Artificial Intelligence (AI) tools are becoming more prevalent in the workplace, allowing employers and employees alike to work smarter, faster, and better. Despite these benefits, the increased use of AI in the workplace has created legal concerns, particularly where AI bias leads to discrimination against employees and job applicants.
As a result, multiple states and localities have proposed or enacted laws to combat the harmful effects of AI in the workplace, including California, Connecticut, Illinois, New Jersey, and New York City. Pennsylvania has not yet adopted a comprehensive AI law, though the Commonwealth regulates AI through various existing frameworks.
Below, KingSpry’s Employment Law Chair, Avery E. Smith, Esq., provides an overview of AI regulation across the nation and offers practical guidance to Pennsylvania employers to ensure legally compliant AI practices and procedures.
What are Other States Doing?
California
On May 21, 2026, California Governor Gavin Newsom issued an Executive Order, providing that “California is implementing several initiatives that address potential risks and opportunities associated with AI and other new technologies.” Those initiatives include strengthening employee protections to prohibit employment discrimination caused by the use of automated decision systems. The Executive Order also calls on California officials to review and report on potential workforce impacts, including the impact of AI on California’s labor market and certain demographics.
A significant case, Mobley v. Workday, is also pending in the United States District Court for the Northern District of California. There, the plaintiff filed a lawsuit for employment discrimination against Workday, Inc., alleging that its applicant screening tools discriminated against him and other applicants on the basis of their protected classes.
Connecticut
Connecticut recently enacted a sweeping AI law, the Connecticut Artificial Intelligence Responsibility and Transparency Act. Relevant to Connecticut employers, the Act addresses the use of “automated employment-related decision technology” (AEDT).
The Act defines AEDT as “any technology that processes personal data and uses computation to generate any output, including . . . any prediction, recommendation, classification, ranking, score or other information, that is a substantial factor used to make or materially influence an employment-related decision.” Employment-related decisions include decisions to hire, promote, discipline, or discharge an employee or applicant—to name a few.
The Act prevents covered Connecticut employers from raising their use of AEDT as a defense to complaints alleging discrimination; however, Connecticut courts may consider evidence of anti-bias testing or similar proactive efforts.
Connecticut employers may also face disclosure obligations when using AI in personnel management. For example, employers who deploy AEDT must disclose certain information to employees and applicants when they use AEDT to make employment-related decisions.
Illinois
Earlier this year, Illinois enacted House Bill 3773, providing that covered Illinois employers cannot use AI tools in a manner that discriminates against their employees. The law also requires Illinois employers to provide notice to their employees when AI is used to recruit, hire, promote, discharge, or discipline an employee, among other employment-related decisions.
New Jersey
New Jersey’s Administrative Code recognizes how the use of automated employment decision tools may have a disparate impact on applicants and employees based on their protected classes. For example, where most of a company’s employees are white, cisgender men, the use of an automated employment decision tool may discriminate against female or non-white applicants whose application materials indicate their involvement in “Women’s Field Hockey” or “Black Student Alliance.”
New York City
Since 2021, Local Law 144 has prohibited covered New York City employers and employment agencies from using automated decision tools to screen job applicants or employees for employment-related decisions. The law does, however, provide an exception where the automated decision tool was subject to a bias audit in the last year and a summary of the audit is publicly available. The law also requires New York City employers to notify applicants and employees when an automated employment decision tool was used to screen them.
The foregoing policies and laws do not apply to employers operating under the laws of the Commonwealth of Pennsylvania. Non-Pennsylvania employers with questions should consult legal counsel in their respective states.
Pennsylvania’s AI Landscape
Pennsylvania has yet to enact a single, comprehensive AI law. However, Pennsylvania employers must be cognizant of several anti-discrimination laws that could be violated through the use of AI tools in the workplace.
PHRA. The Pennsylvania Human Relations Act (PHRA) prohibits employment discrimination based on protected characteristics, including race, color, religious creed, ancestry, sex, national origin, and non-job-related handicap or disability.
Title VI. Title VI of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, color, or national origin in any program or activity receiving federal financial assistance.
Title IX. Title IX of the Educational Amendments of 1972 prohibits employment discrimination on the basis of sex in federally funded education programs.
ADA. The American with Disabilities Act of 1990 prohibits employment discrimination against qualified individuals with a disability.
ADEA. The Age Discrimination in Employment Act prohibits employment discrimination against individuals 40 years of age or older.
Best Practices for Employers
- Adopt and enforce legally defensible AI policies.
- Conduct bias audits for any AI tools used to make employment-related decisions.
- Protect employee data and privacy by limiting AI access to only necessary and legally accessible employee data.
- Maintain human oversight in important decisions.
- Promote transparency with employees and applicants by voluntarily disclosing when, where, and how AI tools are being used in workplace processes.
- Train your workforce on responsible AI use.
- Monitor performance, bias, and reliability of AI tools.
- Keep records relating to AI decisions and audits.
- Balance the use of effective AI tools with human knowledge and judgment.
KingSpry’s Employment Law Team understands that compliance is only the beginning and is a trusted resource for providing employment law advice, counsel, and representation. Whether your company requires a handbook review, employee investigation, representation, or advice on a new trend, KingSpry can help. If your company has questions regarding its employment practices and/or artificial intelligence, KingSpry’s Employment Law team is prepared to assist you.
Employment News is a publication of KingSpry’s Employment Law Group. These articles are meant to be informational and do not constitute legal advice.
