California Workplace AI Notice and Disclosure Bill Would Impose Hefty Penalties

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Quick Hits

• California Assembly Bill (AB) 1898 would impose significant new notice and transparency obligations on California employers using AI-powered tools for employment-related decisions.
• AB 1898 would require employers to provide advance written notice, obtain signed acknowledgments, and maintain an annual inventory of AI tools, with penalties for noncompliance.
• Employers may want to begin preparations now by conducting AI tool audits, assessing coverage, building notice processes, planning for acknowledgment requirements, preparing annual disclosure lists, evaluating vendor agreements, and training managers and HR.

The Problem AB 1898 Is Designed to Solve

The backdrop for this legislation is striking. AI adoption has surged—from 20 percent of firms in 2017 to 72 percent by 2024—yet workers are largely in the dark. A 2025 study found that only 22 percent of workers were aware when they were being monitored, and up to 44 percent did not know their employers were using biometric surveillance. Researchers have also found that electronic monitoring can create a climate of fear that undermines psychological well-being, leading to stress, burnout, and injury—and such tools disproportionately affect marginalized communities in low-wage industries.

What AB 1898 Would Require

At its heart, AB 1898 would add a new Part 5.9—titled “Artificial Intelligence Transparency at Work”—to the California Labor Code. The bill’s key obligations fall into two broad categories: advance notice and ongoing disclosure.

Advance Written Notice. Before deploying any “workplace AI tool,” employers would be required to provide written notice at least ninety days in advance to any worker who would likely be directly or indirectly affected, as well as to that worker’s exclusive bargaining representative. For employers already using covered AI tools as of January 1, 2027, notice would have to be provided no later than February 1, 2027. New hires would have to receive notice upon hire.

The bill defines “workplace AI tool” broadly to encompass both automated decision systems—computational processes using machine learning, statistical modeling, or AI that produce scores, classifications, or recommendations materially impacting workers—and workplace surveillance tools, which include video and audio surveillance, geolocation tracking, biometric monitoring, and continuous time-tracking technologies.

Notice Requirements. The written notice would have to be written in plain language, be separate from other notices, be provided in the language used for routine workplace communications, and be delivered via an accessible method such as email. The content requirements are extensive. Employers would have to disclose the purpose and justification for the tool; the employment decisions it may affect (such as hiring, promotion, or termination); what worker data is collected and how it is stored; whether data will be shared with third parties; the vendor and model name; any job displacement timelines; and a summary of any risk assessments conducted.

Notably, the bill would also require employers to disclose any quotas measured by AI tools, including the number of tasks to be performed and any adverse employment consequences for failing to meet those quotas.

Signed Acknowledgment Required. Employers would be required to obtain a signed acknowledgment from each affected worker confirming receipt and understanding of the notice. Critically, the employer would not be permitted to deploy the workplace AI tool until all affected workers have returned their signed notices—a proposed requirement that has drawn significant criticism from employer groups regarding its administrative feasibility for larger organizations.

Annual AI Tool Inventory. Employers would be required to maintain and provide workers with an updated list of all workplace AI tools currently in use on or before February 1, 2028, and annually thereafter, including a description of any job displacement impacts.

Enforcement and Penalties

The potential stakes for noncompliance are real. The labor commissioner would be authorized to investigate violations and issue citations. AB 1898 would also permit workers, or their exclusive representatives, to bring civil actions and seek punitive damages, injunctive relief, and attorneys’ fees. Employers that violate the law could face penalties of up to $500 per employee for each violation—an amount that can add up quickly for mid-size or large organizations.

Practical Steps for Employers to Prepare

While AB 1898 has not yet been signed into law, employers may want to consider beginning preparations now. Key areas to evaluate include:

• Conducting an AI tool audit. Employers may want to identify every automated system, monitoring platform, and surveillance technology currently in use or under evaluation—this inventory will form the foundation of any compliance program.
• Assessing coverage. Employers may want to determine which tools fall within the bill’s broad definitions of “automated decision systems” and “workplace surveillance tools,” erring on the side of inclusion when in doubt.
• Building a notice process. Employers may want to work with HR and IT to develop compliant written notice templates for each covered tool, including translated versions for multilingual workforces.
• Planning for the signed acknowledgment requirement. Employers may want to develop a reliable system for distributing notices and tracking acknowledgment returns before any new AI tool is deployed.
• Preparing the annual disclosure list. Employers may want to begin cataloging AI tools now to be ready for the annual inventory requirement, which would begin February 1, 2028.
• Evaluating vendor agreements. Employers may want to review contracts with AI tool vendors to confirm they can obtain the information the notice requirements demand.
• Training managers and HR. Employers may want to educate frontline supervisors and HR professionals on which tools are covered, what disclosures are required, and how to respond to worker questions.

Looking Ahead

AB 1898 is part of a broader wave of California legislation targeting workplace AI, alongside related bills such as AB 1883 (restrictions on workplace surveillance tools), Senate Bill (SB) 947 (restrictions on employment-related automated decision systems), and SB 951 (to establish a “Technological Displacement Act Fund”). This legislative momentum signals that transparency and accountability in AI are becoming a defining priority for California policymakers—and employers that prepare early will be better positioned to build trust with their workforce and avoid costly enforcement actions.

Ogletree Deakins’ California offices will continue to monitor developments and will post updates on the California, Cybersecurity and Privacy, and Technology blogs as additional information becomes available.

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