California bans 'robo bosses': Newsom signs first US law on AI firing decisions

California Governor Gavin Newsom has signed SB 947, the No Robo Bosses Act, the first law in the United States to bar employers from relying solely on automated decision-making systems to fire or discipline workers. The signing reverses Newsom's own veto of a nearly identical bill in October 2025 and installs the country's strictest oversight framework for workplace AI.

The law prevents California businesses from exclusively using "automated decision-making systems" in matters of employee discipline and termination, and restricts AI's use as the principal tool in such decisions.

What does the new law actually require?

Under SB 947, employers that rely "primarily" on AI output for termination or disciplinary decisions must now have a human reviewer corroborate those decisions using additional information: managerial evaluations, peer reviews, and personnel files.

The statute also mandates worker notification. Affected employees must receive:

• Written notice that AI was "primarily used" in their termination or disciplinary decision
• A description of the employee data used by the system
• A human point of contact who can further explain the decision

"No worker should ever be fired or disciplined by a machine, AI or not. Artificial intelligence systems have the potential to boost productivity, but they've also made errors and misjudgments and exhibited bias," California State Senator Jerry McNerney, the bill's author, told CNBC. "AI must remain a tool controlled by humans, not the other way around."

McNerney, a Democrat, first introduced the act in 2025 after a concerted push by organized labor to erect guardrails around management's use of AI in adverse actions against workers.

Why the stakes are high

The United States leads the world in adoption of automated management software. Survey results published late last year by the OECD found that 90% of U.S. managers say their firms have adopted at least one tool to "instruct, monitor or evaluate workers" — a wider adoption rate than in any other surveyed country.

Litigation and worker anxiety are already testing the technology. Meta faces a lawsuit, filed in July, in which former employees allege AI-assisted systems were used to rank and select workers for layoffs, disproportionately affecting employees who had taken medical or family leave. Meta has denied the allegations.

A May survey by the nonprofit United for Respect, which has roots in the labor movement and the retail sector, found Walmart and Amazon workers increasingly concerned that HR decisions are being automated. The nonprofit failed last summer in an effort to convince Walmart shareholders to approve a measure requiring management to disclose more about AI use involving its workforce.

Why did Newsom change his mind?

SB 947's momentum hit a wall in October when Newsom vetoed it, despite the bill clearing both legislative chambers with overwhelming majority support. His concern centered on a provision that would have compelled businesses to alert workers in advance whenever an AI system was in use that could affect work conditions.

"I share the author's concern that in certain cases unregulated use of ADS [automated decision-making software] by employers can be harmful to workers," Newsom wrote in his veto explanation. "However, rather than addressing the specific ways employers misuse this technology, the bill imposes unfocused notification requirements on any business using even the most innocuous tools."

Upon reintroducing the bill in February, McNerney removed the pre-notification requirement and stripped language extending the Act's protections to gig workers — a provision that had drawn heavy criticism from rideshare giants Uber and Lyft. Those changes blunted the lobbying by tech and commerce groups that helped doom the 2025 version, though California business leaders still rallied against SB 947 in the weeks before enactment.

"The bill's obligations generally apply when an employer 'primarily relies' on an automated decision system, but that critical term is never defined. Employers are given no objective standard for determining when a technology has moved from merely informing a decision to being the primary basis for it," Robert Singleton, the Chamber of Progress' senior director of policy and public affairs for California and US West, wrote in a letter to Newsom earlier this month urging a veto. "Uncertainty about whether ordinary tools qualify as regulated automated decision systems could discourage employers from using technologies that improve consistency, identify safety risks, or help managers make better-informed decisions."

The bill also arrived on the governor's desk amid record public distrust of workplace AI. A July Gallup poll found 39% of Americans believe AI does more harm than good, up 8 points from 31% in 2025. Pew Research, in a study released in August, found 71% of Americans think AI will "take people's jobs" — an increase of roughly 7% from about two years ago.

How did labor and politics shape the outcome?

Lorena Gonzalez, president of the California Federation of Labor Unions, AFL-CIO and lead sponsor of the No Robo Bosses Act, framed the signing as a national turning point.

"When working people organize, we get results. Workers across California have demanded that our state lead the way in regulating AI in our workplaces. And today, we see that begin to happen," Gonzalez said in a statement after Newsom signed the law. "Today, California's workers and our unions have changed the national narrative on how Americans can fight back and win against AI taking over our jobs and workplaces."

The politics cut across party lines. Newsom, who is weighing a 2028 presidential run in an election where AI policy is expected to be a hot-button issue among Democratic hopefuls, has taken a flurry of recent AI actions. Earlier this month he signed a broader executive order addressing potential existential risks posed by AI models "before it's too late" and a measure creating a state framework for independent evaluation and auditing of AI models. He said of the executive order that the federal government was abdicating "its responsibility to protect Americans."

On the Republican side, Steve Hilton, California's Republican nominee for governor, came out in full support of the No Robo Bosses Act earlier this month.

"The California Chamber…says rules requiring human review and basic accountability are too burdensome for employers. What a ridiculous thing for them to say," Hilton wrote in an open letter to Gonzalez. "In some ways, I don't think SB 947 goes far enough. Employers should not be allowed to use AI to decide whether someone is fired, demoted, loses regular hours, or is shut out of the program they rely on for income."

How does it compare to other AI laws?

California's framework goes further than any prior U.S. regulation of AI in employment decisions. Illinois' Public Act 103-0804, which went into effect this past January, requires employers to notify workers when they use AI for a set of specified employment purposes — but it stops short of prohibiting agentic digital systems from making employment decisions outright.

The Electronic Frontier Foundation said in a statement to CNBC that signing the law is a "strong step toward giving workers the protections they need in workplaces that use automated decisionmaking systems," and that it plans to continue working with labor groups to "advance policies that protect human dignity in the workplace."

What happens next?

SB 947 is the first bill of its kind to become law, but it may not be the last. In June, U.S. Senators Ed Markey (D-Mass.) and Brian Schatz (D-Hawaii) introduced federal legislation bearing the same name, which would bar employers from "relying on automated decision systems to make work-related decisions." That bill, presented to a Congress that has been slow to regulate AI, was effectively dead on arrival. Similar legislation has been proposed in New York, Louisiana, and New Jersey without action.

California has moved first on other AI fronts too: earlier this year, New York became the first state to ban construction of new AI data centers — wait, no, it was California that enacted that ban. California's action on robo bosses may now provide the push other states need to move on workplace AI legislation, with California businesses navigating the nation's most stringent oversight regime in the meantime.