BLOG OVERVIEW: California closed its 2026 legislative session with a wave of AI measures pointing toward documented, independently verifiable AI governance in the workplace. Governor Newsom signed SB 813 and AB 1405 on September 9, 2026, directing the Government Operations Agency to build an AI audit infrastructure: a framework for designating Independent Verification Organizations by January 1, 2028, and a registry of AI auditors conducting “covered AI audits” by January 1, 2029. Neither law requires employers to obtain an AI audit. Three more workplace AI bills covering automated discipline, technology-driven layoffs, and employee surveillance await the Governor’s decision.
California closed its 2026 legislative session with several significant developments concerning artificial intelligence (AI) in the workplace. These developments build on the state’s existing regulation of AI-assisted decision-making, including the Fair Employment and Housing Act (FEHA) Amendments and the California Privacy Protection Agency’s (CPPA) “Automated Decisionmaking Technology” (ADMT) regulations1.
This blog examines the latest developments from California’s 2026 legislative session, including two bills signed into law that establish new infrastructure for independent AI assessment, as well as proposed requirements related to automated workplace decision-making, AI-driven workforce displacement, and workplace surveillance. While several of these measures are still awaiting action by Governor Newsom as of the date of publishing, together they provide important insight into the direction of AI regulation in California and what employers should be watching as they develop their AI governance strategies.
California’s 2025–2026 legislative session ended August 31, 2026, with two major AI-related measures, SB 813 and AB 1405, passing both chambers. Governor Gavin Newsom signed both into law on September 9, 2026. The bills were specifically designed to work in concert to establish infrastructure for independent AI assessment. Although neither bill creates a general requirement for employers to conduct AI audits, these bills begin to establish standards for who can conduct independent AI assessments and what a credible independent assessment should look like.
Senate Bill 813 (SB 813) directs the Government Operations Agency (GovOps) to establish a framework for designating Independent Verification Organizations (IVOs) by January 1, 2028. Under the law, IVOs are AI auditors that demonstrate expertise in assessing the risks posed by AI systems. To qualify for IVO designation, an auditor must demonstrate competence and technical expertise, identify its proposed standards and methodologies, and meet independence requirements. Stakeholder working groups will help develop the specific criteria for designation. The law also provides for a process to suspend or terminate an IVO’s designation, and IVOs will be required to submit annual reports describing their standards, methodologies, any changes that could affect independence, or any other relevant updates. Notably, SB 813 does not require employers to hire an IVO or undergo an AI audit. Instead, the law lays the groundwork for greater standardization of independent AI risk assessments and the organizations that conduct them.
Assembly Bill 1405 (AB 1405) is designed to work alongside SB 813. While SB 813 establishes a framework for IVO designation, AB 1405 establishes a registry and requirements for AI auditors. Specifically, it requires GovOps to establish an AI Auditor Registry by January 1, 2029, at which point a person would be prohibited from offering, selling, or conducting a “covered AI audit” (i.e., an AI audit that is necessary for compliance with state law) unless they are registered with the state. Registered auditors will be subject to requirements concerning industry standards, independence, objectivity, competence, and reporting, including requirements to document audit scope and results, identify deficiencies and potential remediation measures, and disclose limitations. Under the law, the agency will maintain a public database of AI auditors and establish annual registration fees and a mechanism for individuals to report misconduct by registered auditors. Like SB 813, AB 1405 does not impose an audit requirement on employers. Instead, it requires auditors conducting covered AI audits in California to be registered with the state.
California’s 2025–2026 legislative activity extended beyond AI auditing, with several other measures addressing the use of AI in workplace decision-making, workforce displacement, and employee surveillance.
| Bill | Status | Effect |
|---|---|---|
| Senate Bill 947 No Robo Bosses Act |
Passed both chambers August 31, 2026. Awaiting the Governor’s signature. | Would restrict relying on an automated decision system (ADS) as the primary basis for employee discipline or termination without human review, and would require notice to the affected employee that an ADS was used and that a human reviewed the decision. |
| Senate Bill 951 California Worker Technological Displacement Act |
Passed both chambers August 31, 2026. Awaiting the Governor’s signature. | Would expand Cal/WARN notice requirements to cover mass layoffs, relocations, and terminations caused in whole or in substantial part by AI or other automated technology. Employers would identify the affected positions and job functions, describe the technology responsible, and clearly label the notice as a technology displacement. The Employment Development Department would publish summaries of reported displacements and provide quarterly statewide reporting. |
| Assembly Bill 1883 Workplace Surveillance Tools |
Passed both chambers August 30, 2026. Awaiting the Governor’s signature. | Would ban employers from using AI workplace surveillance tools that collect neural data (information generated by measuring central or peripheral nervous system activity) or recognize an individual’s emotional state. Workplace surveillance tools are not banned generally, and their use is permitted to ensure safety. |
| Assembly Bill 1018 Automated Decisions Safety Act |
Failed to pass before the end of the 2026 legislative session. | Would have imposed broader requirements on ADS use in consequential decisions, including hiring, compensation, scheduling, promotion, and performance evaluation. ADS “deployers” would have provided notice when a covered ADS was used, disclosed the characteristics and data sources assessed following an adverse outcome, explained the role the ADS played and whether human judgment was involved, and allowed individuals to correct inaccurate information and appeal an adverse decision. Its approach to transparency, accountability, and individual rights could resurface in a 2027 reintroduction. |
While SB 813 and AB 1405 do not require California employers to obtain an independent audit of AI-enabled employment selection tools, the bills establish infrastructure for independent AI assessment in the state, including standards for verification organizations and requirements governing AI auditors.
Taken together with California’s other recent AI developments, these measures point toward increasing expectations that employers understand and document how AI is used in workplace decisions. Employers looking to prepare for evolving AI compliance requirements can review our blog on preparing for AI compliance, which provides practical considerations for developing a scalable AI compliance strategy, or access our State Legislation Tracker.
To stay up to date on continued developments in AI regulation, visit DCI’s Consulting Blog.
1 The FEHA Amendments, which were effective as of October 1, 2025, clarify that California’s employment discrimination protections apply to the use of automated decision systems in employment decisions, while the CPPA’s ADMT regulations, which were effective as of January 1, 2026, establish additional requirements (e.g., notice, opt-out, information access, and risk assessment requirements in certain circumstances) for covered businesses using ADMT to make certain employment decisions.