persisted. Robert Singleton, the Chamber of Progress’ senior director of policy and public affairs for California and US West, warned Newsom that the phrase “primarily relies” lacked a definition and gave employers no objective standard for determining when technology became the primary basis for a decision.

“Uncertainty about whether ordinary tools qualify as regulated automated decision systems could discourage employers from using technologies that improve consistency, identify safety risks, or help managers make better-informed decisions,” Singleton wrote. The law’s supporters, however, benefited from rising public suspicion toward AI in the workplace.

A July Gallup poll found 39% of Americans believed AI does more harm than good, up from 31% in 2025. An August Pew Research study found 71% believed AI will “take people’s jobs,” an increase of around 7% from roughly two years earlier.

The issue has attracted support across party lines. Steve Hilton, California’s Republican nominee for governor, backed the act and argued that employers should not be allowed to use AI to decide whether someone is fired, demoted, loses regular hours or loses access to an income program.

California’s rules go further than earlier restrictions adopted elsewhere. Illinois Public Act 103-0804 requires employers to notify workers when AI is used for specified employment purposes, but it stops short of prohibiting agentic digital systems from making employment decisions.

Federal legislation carrying the same name was introduced in June by Democratic U.S. Senators Ed Markey of Massachusetts and Brian Schatz of Hawaii. Similar proposals have appeared in New York, Louisiana and New Jersey, although those states have not enacted comparable workplace restrictions.

The Electronic Frontier Foundation called Newsom’s signature a “strong step toward giving workers the protections they need in workplaces that use automated decisionmaking systems.” The organization said it would continue working with labor groups on policies intended to protect human dignity in workplaces using automated systems.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.