Navigating Workplace AI When Federal and State Policies Clash
This article discusses ongoing legislative efforts at federal, state, and local levels aimed at understanding and regulating the use of artificial intelligence (AI) in employment-related decisions.
Legislative Developments
Employers must stay informed about two significant recent efforts: a bipartisan U.S. Senate bill requiring certain companies to report on personnel decisions affected by AI, and a similar bipartisan bill in the U.S. House of Representatives mandating human oversight and disclosure of AI tools used in employment decisions. These legislative proposals may conflict with a White House executive order that advocates for a minimally burdensome national framework for AI regulation.
The Senate Bill: AI-Related Job Impacts Clarity Act
On November 5, Senators Josh Hawley and Mark Warner introduced the AI-Related Job Impacts Clarity Act, aimed at enhancing transparency regarding AI’s impact on the workforce. This bill would require covered entities to file quarterly reports to the U.S. Department of Labor, detailing:
- Number of employees laid off due to AI automation.
- Number of employees hired as a result of adopting AI.
- Vacancies not filled because of AI-driven replacements.
- Number of employees retrained due to AI.
The bill targets publicly traded companies as well as a yet-to-be-defined group of private companies, necessitating regulations within 180 days post-passage to identify which companies are affected. Employers must prepare for compliance by documenting how AI affects personnel decisions and tracking related data.
Implications for Employers
Employers should consider the following:
- Designate a responsible team to assess AI’s impact on personnel decisions.
- Develop systems for tracking how AI affects hiring and layoffs.
- Ensure proper documentation to demonstrate compliance with the bill’s requirements.
The House Bill: No Robot Bosses Act of 2025
Following the Senate’s lead, a bipartisan group in Congress introduced the No Robot Bosses Act of 2025 on December 3. This act would require employers with 11 or more employees to:
- Audit AI tools for discrimination and bias prior to use and periodically thereafter.
- Provide independent human oversight of decisions made by AI tools.
- Disclose the use of AI tools in employment-related decisions.
This bill represents a more direct approach to regulating AI in the workplace, but its fate remains uncertain, particularly in light of previous proposals lacking bipartisan support.
State Laws on AI
Several states, including California, Colorado, Illinois, New York City, and Texas, have enacted their own AI-related employment laws. These laws generally restrict how AI can be utilized in employment decisions, with provisions such as:
- Prohibiting AI use that discriminates against applicants.
- Mandating notifications to employees when AI is employed in hiring processes.
- Requiring bias audits for AI tools used in hiring.
Employers must evaluate their processes to ensure compliance with these state regulations, especially when hiring remote applicants in jurisdictions with AI laws.
The White House Executive Order
On December 11, the White House issued Executive Order No. 14365, which critiques excessive state regulation of AI as a hindrance to innovation. The order calls for a national policy framework for AI that minimizes state-level restrictions and establishes a dedicated AI litigation task force to challenge conflicting state laws.
Conclusion
The ongoing legislative activity reflects bipartisan interest in understanding AI’s workforce implications and establishing regulations for its use in employment settings. Employers are encouraged to proactively monitor their AI usage and stay updated on both federal and state legal developments to ensure compliance.
