- California AB-331 will regulate the data collected and processed by automated decision tools for a broad array of contexts
- It requires businesses to conduct impact assessments, which are aimed at reducing bias against a list of named groups
- The proposed regulations would go into effect as soon as January 1st, 2025
California Assembly Bill 331, termed “Automated Decision Tools”, was introduced to committee in January. On 04/11/2023, it passed committee 7-2, and that we think it has a good chance of passing.
The bill is the latest to specifically target “automated decision tools”. Unlike NYC Local Law 144, which focuses on “automated employment decision tools”, and focuses only on tools in the employment context (more specifically, hiring and promoting), CA AB-331 will include “consequential decisions” made in the following contexts:
- Essential utilities
- Family planning
- Financial services
- Criminal justice
- Legal services
In short, it is MUCH broader.
It also requires both employers (called “deployers” in the text) and tool vendors (called “developers” in the text) to perform annual impact assessments.
The goal is to prevent bias against the following groups, and impact assessments must include potential for adverse impacts to them:
- National origin
- Limited English proficiency
- Veteran status
- Genetic information
These assessments would need to be publicly displayed and submitted to the California Civil Rights Department.
Employers would also need to describe safeguards in place, detail how the tools will be used, and disclose any ways that its use differs from how the vendor intended the tool to be used. They would also need to share this with applicants.
Vendors would have similar explanation and disclosure obligations.
The proposed penalties for failing to comply would be significant: Up to $10,000 per violation, where each day a tool is used without an impact assessment performed would be a separate violation.
Where it stands
The California Automated Decision Tools bill was introduced 01/30/2023, and as of 04/11/2023 it has been amended twice. A hearing was held 04/11/23 where it was voted on and is poised to proceed to the next committee.
A group of industry representatives attended the hearing and voiced their opposition. However, they also mentioned their willingness to work with the assembly on amending the bill to solve important issues while reducing impacts to their members.
The proposed regulations would go into effect as soon as January 1st, 2025.
We provide the latest updates on a weekly basis via our newsletter. We hope you will sign up!