What does SB 947 say about AI in banking?

What are the key points of SB 947?

• First US statute to directly restrict employers' use of automated decision systems for discipline and termination
• An employer may not rely solely on an ADS to make a disciplinary or termination decision, and may not use an ADS to infer protected status or retaliate against an employee for exercising legal rights
• Where an employer primarily relies on an ADS output for such a decision, a human must corroborate it using the underlying data or other supporting information (supervisory/managerial evaluations, personnel files, work product, peer reviews, witness interviews); if it cannot be corroborated, or the reviewer finds the output inaccurate or misleading, the ADS output cannot be used
• Affected employees may request, and the employer must provide, a meaningful description of the employee's own data used by the ADS, and a written postuse notice confirming human corroboration and the employee's rights
• Anti-retaliation protection for employees who exercise rights, file complaints, or cooperate with an investigation under the Act
• Enforced by the Labor Commissioner or a public prosecutor; civil penalty of $500 per violation; a business already subject to CPPA ADMT regulations must still comply with those regulations in addition to this Act
• Exempts automated decision systems required for national-airspace aircraft development or national-security/military/defense purposes, and parties under a qualifying collective bargaining agreement that expressly waives the Act's provisions
• Operative July 1, 2027 — six months after the governor's October 2025 veto of an earlier, broader version of this bill

What did SB 947 change for banks?

California adds an employment-specific AI statute alongside its existing Civil Rights Council ADS regulations and CPPA ADMT rules, narrowing in on the single highest-stakes employment use case — AI-assisted discipline and termination — and requiring documented human corroboration rather than leaving it to risk-based ADMT notice-and-opt-out obligations alone. For bank HR functions using AI-assisted performance or conduct tools, this adds a standalone corroboration-and-notice duty that applies regardless of whether the CPPA's significant-decision ADMT rules are also triggered.