On December 11th, President Trump signed an executive order directing federal agencies to review and potentially challenge certain state laws regulating artificial intelligence, including those that affect workplace decision making. While the order signals increased federal scrutiny of state AI regulation, it does not eliminate or suspend any existing laws. In California, AI-related employment requirements—such as disclosure obligations and protections against discriminatory decision-making—remain fully in effect unless and until a court or Congress takes action.
For California employers, the executive order creates uncertainty but does not change current compliance obligations. Employers should continue to comply with all applicable state and local rules governing the use of AI in hiring, promotion, monitoring, scheduling, and other employment decisions. Even if specific state AI laws are later challenged or limited, employers would still face potential liability under federal and California anti-discrimination laws, including claims based on disparate impact, failure to accommodate, or biased automated decision-making.
In light of this evolving landscape, California employers should take proactive steps to manage risk. This includes identifying where AI tools are used in employment practices, strengthening internal governance and documentation, reviewing vendor agreements for flexibility, and closely monitoring upcoming federal actions tied to the executive order. Staying compliant with current law while preparing for potential regulatory shifts will help employers remain protected as AI regulation continues to develop.
For guidance on how these developments may affect your business, please contact info@mnklawyers.com.
