Employers increasingly rely on automated tools to help make decisions concerning hiring, promotion, discipline, and termination. In response, state legislatures and agencies have begun to regulate uses of these technologies, often referred to as automated decision-making technology (“ADMT”). These laws generally require entities that deploy ADMT in the employment context to, among other requirements, notify affected individuals, disclose how ADMT factors into decisions, and provide rights to appeal or request human review.
This remains a fast-moving area and a hot topic for legislative and regulatory focus, with several states enacting laws this year and additional bills pending. Below, we summarize the key legislative and regulatory ADMT developments that apply in the employment context.
California ADMT and Pending Legislation
In 2025, the California Privacy Protection Agency approved regulations governing the use of ADMT for “significant decisions” concerning consumers, including job applicants, employees, and independent contractors. Pursuant to these rules, beginning January 1, 2027, employers that use ADMT for a “significant decision” (a decision resulting in the provision or denial of employment or independent contracting opportunities including hiring, allocation of work, compensation, and termination) must provide pre-use notice, offer individuals the ability to opt out, and conduct a risk assessment, among other requirements, unless an exception applies. For a more detailed discussion of California’s ADMT regulations, see our prior blog post.
Additionally, the California legislature is considering further restrictions. SB 947 (the “No Robo Bosses Act”) would prohibit employers from relying solely on an automated decision system (“ADS”) to make significant decisions and would require an independent human investigation to corroborate any ADS output. SB 951 (the “AI Job Killer Notice Act”) would require covered employers to give affected workers and certain local entities advance notice, potentially up to 90 days, before a layoff attributable to AI or ADMT. Both bills cleared the Senate and are currently being considered in the Assembly. Employers should continue monitoring both bills for any developments.
Colorado SB 26-189
On May 14, 2026, the Colorado governor signed SB 26-189 into law, repealing and replacing Colorado’s original 2024 Artificial Intelligence Act. The revised law, which takes effect on January 1, 2027, pares back the original’s broader “high-risk artificial intelligence system” framework in favor of a narrower approach focused on ADMT used in consequential decisions. The new law regulates ADMT used to “materially influence” “consequential decisions,” including decisions related to employment or employment opportunity that creates or may create an employer-employee relationship. An ADMT output “materially influences” a consequential decision when it is a non-de minimis factor used in making the decision and affects the outcome, including by ranking, recommending, or otherwise meaningfully altering how the consequential decision is made.
Deployers of ADMT must notify individuals before using the technology to make consequential decisions concerning them. Also, within 30 days of a consequential decision that results in an adverse outcome, deployers must provide a plain-language disclosure of the decision and the role ADMT played in making that decision. In addition, deployers must provide instructions for a simple-to-follow process to request information, and an explanation of the individuals’ rights, including the right to correct inaccurate data, appeal the decision, and request meaningful human review and reconsideration, to the extent “commercially reasonable.” Deployers must retain records that demonstrate compliance for at least three years after the date of the consequential decision, including ADMT version identifiers, changelogs, and documentation of material mitigation changes.
On August 11, 2026, the Colorado Department of Law published a Notice of Proposed Rulemaking and draft ADMT regulations, which will further clarify deployer obligations. The Department is receiving written comments through October 26, 2026, and has scheduled a public hearing on the proposed regulations for October 26, 2026.
Connecticut SB 5
On June 2, 2026, the Connecticut governor signed SB 5, the Connecticut Artificial Intelligence Responsibility and Transparency Act (the “CART Act”) into law. The CART Act’s employment-related provisions apply to automated employment-related decision technology (“AEDT”) developed or deployed on or after October 1, 2027. AEDT is defined as technologies whose output is a “substantial factor” in decisions to hire, fire, promote, discipline, renew employment, or select an individual for training. The law defines “substantial factor” as a constraint, ranking, score, or other factor that meaningfully alters an employment-related outcome. Deployers using AEDT must disclose in plain language when employees or job applicants interact with such technology, unless it would otherwise be obvious to a reasonable person. Additionally, before making employment decisions using AEDT, deployers must provide written notice that AEDT has been deployed, the nature of the decision, the purpose and trade name of the AEDT, the categories of personal data analyzed and how it will be assessed, the sources of that data, and the deployer’s contact information. The Act also amends the Connecticut Fair Employment Practices Act to clarify that an employer’s use of AEDT is not a defense against a discrimination claim.
Delaware HB 380
On June 16, 2026, the Delaware General Assembly passed HB 380, which amended the Delaware Personal Data Privacy Act (“DPDPA”). If enacted, the bill would narrow the DPDPA’s employment-related exemption, which among other things would bring employee, applicant, and contractor data within the DPDPA’s scope when disclosed to any third party as part of a report in connection with a decision that produces legal or similarly significant effects concerning the individual. Among other things, employers and other parties would be required to include contractual terms in agreements with third parties, including to provide notice and information that an individual can request human review of an adverse action unless the opportunity for review is not in the “best interest” of the resident. HB 380 is awaiting the Delaware governor’s signature. If signed, the amendments would take effect on January 1, 2027. For a more detailed discussion of the bill’s consumer privacy requirements, see our prior blog post.
Illinois HB 3773 and Status of Rulemaking
Illinois’ HB 3773, which took effect on January 1, 2026, amended the Illinois Human Rights Act to require employers to notify applicants and employees when AI is used in a broad range of employment decisions, including decisions related to recruitment, hiring, promotion, selection for training, and discharge, among others. The law also prohibits the use of zip codes as a proxy for protected classes and confirms that using AI in a manner that discriminates on the basis of a protected class is unlawful. For further discussion of its key provisions, see our prior blog post.
On May 15, 2026, the Illinois Department of Human Rights (“IDHR”) published proposed rules implementing HB 3773, detailing employers’ notice obligations. However, on June 2, 2026, the IDHR announced that it was temporarily withdrawing the proposed rules to allow for continued collaboration with other state agencies. No revised timeline has been announced. Although the rulemaking process has been paused, employers should continue preparing for compliance with HB 3773 and monitor for the reopening of the comment period.
Next Steps
Given the pace of ADMT legislation, employers should inventory the automated tools currently used in hiring, promotion, discipline, termination, and other consequential employment decisions. They should also assess each state’s applicable notice, opt-out, and human review obligations against upcoming effective dates, many of which take effect on January 1, 2027. Employers should also develop policies and processes to ensure that they are satisfying relevant requirements when using AI in the employment context and considering these requirements when onboarding new tools. California employers should also monitor SB 947 and SB 951 for any developments.