California Moves to Regulate AI Workplace Surveilance: What Employers and Employees Need to Know in 2025

As artificial intelligence (AI) and data-driven technologies become increasingly common in the workplace, California is leading the charge in regulating how these tools are used—particularly when it comes to monitoring employees. In 2025, two major bills, Senate Bill 238 and Assembly Bill 1221, are working their way through the legislature with the backing of the California Labor Federation, aiming to enhance transparency and protect worker privacy.

Here’s what California employers need to know about these proposed laws.

Senate Bill 238 - Annual Reporting and Transparency Requirements

SB 238 would require employers to submit detailed annual disclosures to the Department of Industrial Relations (DIR) if they use surveillance technologies in the workplace. This includes tools that track employee behavior, communications, movements, and performance metrics.

Key features of SB 238:

• Employers must report:

  • The types and locations of surveillance technologies used.

  • Data collected from employees and customers.

  • Whether employees can opt out of data collection.

  • Who has access to the data.

  • Whether the employer has notified employees about the use of these tools.

• The DIR must publish this data on a publicly accessible website within 30 days of submission.

Impact: SB 238 emphasizes accountability and gives workers—and the public—a clearer view of how modern monitoring tools are being used in California workplaces.

Assembly Bill 1221 - Limits on Intrusive Monitoring

AB 1221, introduced by Assemblymember Isaac Bryan, goes a step further by restricting the use of highly intrusive surveillance technologies, especially those relying on biometrics and AI-driven behavioral analysis.

Highlights of AB 1221:

• Employers must disclose to employees:

  • The purpose of surveillance.

  • What data is being collected and how it will be used.

• Prohibits monitoring of:

  • Eye movements

  • Facial expressions

  • Body temperature

  • Pulse rates, and similar physiological metrics.

• Employees must be given access to their own data collected through surveillance.

• Restricts data sharing and retention by vendors and third-party service providers.

Impact: This bill targets newer AI-based tools that go beyond traditional monitoring by analyzing emotional states, attention spans, or health data—techniques that critics say cross into invasive territory.

Why This Matters

California has long been a national leader in worker rights, and these bills reflect growing concern about digital privacy in the age of AI. While some employer groups, including the Society for Human Resource Management (SHRM), have pushed back on the scope and complexity of the proposed rules, the legislation could significantly reshape compliance obligations for businesses of all sizes.

If passed, these bills will:

• Create new recordkeeping and disclosure burdens.

• Limit the use of AI tools that analyze employee behavior or health.

• Expand employees’ rights to transparency and control over how they are monitored.

Shiraz Simonian is a managing partner at Simonian & Simonian, PLC specializing in employment law and personal injury. He can be contacted at 818-405-0080 ext. 101; shiraz@simonianlawfirm.com.