Workforce Bulletin

On November 8, 2024, the California Privacy Protection Agency (the “Agency” or the “CPPA”) Board met to discuss and commence formal rulemaking on several regulatory subjects, including California Consumer Privacy Act (“CCPA”) updates (“CCPA Updates”) and Automated Decisionmaking Technology (ADMT). Shortly thereafter, on November 22, 2024, the CPPA published several rulemaking documents for public review and comment that recently ended February 19, 2025. If adopted, these proposed regulations will make California the next state to regulate AI at a broad and comprehensive scale, in line with Colorado’s SB 24-205, which contains similar sweeping consumer AI protections. Upon consideration of review and comments received, the CPPA Board will decide whether to adopt or further modify the regulations at a future Board meeting.  This post summarizes the proposed ADMT regulations, that businesses should review closely and be prepared to act to ensure future compliance.

Article 11 of the proposed ADMT regulations outlines actions intended to increase transparency and consumers’ rights related to the application of ADMT. The proposed rules define ADMT as “any technology that processes personal information and uses computation to execute a decision, replace human decisionmaking, or substantially facilitate human decisionmaking.” The regulations further define ADMT as a technology that includes software or programs, uses the output of technology as a key factor in a human’s decisionmaking (including scoring or ranking), and includes profiling. ADMT does not include technologies that do not execute a decision, replace human decisionmaking, or substantially facilitate human decisionmaking (this includes web hosting, domain registration, networking, caching, website-loading, data storage, firewalls, anti-virus, anti-malware, spam and robocall-filtering, spellchecking, calculators, databases, spreadsheets, or similar technologies). The proposed ADMT regulations will require businesses to notify consumers about their use of ADMT, along with their rationale for its implementation. Businesses also would have to provide explanations on ADMT output in addition to a process for consumers to request to opt-out from such ADMT use.

As featured in #WorkforceWednesday: This week, we’re breaking down the California Privacy Protection Agency (CPPA) Board’s new regulations impacting employers:

Last month, the CPPA Board met to discuss several new regulations that could impact employers in California and beyond. Among them were draft regulations for automated decision-making technology, an initiative that’s part of a larger trend across the country to regulate the use of technology in the workplace. Additionally, new cybersecurity audit regulations were discussed. Epstein Becker Green attorneys Nathaniel Glasser and Brian G. Cesaratto explain these new draft regulations and the potential impacts on employers.

On December 8, 2023, the California Privacy Protection Agency (“CPPA”) Board (the “Board”) held a public meeting to discuss, among other things, regulations addressing: (1) cybersecurity audits; (2) risk assessments; and (3) automated decisionmaking technology (“ADMT”).  After years in the making, the December 8 Board meeting was another step towards the final rulemaking process for these regulations.  The Board’s discussion of the draft regulations revealed their broad implications for businesses covered by the California Consumer Privacy Act ...

California businesses, including employers, that have not already complied with their statutory data privacy obligations under the California Consumer Privacy Act (CCPA) as amended by the California Privacy Rights Act (CPRA), including as to employee and job applicant personal information, should be taking all necessary steps to do so. See No More Exceptions: What to Do When the California Privacy Exemptions for Employee, Applicant and B2B Data Expire on January 1, 2023. As background, a covered business is one that “does business” in California, and either has annual gross revenues of $25 million, annually buys sells or shares personal information of 100,00 consumers or households, or derives 50 percent or more of its annual revenues from selling or sharing consumers’ personal information. It also applies, in certain circumstances, to entities that control or are controlled by a covered business or joint ventures. Covered businesses may be exempt from obligations under certain enumerated entity-level or information-level carve-outs.