California FEHC Proposes Sweeping Regulations Regarding Use of Artificial Intelligence and Machine Learning in Connection With Employment Decision Making

The California Fair Employment and Housing Council (FEHC) recently took a major step towards regulating the use of artificial intelligence (AI) and machine learning (ML) in connection with employment decision-making. On March 15, 2022, the FEHC published Draft Modifications to Employment Regulations Regarding Automated-Decision Systems, which specifically incorporate the use of "automated-decision systems" in existing rules regulating employment and hiring practices in California. The draft regulations seek to make unlawful the use of automated-decision systems that "screen out or tend to screen out" applicants or employees (or classes of applicants or employees) on the basis of a protected characteristic, unless shown to be job-related and consistent with business necessity. The draft regulations also contain significant and burdensome recordkeeping requirements. Before the proposed regulations take effect, they will be subject to a 45-day public comment period (which has not yet commenced) before FEHC can move toward a final rulemaking.