Software can already track when an employee arrives at work, how many orders the employee completes, how quickly the employee responds to customers, and whether the employee meets productivity targets.
Increasingly, that same technology can also recommend what management should do about it.
But can a California business allow a computer system to decide that an employee should be disciplined or fired?
California lawmakers are now attempting to draw a clearer line between using technology to help manage employees and allowing technology to become the manager.
On August 31, 2026, the California Legislature passed Senate Bill 947, known as the No Robo Bosses Act of 2026. The legislation would restrict how employers use automated decision systems when disciplining or terminating workers.
As of the date of this article, SB 947 has passed the Legislature and is awaiting action by Governor Gavin Newsom.
What Is a “Robo Boss”?
The term may sound futuristic, but the technology is already familiar to many businesses.
Employers can use software to track attendance, measure productivity, monitor sales, evaluate customer feedback, assign work, and identify employees who fail to meet particular performance standards.
An automated system can take those measurements and produce a score, warning, recommendation, or other result.
The concern arises when the recommendation begins to replace the manager.
A system that tells a supervisor that an employee has been late eight times is one thing. A system that automatically determines that the employee should be fired is something different. SB 947 is directed at that distinction.
Can an Employer Let AI Decide to Fire Someone?
If SB 947 becomes law, California employers would be prohibited from relying solely on an automated decision system to terminate or discipline a worker. When an automated system is used to assist with those decisions, the legislation would require human oversight and verification.
For business owners, this means that simply putting a manager’s name on an automated decision may not be enough.
If software recommends termination, the person responsible for the decision should actually review the relevant facts and determine whether the recommended action is appropriate.
The practical question is who made the decision. If the answer is effectively “the system did,” that is exactly the type of situation California lawmakers are attempting to address.
What About Attendance and Productivity Software?
Automated workplace systems can be useful. A restaurant may track attendance and scheduling. A warehouse may measure productivity. A sales organization may track calls, leads, and completed transactions. A professional services company may monitor deadlines or work output.
Nothing about SB 947 means that businesses must stop collecting legitimate performance information. The more significant issue is what happens after the information is collected.
If software identifies an employee as a poor performer, management should understand why. Before discipline or termination, someone should review whether the underlying information is accurate and whether there are circumstances that the automated system does not understand.
A productivity score may not know that an employee was on approved leave. An attendance system may incorrectly record a schedule change. Customer ratings may reflect factors outside an employee’s control.
Human review can matter because employment decisions rarely exist entirely within a spreadsheet.
Employees Would Have to Be Told When Automated Systems Are Used
SB 947 would also impose notice requirements. Under the legislation passed by the Legislature, employers would be required to inform workers when an automated decision system has been used in connection with termination or disciplinary decisions.
This could become important in later disputes.
Once an employee knows that an automated system played a role in the decision, questions may arise about what information the system considered, whether that information was accurate, and who reviewed the result.
Businesses using these systems should therefore think about documentation before a dispute occurs, not after one begins.
AI Does Not Eliminate Existing Employment Law
SB 947 is not the only reason California businesses should be careful.
California regulations concerning automated decision systems in employment have already taken effect. Those regulations make clear that existing employment discrimination protections can apply when AI, algorithms, or automated systems affect employment decisions.
For example, an apparently neutral automated system could create a legal problem if its criteria disproportionately disadvantage employees based on a characteristic protected by California law. The fact that the decision originated from software does not necessarily insulate the employer.
Businesses therefore need to consider both the accuracy of an automated recommendation and whether the criteria used by the system comply with existing employment laws.
The Software Vendor May Not Be the One Defending the Lawsuit
Many businesses purchase workplace management software from third-party vendors. If something goes wrong, the employer may understandably believe that the software company should be responsible. That may not resolve the employer’s problem.
The employment relationship remains between the business and the employee. If an employee challenges a termination, the employer may still need to explain why the employee was terminated and what information supported the decision.
This makes it important for businesses to understand the systems they purchase. If a vendor’s software recommends discipline or termination, the employer should know what information produced the recommendation and whether the underlying records can be retrieved later.
Think About the Evidence Before There Is a Lawsuit
Automated management systems create records. Those records can help an employer. They can also become evidence against the employer.
Suppose an employee is terminated after receiving a low automated performance score. The employee later claims the termination was discriminatory or retaliatory.
During litigation, questions may include what data went into the score, whether the data was accurate, whether other employees were evaluated using the same criteria, what recommendation the system produced, and whether a manager independently reviewed the result.
A business that can show a documented and legitimate human decision-making process may be in a very different position from a business whose records suggest that an algorithm made the decision automatically.
What Should California Business Owners Do Now?
SB 947 has not yet become law, so businesses should follow its status before treating its proposed requirements as final. But employers do not need to wait for the legislation to decide whether their current practices make sense.
Businesses that use employee monitoring, productivity scoring, automated scheduling, performance management, or other algorithmic tools should understand whether those systems merely provide information or actually recommend employment actions.
When technology recommends discipline or termination, management should consider independently reviewing the underlying facts before acting. Employers should also preserve appropriate records showing why important employment decisions were made.
This is useful not only because California’s rules concerning AI are developing, but because the ability to explain a termination has always mattered when an employment decision is later challenged.
AI Can Help Manage Employees, But It Should Not Become the Manager
The workplace will continue to become more automated. For businesses, that can mean better information, lower administrative costs, and more consistent management. But efficiency and responsibility are different things.
California’s proposed No Robo Bosses Act reflects a simple idea. A business can use technology to identify problems and help management make decisions, but when someone’s employment is at stake, there should still be a person who understands the facts and is responsible for the decision.
For California business owners using increasingly sophisticated workplace technology, that distinction may soon become a legal requirement.
For businesses using AI earlier in the employment process, see our discussion of AI-assisted hiring in California.
Related practice areas: Executive-Related Disputes · Civil Litigation