What You Need to Know
Overview
California's CCPA regulations on Automated Decision-Making Technology (ADMT) are among the most detailed in the nation. They require businesses to provide pre-use notices, allow opt-outs, and conduct risk assessments for AI used in significant decisions.
What is ADMT?
Automated Decision-Making Technology is defined as "any technology that processes personal information and uses computation to replace or substantially replace human decision-making." This includes:
- AI hiring tools that screen or rank candidates
- Algorithms that determine interview eligibility
- Systems that assess job performance
- Tools that influence compensation decisions
- Any AI that "substantially replaces" human judgment
Phased Implementation
January 1, 2026
- Cybersecurity audit requirements
- Initial risk assessment requirements
- Pre-use notice requirements begin
January 1, 2027
- Full ADMT provisions in effect
- Opt-out requirements fully enforced
- Complete risk assessment obligations
Key Requirements
- Pre-Use Notice: Explain the purpose of ADMT, describe opt-out rights, and explain how the technology works before using it
- Consumer Opt-Out: Allow consumers to opt out of ADMT for significant decisions (limited exceptions for safety, security, and fraud prevention)
- Human Oversight: Human reviewers must be able to interpret ADMT outputs and have authority to change or correct final decisions
- Risk Assessments: Required when using ADMT in employment contexts or for profiling
When Risk Assessments Are Required
Penalties for Non-Compliance
$2,500 - $7,500 Per Violation
- $2,500 per unintentional violation
- $7,500 per intentional violation
- Each affected consumer counts as a separate violation
- Enforced by California Privacy Protection Agency (CPPA) and Attorney General
Example Exposure
A company that fails to provide proper ADMT notices to 1,000 job applicants could face up to $7.5 million in penalties ($7,500 × 1,000 applicants) for intentional violations.
How EmployArmor Helps
Pre-Use Notice Generator
Create California-compliant ADMT notices explaining your AI tools and opt-out rights.
Risk Assessment Templates
Complete required risk assessments with guided workflows and documentation.
Opt-Out Management
Track and manage consumer opt-out requests for ADMT processing.
Human Oversight Documentation
Document your human review processes to demonstrate compliance.
Get Compliant Today
No credit card required to start.
Starter
Small teams, single state
- ✓1 state compliance
- ✓Up to 50 employees
- ✓Compliance documents
- ✓Risk assessment
- ✓Email support
Growth
Growing companies, multi-state
- ✓Up to 6 states
- ✓Up to 500 employees
- ✓All compliance documents
- ✓Training modules
- ✓Priority support
- ✓Quarterly compliance reviews
Scale
Large organizations, nationwide
- ✓Unlimited states
- ✓Unlimited employees
- ✓All compliance documents
- ✓All training modules
- ✓Dedicated account manager
- ✓Monthly compliance reviews
- ✓Custom integrations
Enterprise
Complex compliance needs
- ✓Everything in Scale
- ✓Multi-entity support
- ✓Custom training content
- ✓API access
- ✓SSO / SAML
- ✓SLA guarantee
California Sets the Standard
California's regulations often become the de facto national standard. Get compliant now.
Disclaimer: This content is for informational purposes only and does not constitute legal advice. Employment laws vary by jurisdiction and change frequently. Consult a qualified employment attorney for guidance specific to your situation. EmployArmor provides compliance tools and resources but is not a law firm.