Update Applicable to:	Effective Date
All Covered Entities	Expected: No earlier than 2026

What happened?

On May 9, 2025, the California Privacy Protection Agency (CPPA) released modified proposed regulations under the California Consumer Privacy Act (CCPA) that would impose new obligations on businesses using Automated Decision-making Technology (ADMT), including in employment-related decisions.

If finalized, these rules will significantly expand consumer rights and compliance requirements for businesses using AI, algorithms, or other automated tools to process personal information.

Overview:

What’s Changing? The CPPA’s proposed regulations aim to ensure transparency, fairness, and accountability in the use of ADMT. These rules apply when ADMT is used to make significant decisions about consumers, including:

• Hiring and employment decisions (like productivity).
• Education enrollment.
• Access to financial, healthcare, or housing services.
• Profiling for behavioral advertising.

Special Considerations for Employers: While the CPPA regulations are not employment law, they do apply when employers use personal information in ADMT systems for hiring, promotion, or compensation.

Employers must:

• Provide clear notices to applicants and employees.
• Allow opt-outs or appeals where required.
• Avoid discriminatory impacts and document safeguards.

Additional Details

What Is an Automated Decision System (ADS)? Under California’s proposed CCPA regulations, ADMT refers to any technology that processes personal information and uses computation to make or facilitate decisions. This includes tools used in employment-related decisions, such as hiring, promotions, compensation, or productivity monitoring, when personal information is involved.

Examples include:

• AI and machine learning models
• Resume screeners
• Emotion or facial recognition tools.
• Personality or aptitude tests
• Systems that profile consumers or target ads
• Productivity monitoring tools
• Time-tracking and activity analysis software

Key Employer Responsibilities: Businesses using ADMT must:

1. Provide Pre-Use Notices: Inform consumers before using ADMT, including:

• The purpose of the ADMT
• How it works
• How to opt out or appeal decisions

2. Offer Opt-Out Rights: Consumers can opt out of ADMT used for significant decisions or profiling, unless exceptions apply (e.g., fraud prevention or safety).

3. Enable Access Requests: Consumers may request:

• The logic and output of ADMT.
• How it influenced a decision.
• How they compare to others.

4. Conduct Risk Assessments: Before using ADMT for significant decisions or profiling, businesses must:

• Assess privacy risks.
• Document safeguards.
• Submit abridged reports to the CPPA.

5. Ensure Human Oversight: If relying on ADMT for employment decisions, businesses must:

• Allow appeals to qualified human reviewers.
• Ensure reviewers can override ADMT outputs.

Source References

• CPPA – CALIFORNIA CONSUMER PRIVACY ACT REGULATIONS
• Proposed Regulations CPPA Page
• OAL Proposed Regulations Under Review (Search for “Privacy”)
• CPPA – Laws & Regulations
• Fact Sheet – Draft ADMT

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