AI in Hiring Rules
California’s Civil Rights Department finalized new FEHA regulations governing the use of artificial intelligence and automated decision systems in employment. Effective October 1, 2025, these regulations create compliance obligations that most employers using AI in hiring, promotion, or termination decisions aren’t ready for.
The regulations require employers using AI or automated decision systems to conduct regular bias audits, maintain documentation of how these systems operate, and ensure human oversight in employment decisions. “Using AI” doesn’t just mean sophisticated machine learning models—it includes common applicant tracking systems (ATS), resume screening software, scheduling algorithms, and performance evaluation tools. Many ATS platforms use AI in the background for candidate ranking and filtering.
⚠️Here’s the problem: many employers adopted these tools without understanding they’re now subject to FEHA’s anti-discrimination requirements. If your ATS or AI system produces disparate impact based on protected characteristics, you’re liable under FEHA—even if you didn’t design the system and don’t fully understand how it works.
The regulations also impose notice requirements when AI plays a significant role in employment decisions. Employees and applicants must be informed that automated systems are being used, which systems are in use, and how they can request human review of AI-driven decisions.
Are you tracking which employment decisions involve AI—including your ATS—and do you have bias audit protocols in place?
If you’re using AI, automated decision systems, or ATS platforms in employment, consult with an employment attorney to ensure your practices comply with FEHA’s new requirements.
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Please note that this article is for informational purposes only and should not be considered and is not legal advice, and does not constitute an attorney-client relationship. It is recommended to consult with an attorney directly for specific guidance pertaining to your business or individual situation.
This post shares general information based on common patterns I see in California workplaces. It is not legal advice, does not create an attorney-client relationship, and outcomes depend on specific facts — no lawyer can guarantee a result. Past results do not guarantee or predict future outcomes. AI may have been used to create this post. All content reviewed by a CA attorney before publication. This post may be attorney advertising.
Michael Trust Law, APC, 703 Pier Avenue, Ste. B367, Hermosa Beach, CA 90254: michaeltrustlaw.com