Coverage

You are covered by FEHA if you:

• Employ, or have employed, five or more individuals on a “regular basis” or “for any part of the day on which the unlawful conduct allegedly occurred.”3
• Are a public sector employer, regardless of the number of employees.
• Regularly employ one or more people or regularly receive the services of one or more independent contractors (for harassment cases only).

FEHA regulations explain that “‘regular basis’ refers to the nature of a business that is recurring, rather than constant.” To illustrate, the regulation provides an example of an industry with a three-month season, stating that if an employer employs five or more individuals during that season, then the employer “regularly employs” the requisite number of employees to be covered by the act. In other words, the FEHA may cover seasonal employers even if they do not have five employees working throughout the year, so long as five or more employees are on the payroll during the season.

Additionally, the regulations state that the method of achieving the five-employee threshold also apply for establishing coverage under FEHA’s harassment prevention training requirements.

Religious nonprofit organizations are generally excluded from coverage under FEHA. However, FEHA covers you if you are incorporated as a nonprofit religious association or corporation and provide health care to people who are not adherents of the religion.

For purposes of determining whether you have five or more individuals, the individuals need not work at a location in California — employees located outside of California are counted. However, employees located outside of California are not covered by FEHA’s protections if the discriminatory conduct did not occur in California and was not approved by decision makers or participants who are located in California.4

• However, courts may extend the protections of California laws when unlawful decisions originating in California are taken against out-of-state employees. This means employers could face liability for FEHA violations against remote employees who’ve never set foot in the state.5

Also, when counting the number of individuals to determine if you are covered by FEHA, you must count full- and part-time employees and employees on paid or unpaid leave, such as a CFRA leave, a leave of absence or a suspension.6

Employee does not include any individual employed by his or her parents, spouse or child.

Individuals employed under a special license in a nonprofit sheltered workshop, day program or rehabilitation facility can bring an action under the FEHA for any form of harassment or discrimination prohibited by the FEHA. There are, however, certain situations where the law authorizes specific activities in order to serve employees with disabilities.7

Prohibitions

You cannot, among other things:

• Refuse to hire, segregate or take adverse actions with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or terms, conditions, or privileges of employment on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex (including pregnancy, childbirth, breastfeeding or related medical conditions), gender identity, gender expression or transgender, age, sexual orientation, reproductive health decisionmaking, or veteran or military status. You also cannot take any type of adverse action because you perceive an employee has one of these protected characteristics.
• Engage in, or permit your employees or agents to engage in, harassment of any person of any protected class.
• Retaliate against an employee, applicant or independent contractor for opposing sexual harassment or other unlawful discrimination or for filing a complaint, testifying, assisting or participating in an investigation, proceeding or hearing under FEHA.
• Base any adverse employment decision in whole or in part on a person’s protected class status.
• Refuse to honor an otherwise eligible employee’s request for pregnancy disability leave or for leave under the California Family Rights Act (CFRA).
• Fail to reasonably accommodate an employee’s religion or disability, absent an undue hardship.
• Discriminate on the basis of pregnancy, childbirth, breastfeeding or related medical condition, or fail to grant up to four months of pregnancy leave when an employee is unable to work due to pregnancy disability leave.8 For more information, see Pregnancy Disability Leave.
• Discriminate against an individual who is transitioning, has transitioned or is perceived to be transitioning.

FEHA also:

• Prohibits employers from discriminating against workers in unpaid internships, or other limited duration programs that provide unpaid work experience;
• Protects both unpaid interns and volunteers from harassment; and
• Provides religious accommodation protections to individuals in apprenticeship training programs, unpaid internships, or any other program that provides unpaid experience in the workplace or industry.

• Effective January 1, 2026, new FEHA provisions state that an employee's assessment, testing, admission or acknowledgment of their own personal bias — made in good faith or as part of a bias mitigation training — does not constitute unlawful discrimination. The new provisions are intended to address concerns that bias-related training information could be misused in discrimination claims against employees or employer.9

Automated Decision Systems and Artificial Intelligence

• The California Civil Rights Council, which creates regulations implementing California's civil rights laws, revised the FEHA regulations to address the use of automated decision systems (ADS), including artificial intelligence (AI), in employment practices, clarifying that it's unlawful for an employer or other covered entity to use ADS that discriminates against an applicant or employee on the basis of any FEHA protected characteristic.10 In other words, it is unlawful to use an ADS if it results in a person or group of people being negatively impacted in hiring and employment decisions based upon a protected characteristic. These regulations took effect on October 1, 2025.

Defining ADS

The CRC’s new regulations define ADS as well as several other terms like “algorithm,” “artificial intelligence” and “machine learning.” ADS is broadly defined as a “computational process that makes a decision or facilitates human decision-making regarding an employment benefit.” Amongst other data processing techniques, these systems may be derived from or use the following:11

• AI: A machine-based system that infers, from the input it receives, how to generate outputs, including predictions, content, recommendations or decisions.
• Machine learning: The ability for a computer to use and learn from its own analysis of data or experience and apply this learning automatically in future calculations or tasks.
• Algorithms: A set of rules or instructions a computer follows to perform calculations or other problem-solving operations.

Notably, the regulations provide a non-exhaustive list of tasks that an ADS may perform in the employment context, such as:12

• Using computer-based assessments or tests such as questions, puzzles, games or other challenges to:
• Make predictive assessments about an applicant or employee;
• Measure an applicant's or employee's skills, dexterity, reaction time and/or other abilities and characteristics;
• Measure an applicant's or employee's personality traits, aptitude, attitude and/or cultural fit; and/or
• Screen, evaluate, categorize and/or recommend applicants or employees.
• Directing job advertisements or other recruiting materials to targeted groups.
• Screening resumes for specific terms and patterns.
• Analyzing facial expression, word choice and/or voice in online interviews.
• Analyzing employee or applicant data from third parties.

Employers should carefully review any technologies they use to accomplish the above-listed tasks to determine if they fall within the regulations' definition of an ADS.

Potential Liability When Using ADS

The CRC’s revised regulations primarily confirmed that existing anti-discrimination laws apply to using an ADS in employment decisions. The regulations expressly state “[i]t is unlawful for an employer or other covered entity to use an automated-decision system or selection criteria (including a qualification standard, employment test or proxy (characteristic closely correlated with a protected category)) that discriminates against an applicant or employee or a class of applicants or employees on a basis protected by the [FEHA].”13

The CRC added ADS language to numerous provisions to clarify that any specifically prohibited practice includes when such practice is accomplished using an ADS. This may help employers further identify areas in which they should exercise caution when using an ADS.

For example, regarding employment applications, the revised regulations specify that using an ADS that measures an applicant's skill, dexterity, reaction time or other abilities/characteristics may discriminate against individuals based on protected characteristics. To avoid that, employers may need to provide reasonable accommodations based on an applicant's disability or religious beliefs. Similarly, an ADS that analyzes an applicant's tone of voice, facial expressions, or other characteristics or behavior during an interview may discriminate against individuals based on race, national origin, gender, disability or other protected characteristics, for which employers may need to provide reasonable accommodations.

The CRC added similar language to regulations related to:

• Pre-employment inquiries and recruiting practices;
• Consideration of criminal history;
• National origin and ancestry discrimination;
• Sex discrimination;
• Pregnancy, childbirth and related medical conditions;
• Religious creed;
• Disability; and
• Age discrimination.

As with any FEHA-related claim, such as race or sex discrimination, an employer may defend against it by providing evidence that the decision or employment practice was based on a legitimate, nondiscriminatory reason. Specific to an ADS, the regulations provide that relevant evidence to any FEHA-related claim or defense will include evidence - or lack thereof - of “anti-biasing testing or similar proactive efforts to avoid unlawful discrimination, including the quality, efficacy, recency and scope of the effort, the results of such testing or other effort and the response to the results.” The regulations don't require employers to engage in anti-bias testing, but it's important to remember that such testing is relevant to discrimination claims.

Additionally, the regulations state that potential liability may include any agent of the employer, which includes “any person acting on behalf of an employer, directly or indirectly, to exercise a function traditionally exercised by the employer, which may include applicant recruitment, applicant screening, hiring, promotion or decisions regarding pay, benefits, or leave, including when such activities and decisions are conducted in whole or in part through the use of an automated decision system.”14

The regulations require employers to keep ADS data along with other FEHA related records for four years. ADS data includes:15

• Any data used in or resulting from the application of an ADS, such as data provided by or about individual applicants or employees, or data reflecting employment decisions or outcomes; and/or
• Any data used to develop or customize an ADS for use by a particular employer or other covered entity.

1. Govt. Code sec. 12900 et. seq.