What happened?

On February 15, 2024, California lawmakers introduced bill AB 2930, which seeks to regulate the use of artificial intelligence (“AI”) in various industries to combat “algorithmic discrimination”, especially when the “automated decision tools,” that make “consequential decisions.”

What are the details?

General Bites:

• Automated decision tools (ADTs) are being used to assess eligibility for a benefit or penalty.

• ADTs have been found to exhibit biases and consequently have resulted in discriminatory impacts and harm to marginalized communities. 

Key Bites for Employers

• The bill defines “algorithmic discrimination” as:
  • A scenario where an ADT results in unjust differential treatment.
  • Adverse effects on individuals based on protected attributes like race, color, ethnicity, sex, national origin, disability, and veteran status.

• The bill requires ADT developers and users (including employers) to:
  • Conduct and document an impact assessment annually.
  • Detail the tool’s intended use, data structure, and statistical analysis rigor.
  • Examine potential negative effects on protected categories such as race, color, ethnicity, sex, religion, age, and national origin.

• Employers using an ADT:
  • Are required to Notify any person subject to a consequential decision by an ADT.
  • Are required to establish a Governance Program
  • Are exposed to Civil Liability Actions

• Employers would have the opportunity to cure violations within 45 days of receiving written notice of the alleged violations of the bill.

Business Considerations

• Employers should monitor the development of this bill if they employ an ADT, since it will require them to update policies, practices, and procedures, along with compliance on state-mandated reports.
• Employers should consider taking steps to mitigate the risk of algorithmic discrimination if they are using an ADT. Being proactive could save a lot of trouble and headaches.

Source References

• CA AB2930

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