New AI and Workplace Surveillance Laws: What Employers Should Know Now
Although AI tools have become commonplace in the workplace, the laws governing their use are still developing. States across the country are considering legislation that would impose new transparency, notice and human-oversight requirements on employers using these technologies. As a result, employers may soon face compliance obligations that did not exist a year ago.
On Sept. 30, 2026, California became one of the first states to adopt comprehensive workplace AI legislation. With other states expected to follow, California’s law provides an early look at what may be coming and a useful starting point for employers evaluating their use of AI and surveillance tools.
SB 947 – The “No Robo Bosses Act”
Effective July 1, 2027, SB 947 governs employers’ use of automated decision systems (ADS) in discipline and termination but does not displace the California Privacy Protection Agency’s automated decision-making regulations or preempt more protective local laws. The bill codifies that misuse of ADS may violate labor, safety, employment or civil rights laws. Specifically, SB 947 prohibits employers from using ADS to (a) infer an employee’s protected status, (b) predict or penalize workers for exercising their legal rights, and (c) rely solely on ADS output for discipline or termination.
SB 947 requires human corroboration of ADS outputs on which an employer relies, which may include outputs such as supervisor evaluations, personnel files or witness interviews. When relying on those outputs to make an employment decision, employers must provide contemporaneous written notice identifying the relevant ADS outputs, providing contact information for further inquiry and confirming that retaliation is prohibited. Employees may request a description of their own data used by the ADS and are protected from retaliation for doing so.
Once SB 947 takes effect, if a plaintiff alleges a violation of the statute and shows that the employer used ADS, the burden shifts to the employer to prove that it did not primarily rely on ADS. Remedies for a violation include injunctive relief, punitive damages, attorneys’ fees and costs and a $500 civil penalty per violation.
SB 951 – AI Technology Displacement Notices Under Cal/WARN
As of Jan. 1, 2027, when a covered mass layoff, relocation or termination is caused in whole or substantial part by AI or other automated technology, SB 951 requires the employer’s Cal/WARN notice to state “This notice is for a technology displacement” and to identify:
- The number, classification or occupation and work location of the affected positions
- The job functions being automated
- The category or type of AI or automated technology causing the displacement
Cal/WARN’s existing civil penalties extend to violations of SB 951.
AB 1331 – Workplace Bathroom Surveillance
Absent a court order, AB 1331 bars employers from using workplace surveillance tools, including video and audio surveillance, time tracking and geolocation in workplace bathrooms. Limited exceptions apply, such as recording entry and exit and using identification badges that do not record audio or video.
Remedies for a violation include injunctive relief, punitive damages, attorneys’ fees and costs and penalties of up to $500 per violation.
AB 1883 – AI Emotion Recognition and Neural Data
Effective Jan. 1, 2027, AB 1883 bars employers from using AI workplace surveillance tools that recognize, infer or predict an employee’s emotional state or collect other information generated by measuring central or peripheral nervous system activity.
Related Developments
As other states, including Connecticut and Colorado, continue to legislate on this issue, employers should monitor these developments and consider reviewing their current use of AI and surveillance tools to prepare for similar requirements. If you have questions about how these laws may affect your business or need help creating or updating an AI policy for your organization, please contact Michael Tierce, Lisa Scidurlo, Sasha Philips, Chris Harris or a member of the Stevens & Lee Labor and Employment Group.
