What Employers Should Know About President Trump’s AI Executive Order
On December 11, 2025, President Trump signed an Executive Order titled Ensuring a National Policy Framework for Artificial Intelligence (the EO). This EO targets state laws regulating artificial intelligence and creates potential compliance challenges that employers must carefully navigate.
Key Aspects of the EO
The EO’s purpose is to encourage AI innovation, reduce barriers to AI development, lessen inconsistencies in state regulation, and target laws deemed to “embed ideological bias within models.” The EO will create an AI Litigation Task Force charged with challenging state laws considered inconsistent with the EO’s goals. It is currently unclear which states or specific laws the Task Force may target, creating uncertainty regarding the potential impact on existing legislation.
Current AI State Laws
Many employers use AI in aspects of hiring, recruitment, and onboarding. To address concerns about potential discriminatory decisions stemming from AI use, several states—including California—have enacted laws to mitigate risks of biased AI-driven employment decisions. For example, California passed the California Consumer Privacy Act (CCPA), effective January 1, 2026. The CCPA requires businesses using AI (without human oversight) in employment decisions—such as hiring, promotion, and job assignment—to conduct risk assessments, provide pre-use notice, and allow opt-out rights.
Other states with similar AI employment laws effective in 2026 include Colorado, Illinois, Maryland, and Texas.
The interplay between the EO and this patchwork of state AI employment laws creates uncertainty about compliance requirements under the state frameworks, the EO, or both.
What Employers Need to Know
The EO does not currently invalidate any existing state or local AI laws. Thus, unless a court issues an injunction or Congress enacts a federal law preempting these regulations, such state and local laws remain enforceable.
Employers should continue complying with all applicable state and local AI employment laws. Given the growing adoption of AI in employment decisions and the evolving regulatory landscape at both state and federal levels, it is critical for employers to stay informed. Businesses using AI in employment contexts should consult experienced legal counsel to ensure compliance with current and forthcoming regulations.
