“The Software Flagged It” Is Not a Discipline Decision in California
Plenty of owners assume that if a software tool flags a worker, the tool made the call and the business is covered.
Where the Assumption Breaks
That assumption fails the moment the flag turns into a write-up or a termination. A California law signed this year puts a person, and a paper trail, between the alert and the decision.
The Rule Starting July 1, 2027
Under SB 947, operative July 1, 2027, a California employer cannot base a discipline or termination decision on an automated decision system alone. When the system’s output is the main reason for the decision, a person has to check it against the underlying data or other evidence, such as supervisor evaluations, personnel files, work product, or witness interviews.
If that check fails, or the person concludes the output is wrong, incomplete, or misleading, the business cannot lean on it for the decision. How much review is enough turns on what the tool measures and what else is in the file.
The Notice That Travels With the Decision
When the decision is delivered, the worker must be told that the employer primarily relied on an automated system, that a person reviewed and corroborated it, and how to reach a human contact. The notice also covers the worker’s right to a description of their own data that the system used and the bar on retaliation for exercising these rights.
Where Small Teams Get Caught
Small teams use these tools too.
An owner without in-house HR often treats a scheduling, attendance, or productivity alert as the decision itself, then signs off without asking what data sits behind it or whether anyone checked it.
Enforcement runs through the state, with civil penalties, and the new rules sit on top of the discrimination and retaliation claims that can already follow a poorly supported termination. Our page on employee relations for employers covers how discipline decisions hold up when they are questioned.
The alert is only the start.
If any tool in your business produces scores, flags, or alerts that feed discipline, the July 2027 rules may reach decisions you currently treat as routine. That is what a first conversation is for.
Contact Michael Trust Law, APC for a no-charge initial consultation. The facts determine what needs to be addressed – and how much of a conversation that takes.
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.