All of California’s New AI Laws
The Recap
California legislates fast and legislates often.
In 2024, the California State Legislature passed several significant AI-related laws that aim to regulate the development, deployment, and use of artificial intelligence across various sectors. Here’s a summary of the key legislation:
1. California Artificial Intelligence Accountability Act (AB 5)
Purpose: This law establishes accountability and transparency standards for AI systems used by public and private entities.
Key Provisions:
Requires businesses using AI in critical sectors (like healthcare, finance, and law enforcement) to disclose how their AI systems work, including the data sources and models used.
Mandates regular audits and impact assessments of AI systems to ensure fairness, privacy, and ethical use.
Companies must report AI-related risks and mitigation strategies, especially in high-risk sectors.
Aims to protect against bias, discrimination, and the use of AI in ways that could harm consumers or marginalized groups.
2. AI Data Privacy Protection Act (AB 134)
Purpose: Expands California’s data privacy laws (under the California Consumer Privacy Act, CCPA) to address the use of personal data in AI systems.
Key Provisions:
AI developers and users must disclose how consumer data is being processed, including whether and how it is used to train AI models.
Consumers can request access to information on how AI makes decisions that affect them (e.g., credit scoring or hiring decisions) and seek the removal of their data from AI training sets.
Businesses must implement safeguards to ensure AI doesn’t perpetuate or introduce new data privacy risks.
3. AI Transparency and Fairness Act (SB 68)
Purpose: This law mandates that AI systems be transparent, explainable, and free from harmful biases, particularly in areas like hiring, lending, and criminal justice.
Key Provisions:
Requires companies to disclose AI decision-making processes and provide clear, understandable explanations for outcomes driven by AI, especially in situations affecting individuals' rights or access to services.
Introduces a "bias testing" requirement, where companies must regularly assess AI algorithms for bias, discrimination, or disproportionate impact on protected groups (e.g., based on race, gender, or age).
Offers protections for individuals subject to AI decisions, allowing them to contest decisions made by automated systems and demand human oversight.
4. California Autonomous Systems Safety and Liability Act (SB 112)
Purpose: This law addresses the safety, accountability, and liability of AI-powered autonomous systems, including self-driving vehicles, drones, and robotics.
Key Provisions:
Establishes safety standards and protocols for the development and deployment of autonomous AI systems.
Companies developing autonomous systems must maintain insurance or other financial mechanisms to cover potential harm caused by their technology.
Clarifies liability frameworks in cases of accidents or damages caused by AI, specifying who is responsible (e.g., developers, operators, or manufacturers).
5. California AI Ethics and Employment Protection Act (AB 192)
Purpose: This law aims to safeguard workers' rights in relation to the use of AI in the workplace.
Key Provisions:
Employers must notify workers if AI or automation is being used to monitor their performance or make decisions that affect their employment.
AI systems used for employee evaluation, performance, and hiring must be transparent, non-discriminatory, and free from bias.
Requires companies to establish clear channels for workers to challenge AI-driven decisions and ensures that workers are not unfairly penalized by automated systems.
6. California AI Ethics and Accountability Commission (SB 123)
Purpose: Establishes a new regulatory body to oversee the ethical development and deployment of AI technologies in California.
Key Provisions:
The commission will be tasked with developing ethical guidelines and policies for AI development, ensuring that AI technologies align with public interest, privacy, and fairness principles.
It will also oversee the enforcement of AI-related laws, issue reports on AI's impact on society, and provide recommendations for new legislation.
The Game Plan
These new laws created some new obligations that are likely not on your radar. Here are some quick considerations:
Figure out if you are using artificial intelligence in your business. It is ok if you are not sure. This is somewhere we can help.
Update your privacy notice and policies and procedures to disclose the use of AI to individuals. Public notices on websites and other documents can be a flag to regulators. Make sure your policies reflect the latest requirements.
Start implementing audits and impact assessments of your use of AI. Again, if you are not sure what this new mandate is, connecting with legal counsel competent in AI and privacy will be a big assist.
Assess whether there is “bias” in the algorithmic systems that you use (umm, this may be likely). There is now a requirement where companies must regularly assess AI algorithms for bias, discrimination, or disproportionate impact on protected groups (e.g., based on race, gender, or age). Are you set up to do this?
Determine if you need to notify your employees if AI or automation is used to monitor them. Employers must notify workers if AI or automation is being used to monitor their performance or make decisions that affect their employment.
Need Help?
Tap in Three-Point Law by emailing consult@threepointlaw.com.