Gov. Newsom Vetoes Major California Workplace AI Law

California Gov. Newsom vetoed a recently passed state law targeting AI use in the workplace, continuing the trend of political reluctance to overregulate AI growth, even in blue states.

The law: California lawmakers passed the No Robo Bosses Act last month, which would have enacted some of the strictest controls over employer use of AI in the workplace in the country.

• Employers would have been prohibited from relying solely on AI in a wide range of employment-related decisions, and fully banned from using it in certain cases.

  • E.g., Employers would be prohibited from relying solely on AI in recruitment and hiring or when making pay decisions, and prohibited from using AI period to infer an individual’s protected characteristics or union organizing activity.

• The law also would have imposed significant notice and recordkeeping requirements on employers.

The veto: Gov. Newsom said the bill’s restrictions were “overly broad” and created burdensome requirements for employers “using even the most innocuous tools.” “Before enacting new legislation in this space, we should assess the efficacy of these regulations to address [concerns over AI’s impact on workers],” he added.

Pressing pause of AI regulation: Newsom also vetoed major California AI legislation last year, and he joins several other Governors—including fellow Democratic leaders—in pumping the brakes on AI regulatory efforts over concerns of throttling innovation and under pressure from the business community.

• Colorado Gov. Jared Polis (D) pushed his legislature to re-open the state’s recently enacted landmark AI law, the Colorado AI Act, to address several employer concerns over the law’s broad scope and impact on tech talent.

  • The extra deliberations succeeded in pushing the effective date of the law from February to June 2026, and additional rounds may result in further amendments to narrow the law’s scope.

• Virginia and Texas Govs. Youngkin (R) and Abbott (R) vetoed major AI laws passed by their respective state legislatures in the last year.

• New York Gov. Hochul (D) is currently considering whether to veto recently passed AI legislation targeting developers of large AI models. A similar law was recently enacted in California.

The bigger picture: These outcomes highlight the effectiveness of the business community’s lobbying efforts, the influence of AI developers on state lawmaking, and the unwillingness of even Democratic state governors to overregulate AI. As job displacement fears grow and become reality, expect the regulatory winds to shift more in favor of workers.