Existing law requires a contract entered into by any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, to require that a contractor certify that nothing furnished to the state pursuant to the contract has been laundered or produced by certain types of labor, including sweatshop labor and forced labor, as defined. Existing law makes any person who falsely certifies pursuant to these provisions guilty of a misdemeanor.

This bill would additionally require a contract entered into by any state agency for the procurement of artificial intelligence (AI) products that require data enrichment services in their production, other than procurement related to a public works contract, to require that a contractor certify that nothing furnished to the state pursuant to the contract has been laundered or produced by certain types of labor, including sweatshop labor and forced labor, and would make conforming changes. The bill would define “data enrichment services” to mean services, including, but not limited to, content moderation, data labeling, model training and evaluation, AI Fauxtomation, and data annotation services, obtained as part of the deployment, creation, and testing of AI models in order to secure reliable and safe data.

Existing law requires the Department of Industrial Relations to establish a contractor responsibility program, including a Sweatfree Code of Conduct, to be signed by all bidders on state contracts and subcontracts, as provided. Existing law requires contractors to ensure that their subcontractors comply in writing with the Sweatfree Code of Conduct, under penalty of perjury.

This bill would require the Department of Industrial Relations to, on or before July 1, 2027, update its contractor responsibility program to include a Sweatfree AI Code of Conduct to be signed by all bidders on state contracts and subcontracts, similar to the Sweatfree Code of Conduct, and solicit input from an advisory panel, as provided, for that purpose. The bill would require the updated contractor responsibility program and Sweatfree AI Code of Conduct to include specified information related to AI products that require data enrichment services in their production and to establish a process for independent monitoring or inspections for complaints, as defined, against contractors and subcontractors. The bill would require the updated contractor responsibility program and Sweatfree AI Code of Conduct to require contractors and subcontractors to, among other things, compensate workers, at a minimum, wages and benefits consistent with a living wage for contracts for AI products that require data enrichment in their production and ensure the workplace is free from psychological harms. The bill would redefine “sweatshop labor” to include all work or service extracted from or performed by any person contrary to the conditions outlined in the Sweatfree AI Code of Conduct.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.