California Workers Can No Longer Be Fired by AI Alone — Newsom Has Until Sept. 30

A Second Try at Stopping the "Robo Boss"

If you use software to help decide who gets written up, demoted, or let go, California is about to test whether that's still legal to do without a human checking the machine's work. Senate Bill 947, nicknamed the "No Robo Bosses Act," is sitting on Governor Gavin Newsom's desk right now, and he has until September 30, 2026 to sign it, veto it, or let it become law without his signature.

For small business owners who use scheduling software, performance-tracking tools, or AI-assisted HR platforms, this isn't an abstract Sacramento fight. If SB 947 becomes law, it would be the first statute in the country to specifically bar employers from letting an algorithm fire or discipline a worker without a person reviewing the decision first.

What SB 947 Actually Requires

Authored by state Senator Jerry McNerney, SB 947 targets what the bill calls "automated decision systems," or ADS — software that uses data, algorithms, or AI to make or materially inform employment decisions. Under the bill as passed by the Legislature, employers would have to:

• Provide human oversight and verification any time an automated system is used to help decide on termination or discipline
• Notify workers when an automated decision system played a role in a termination or disciplinary action taken against them
• Stop using systems that rely on a worker's personal data to "predict" future behavior, such as flagging someone as a flight risk or a likely rule-breaker

Violations would carry a civil penalty of $500 per violation, enforced by the California Labor Commissioner, the state Attorney General, or local prosecutors. Notably, the bill does not create a private right of action, meaning individual workers can't sue directly — but a business that racks up violations across its workforce could still face a meaningful bill.

Why This Is a Second Attempt

This isn't California's first swing at the issue. A nearly identical bill, SB 7, passed the Legislature in 2025 and landed on Newsom's desk — and he vetoed it. In his veto message, Newsom said he agreed with the goal but thought the bill's restrictions were too broad, warning they could sweep in "innocuous" tools like shift-scheduling software and get in the way of businesses using technology to identify and reward top performers.

Lawmakers went back and narrowed the bill's scope this time around, focusing specifically on termination and discipline rather than the full range of employment decisions. Whether that narrower version satisfies Newsom's concerns is the open question business owners are now watching.

What This Means If You Run a Small Business

Most coverage of SB 947 has focused on big employers with automated HR platforms, but the bill's language applies to any business using qualifying technology — including smaller companies that rely on third-party payroll or workforce-management software with built-in performance scoring or automated write-up features.

If you're a small business owner using any tool that flags employees for discipline, ranks performance automatically, or generates termination recommendations, it's worth asking your software vendor now whether their product would count as an "automated decision system" under the bill's definition. Waiting until January, when the law would take effect if signed, leaves little time to adjust internal review processes.

Practical steps to consider now:

• Identify which HR, scheduling, or performance tools your business uses that make or influence disciplinary recommendations
• Build in a documented human review step before any termination or write-up tied to those tools
• Prepare a simple notice process so affected employees are told when an automated system contributed to a decision about them

Because enforcement runs through the Labor Commissioner and the Attorney General rather than private lawsuits, the practical risk for most small employers is closer to a compliance audit than a courtroom battle — but $500 per violation can add up quickly if a business has multiple flagged incidents across its workforce.

The Bigger Picture: A National Test Case

California has a track record of setting labor standards that other states eventually adopt, from paid sick leave to meal-break rules. Employment attorneys tracking SB 947 have described Newsom's decision as one that could set the tone for how AI in hiring and firing gets regulated nationally, given that no other state currently has a law this specific about automated termination decisions.

If Newsom signs it, expect similar bills to surface in other state legislatures in 2027. If he vetoes it a second time, it likely signals that lawmakers will need to narrow the concept even further — perhaps limiting it to companies above a certain size — before it has a real shot at becoming law anywhere.

How to Protect Your Business Either Way

Regardless of what happens on September 30, this is a good moment for small business owners to review how they document employment decisions generally. A written, human-reviewed record of why someone was disciplined or let go is good practice whether or not software played a role — it's also one of the best defenses against wrongful termination claims.

If you're still deciding how your business is structured to handle employment liability, it's worth revisiting the basics. Choosing the right business entity can affect how personal liability is handled if an employment dispute arises, and most small businesses benefit from starting with a properly formed LLC to create a legal separation between the business and its owner. It's also worth checking whether your current business insurance policy includes employment practices liability coverage, since that's the type of policy that typically responds to wrongful termination or discrimination claims — including ones that might arise from AI-assisted HR decisions.

And if any of your workforce includes contractors rather than employees, make sure you're clear on the distinction — misclassifying a worker as an independent contractor instead of an employee creates a separate set of legal risks entirely, on top of anything SB 947 might introduce.

What Happens Next

Newsom's office has not signaled publicly which way he's leaning. Business groups, including the California Chamber of Commerce, have historically opposed broad ADS restrictions, while labor unions and worker advocacy groups are pushing hard for a signature this time, arguing the narrower scope addresses last year's veto concerns. Small business owners with employees in California should watch for an announcement by September 30 — and start reviewing their HR technology now, regardless of the outcome.

How This Compares to Other States

California isn't operating in a vacuum here — it's just further along than everyone else. Colorado passed an AI Act in 2024 aimed at "high-risk" automated decision systems, though it covers a broader range of consequential decisions, including employment, and has faced its own rounds of amendment and delay before taking effect. Illinois has also layered AI-specific disclosure requirements onto its existing employment discrimination law, requiring employers to tell applicants when AI is used in hiring.

What makes SB 947 different is its narrow, surgical focus on the termination and discipline moment specifically, rather than trying to regulate every AI use case in the employment lifecycle at once. That's largely a direct response to the criticism that killed SB 7 last year — lawmakers concluded a narrower bill had a better chance of surviving a second trip to the governor's desk.

Frequently Asked Questions

Does this apply if I only use AI for scheduling, not firing decisions?

Based on the bill's current language, scheduling and workflow tools that don't factor into discipline or termination decisions fall outside SB 947's scope — that's precisely the "innocuous" use case Newsom said last year's broader bill swept in unintentionally. If your software only assigns shifts or tracks hours, it likely isn't the target here.

What counts as sufficient "human oversight"?

The bill's text doesn't spell out a rigid checklist, which means implementing regulations or early enforcement guidance from the Labor Commissioner will likely fill in the details if SB 947 is signed. Until that guidance exists, the safest approach is a documented review by a person with authority to override the system's recommendation — not just a rubber-stamp sign-off.

Does this only apply to large employers?

No. Unlike some California employment laws that only kick in above a certain employee count, SB 947 as passed does not include a small-business size exemption, which is part of why it's worth paying attention to even if you run a lean operation.

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