AI’s Impact on Workplace Remains Focus for State Legislators

As in every part of society it touches, artificial intelligence is changing hiring practices—and state legislators are concerned about the implications.

Consider two aspects of AI in labor that lawmakers have wrestled with this year: discrimination and transparency in the workforce, and job loss preparation and mitigation.

Several States Consider AI-Related Job Displacement Disclosure Bills in 2026

At least seven states have considered bills this year requiring employers to disclose artificial intelligence- or automation-related job displacement, layoffs, or hiring disruption, according to an article by Littler Mendelson PC and LexisNexis® State Net® data. Connecticut enacted such a measure (SB 5).

State and Local AI Workplace Discrimination and Disclosure Laws

Several states and New York City (Local Law 144 of 2021, codified in NYC Administrative Code 20-871) have laws that address AI workplace discrimination and/or require employers to provide notice when they use AI for employment decisions. States with such laws include California (2 Cal. Code Regs. §§ 11009, 11016, 11017, 11070), Colorado (Colo. Rev. Stat. §§ 6-1-1701 to 6-1-1709), Illinois (775 ILCS 5/2-101(N)–(O); 775 ILCS 5/2-102(L)), Texas (Tex. Bus. & Com. Code §§ 551.001 through 553.051), and Connecticut (2026 Ct. SB 5). See Artificial Intelligence State Law Survey; AI and DEI & Employment Discrimination: Key Legal Issues and Potential Pitfalls & Benefits.

New Connecticut AI in Workplace Law

Connecticut has the most recently enacted AI in the workplace law, signed by Gov. Ned Lamont (D) on May 27, 2026 (SB 5). The law regulates employers’ use of automated employment-related decision technology in decisions involving hiring, promotion, discipline, discharge, renewal, training/apprenticeship selection, tenure, and other employment terms. Beginning October 1, 2027, employers using such tools as a “substantial factor” must give applicants or employees advance notice identifying the tool, its purpose, trade name, data categories and sources, how the data will be assessed, and employer contact information.

The law also states that, effective October 1, 2026, using AI is not a defense to discrimination claims, though courts or the Connecticut Commission on Human Rights and Opportunities (CHRO) may consider anti-bias testing and mitigation efforts. In addition, effective October 1, 2026, Connecticut employers issuing WARN notices for plant closures or mass layoffs must disclose whether the layoffs relate to AI or other technological changes. (For more information on this law, see Conn. Law Tackling AI In Employment Prizes Transparency.)

Potential AI in Employment Laws in New York State

Meanwhile, in New York, Sen. Michelle Hinchey (D) and Assemblymember Harry Bronson (D), respectively, introduced SB 8706 and AB 9581, aimed at requiring businesses with 50 or more employees to report how many workers were hired, fired, replaced, or had their work hours increased or decreased due in whole or in part to AI.

After each chamber passed its respective bill, the Senate substituted AB 9581 for SB 8706, approved the substituted bill, and returned it to the Assembly for enrollment on June 4, one day before the New York Legislature adjourned for the session. The state’s official bill status page has not yet recorded any further action on the measure.

Elias Kahn, senior product manager for labor and employment, tax, employee benefits and executive compensation for the Practical Guidance team at LexisNexis®, said these bills address some of the biggest concerns policymakers have about the use of AI in employment. (For more AI legislation tracking, see Artificial Intelligence Legislation Tracker (2026).)

New Stanford Study Bolsters Concerns that AI May Discriminate

Kahn said AI is affecting employment as much as the internet did decades ago, dramatically upending the status quo of work duties and employer expectations.

For lawmakers, Kahn said, the potential for AI to discriminate against job applicants and employees has emerged as one of the first major issues they’ve sought to tackle. Referencing the comprehensive workplace AI discrimination legislation passed in states like California, Connecticut and Illinois, he said: “I don’t think we’ve seen the end of it.”

Kahn pointed to a recently released study by Stanford researchers that analyzed 4 million job applications submitted for 1,700 job postings across 150 employers and 11 industries. It found that a particular algorithm used to automate hiring decisions widely discriminated against Black and Asian job applicants.

“25.87% of applications submitted by Black applicants and 14.74% of applications submitted by Asian applicants are directed to positions that adversely impact them based on the standards of the relevant U.S. employment law (Title VII),” wrote the authors.

“It’s a pretty significant amount,” Kahn observed, adding that the results give credence to legislators’ concern that AI could be deeply discriminatory, at least when assessing job applicants.

Kahn said employers need to be careful in assessing the tools they use to automate their hiring decisions. He said it likely won’t be enough for compliance professionals to rely on the word of their vendors.

Then again, Kahn also said he didn’t believe that a lot of the discrimination that may be occurring due to AI is intentional.

Legislators Yet to Pass Laws to Mitigate AI Job Losses

Kahn said that while some legislatures have introduced bills to address AI job displacement, no laws mandating AI-displacement mitigation in the private sector have been enacted — yet.

At least seven states and Congress have considered bills this year aimed at mitigating the impact of AI on human-held jobs, according to an article by Littler Mendelson PC and LexisNexis® State Net® data.

Of particular interest to Kahn, however, is a recent executive order signed by California Gov. Gavin Newsom (D) that directs California agencies and other entities to analyze the impact of AI on the workforce.

Among other things, it orders the state’s Labor and Workforce Development Agency to provide recommendations for revisions to the California Worker Adjustment and Retraining Notification (CalWARN) Act, which mandates that covered employers provide written notices before making substantial layoffs. (See the Mass Layoff and Plant Closing Notification Laws section of Terminations (CA).)

The EO doesn’t create any immediate employer mandates, but Kahn said it points to where things are headed.

“Employers are going to have to think about how they justify firings, including mass layoffs,” he said.

AI is already displacing people’s jobs, and, as it improves, it will likely displace more, Kahn said. In fact, he said the pace of the technology’s advancement has been so fast that once-outlandish ideas like universal income may someday be viewed as essential, at least to some legislators.

For now, however, he said lawmakers and employers are focused on discrimination and other near-term concerns, like employers’ use of AI to monitor workers or workers’ feeding of proprietary company information into widely used commercial AI products like ChatGPT.

In short, Kahn said when it comes to AI in the workplace, for employers and employees alike, “You’ve got to be really, really careful.”

— By SNCJ Correspondent BRIAN JOSEPH

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