AI-related employment regulations continue to expand at the state level, with recent developments in Connecticut and Colorado introducing new notice, disclosure, and oversight requirements for employers.
AI-Driven Layoff Decisions Face Legal Scrutiny in New Lawsuit
Employers: A Cautionary Tale about Using AI Tools in Decision-making
Twenty-six current and former employees have sued a major technology company in California federal court, alleging it used biased artificial intelligence systems to select workers for a May 2026 layoff affecting roughly 10 percent of its workforce.
The plaintiffs claim the tools measured productivity and
Maine Employers Face New Workplace Surveillance Compliance Requirements
Maine employers:
You have a new workplace surveillance compliance obligation taking effect on July 14, 2026 under Maine’s Act to Regulate Employer Surveillance to Protect Workers.
The new law requires advance and annual notice of employer surveillance of employees, mandates disclosure during the hiring process, limits certain audiovisual monitoring in private spaces, and gives employees
AI in the Workplace: Employers May Face Growing Religious Accommodation Requests
Can an employee object to AI use in the workplace on religious grounds?
Recently in North Carolina, a software engineer who is a Unitarian Universalist, successfully obtained a religious-based workplace accommodation after stating that environmental and ethical objections to AI did not align with her religious beliefs. Should employers nationwide expect more requests for accommodation
Illinois Employers Face New AI Disclosure Requirements for Employment Decisions
Illinois Employers:
On May 15, the Illinois Department of Human Rights (IDHR) issued a Notice of Proposed Amendments which instruct employers when they are required to disclose their reliance on AI in employment decisions. The Proposed Amendments clarify Public Act 103-804, which went into effect January 1, 2026.
The Proposed Amendments provide that employers may
California Governor Signs Executive Order Directing Agencies to Study AI’s Impact on the States Labor Market
California Employers:
Governor Newsom signed an executive order on May 21, 2026 directing various California agencies to study AI’s impact on the state’s labor market, including potential disproportionate impacts on certain demographic groups. The order demonstrates the executive branch’s appetite for enacting new AI-related employment regulations.
Key directives include requiring the Labor and Workforce Development
Colorado Lawmakers Pass Bill That Repeals and Replaces Comprehensive AI Law Following Constitutional Challenge
Colorado Employers: A Highly Anticipated Update for You:
Colorado’s comprehensive AI law (the “CO AI Law”), originally set to take effect June 30, 2026, has been stayed by a federal magistrate judge following a constitutional challenge brought by xAI and supported by the DOJ, and the Colorado Attorney General has agreed not to enforce it.
Key Trends and Next Steps Surrounding Subscription Business Compliance
Subscription businesses beware: the compliance landscape is shifting quickly, and regulators are paying close attention.
Even with uncertainty around the FTC’s “click to cancel” rule, enforcement isn’t slowing down. Federal and state authorities continue to prioritize automatic renewal practices, with new laws and actions shaping expectations in 2026.
What should your business focus on now?
Department of Labor Proposes New Economic‑Reality Test for Independent Contractors
On February 26, 2026, the United States Department of Labor proposed a new rule requiring use of an “economic reality” test in analyzing employee/independent contractor classification under several federal employment laws. If adopted, the proposed rule would replace the 2024 Biden-era rule, which applied a non-exhaustive six-factor “totality of the circumstances” framework, with a framework
NYC Amends Earned Safe and Sick Time and Temporary Schedule Change Laws
- require additional unpaid leave;
- expand the reasons for which paid and unpaid sick and safe time can be used; and
- reduce employer obligations under the Temporary Schedule