Navigating Workplace AI When Federal and State Policies Clash
Lawmakers at various levels are actively pursuing legislation aimed at understanding and regulating the use of artificial intelligence in employment-related decisions. Employers must stay informed about recent efforts, including:
The Senate Bill: Quarterly Updates on AI’s Impact on the Workforce
On November 5, Senators Josh Hawley and Mark Warner introduced the AI-Related Job Impacts Clarity Act. This bipartisan initiative seeks to enhance transparency regarding how AI affects the workforce. The bill mandates that certain entities file quarterly reports to the U.S. Department of Labor, detailing:
- Number of employees laid off due to AI replacement or automation.
- Number of new hires resulting from AI adoption.
- Vacancies not filled due to AI-driven replacement.
- Employees retrained because of AI-related changes.
These disclosures will apply to both publicly traded companies and a yet-to-be-defined group of private companies deemed significant in terms of workforce size and impact. The Secretary of Labor will summarize the reported data in quarterly and annual reports.
Implications for Employers
Employers should evaluate their readiness to meet the reporting obligations of this Senate bill, including:
- Determining responsibility for assessing AI’s impact on personnel decisions.
- Establishing methods to track AI’s role in hiring and layoffs.
- Ensuring internal systems can document AI’s influence on employment.
Proactive monitoring of AI usage and compliance with potential reporting requirements will be crucial for employers moving forward.
The House Bill: Human Oversight and Disclosure of AI Tools in Employment
In parallel, the No Robot Bosses Act of 2025 was introduced by Representatives Suzanne Bonamici, Chris Deluzio, and James Moylan. This act mandates:
- Audits of AI tools for bias and discrimination prior to use and periodically thereafter.
- Independent human oversight of AI-generated decisions.
- Disclosure to employees regarding the use of AI in hiring, firing, and other employment-related decisions.
This bill’s fate remains uncertain amid bipartisan discussions, especially in light of prior proposals lacking support.
State Laws Regarding AI
Multiple states, including California, Colorado, Illinois, and New York City, have enacted legislation addressing AI’s impact on employment. These laws generally restrict AI usage in ways that may discriminate against applicants. For example:
- California and Texas prevent AI use that discriminates in hiring.
- Colorado, Illinois, and New York City require notifications when AI is used in hiring decisions.
- New York City mandates bias audits for AI tools used in employment.
Employers must ensure compliance with these state laws, especially when recruiting or employing remote workers in jurisdictions with such regulations.
The White House’s Executive Order
Amidst these developments, the White House issued Executive Order No. 14365, which criticizes excessive state regulation of AI. The order promotes a national policy framework that minimizes burdens on innovation and directs the creation of an AI litigation task force to challenge state laws conflicting with national objectives.
This executive order’s preference for a less restrictive national policy may conflict with existing state laws, raising questions about future legal challenges.
Conclusion
As the Senate and House bills reflect bipartisan interest in the implications of AI on employment, employers must proactively monitor their use of AI technologies and remain vigilant regarding updates to both federal and state regulations. The evolving landscape necessitates a thorough understanding of compliance requirements to navigate the complexities introduced by AI in the workplace.
