Connecticut Adds to Growing List of State Workplace AI Laws

Connecticut is putting employers on notice over workplace AI.

Effective Oct. 1, 2026, SB 5 clarifies that Connecticut employers facing a discrimination claim can’t blame the artificial intelligence (AI) tools they use to make hiring, promotion, discipline or termination decisions.

Other changes that kicked in the same day:

• Bias testing counts. The Connecticut Commission on Human Rights and Opportunities (CHRO) or a court may consider evidence that an employer tested its AI tools for bias.
• Layoff notices must mention AI. Employers filing federal Worker Adjustment and Retraining Notification (WARN) Act notices with the Connecticut Department of Labor must disclose whether a layoff is related to AI or another technological change.

And there’s more coming. The law’s second phase starts Oct. 1, 2027, when Connecticut employers will be required to provide:

• Interaction notices. Plain-language disclosures to applicants and employees when they’re interacting with an AI tool, unless the AI interaction would be obvious to a reasonable person.
• Pre-decision notices. Written notices to applicants and employees before a covered AI tool makes, or is a substantial factor in, an employment decision about them.

Employers also get a right to information from their HR tech vendors. Starting Oct. 1, 2027, HR tech vendors, wherever they’re based, must give employers the information they need to comply if their tools are in use in Connecticut and were sold, licensed, marketed or set up to influence employment decisions. Employers are still responsible for meeting the law’s requirements, though a vendor can agree in its contract to handle the notices.

For multistate employers, Connecticut adds to a growing list of state and local workplace AI rules.

More State and Local Workplace AI Laws and Regs

California: 2027 Deadlines and Existing Rules

On Sept. 30, Gov. Gavin Newsom signed a group of laws that limit how employers use AI to monitor, evaluate and lay off workers. Starting Jan. 1, 2027, the laws cover:

• Emotion tracking. Employers generally can’t use AI-enabled workplace surveillance to read or predict how employees feel, or to collect their neural data.
• Bathroom surveillance. No monitoring employees in workplace bathrooms, with narrow exceptions.
• AI layoffs. When a mass layoff is caused in whole or in substantial part by AI or automation, the Cal/WARN notice has to say “This notice is for a technology displacement” at the top, list the job functions being automated and name the type of technology involved.

And starting July 1, 2027, employers can’t discipline or fire employees based on an automated system alone. If an employer relies primarily on a system’s score, classification or recommendation, it must back that up with other evidence, such as supervisor evaluations, personnel files or witness interviews. Employers that primarily rely on the system must also give the employee a written post-use notice.

California also has two other sets of rules aimed at AI in hiring, one on the way and one already in effect:

• Notice and opt-out rules. Starting Jan. 1, 2027, privacy regulations require covered businesses that use workplace AI to replace or substantially replace human decision-making in hiring and other major job decisions to give advance notice, offer an opt-out unless they qualify for an exception that allows an appeal to a human reviewer instead, and answer questions about how the tool was used.
• Bias rules. Since Oct. 1, 2025, civil rights regulations have made employers with five or more employees responsible when an AI tool discriminates against applicants or employees. Employers must keep records, including the tool’s decision data, for four years.

Colorado: Replacement Law and Enforcement Pause

Colorado took a narrower approach to workplace AI regulation. In May, Gov. Jared Polis signed SB 26-189, which repealed the state’s original AI law before it took effect and replaced it with fewer requirements.

Starting Jan. 1, 2027, employers that use AI tools to materially influence hiring and other major job decisions about applicants and employees in Colorado must provide:

• Notice. A clear disclosure at the point of interaction when an AI tool will be used in a decision about them.
• Explanation. Within 30 days of a negative decision, such as not being hired, a plain-language explanation of the decision and the tool’s role in it, plus how to request more information and what rights they have.
• Human review. A chance to request meaningful human review and reconsideration of a negative decision, when commercially reasonable.
• Records. Compliance documentation kept for at least three years.

Employers and AI developers can both be held liable under Colorado’s existing anti-discrimination law when a covered AI tool materially influences an employment decision. Each party’s share of liability depends on its role, and a developer is liable only when its tool was used as intended or marketed. Contracts can’t shield either party from liability for its own discriminatory conduct.

SB 26-189 still takes effect Jan. 1, 2027, but enforcement is on hold. A federal court order in a lawsuit brought by AI company xAI bars the Colorado attorney general from starting enforcement, including investigations, over violations that occur up to 14 days after the court rules on xAI’s request to temporarily block the law. xAI has 28 days after the law’s rules are finalized to file that request.

Illinois: Rules Already in Effect

Since Jan. 1, 2026, HB 3773 has made two things become civil rights violations under the Illinois Human Rights Act:

• Discriminatory AI. Using AI that has the effect of discriminating against employees based on a protected class in recruitment, hiring, promotion, discipline, firing and other job decisions. Using ZIP codes as a stand-in for a protected class is also banned.
• Skipping notice. Using AI in those decisions without telling employees.

The law generally applies to employers with at least one employee in Illinois for 20 or more weeks in the current or previous year. What the notice has to look like is still unsettled. The Illinois Department of Human Rights proposed rules in May, then withdrew them in June with no new timeline. The notice requirement still applies in the meantime.

Illinois also has the Artificial Intelligence Video Interview Act, in effect since 2020. Employers that use AI to analyze recorded video interviews for Illinois-based jobs must tell applicants beforehand, explain how the AI works and what it evaluates, and get their consent. Employers can share the videos only with people needed to evaluate the applicant. If the applicant asks, employers must delete the videos within 30 days and tell anyone who received copies to delete theirs.

New York City: Audits and Advance Notice

New York City’s Local Law 144 has been enforced since July 5, 2023. Employers and employment agencies that use an automated tool to screen candidates or employees for hiring or promotion in the city must:

• Get a bias audit. Have an independent auditor check the tool’s selection or scoring rates by sex, race and ethnicity within one year before using it.
• Post the results. Publish a summary of the audit.
• Give notice. Tell candidates and employees at least 10 business days before the tool is used. They can ask for an alternative process or accommodation.

Workplace AI Lawsuits to Watch

Job applicants are already filing lawsuits over AI hiring tools, and the cases are testing when employers and vendors can be held responsible for automated screening.

Mobley v. Workday

In the most closely watched case, plaintiff Derek Mobley claims Workday’s AI screening tools rejected him from more than 100 jobs because of his race, age and disability. A federal court has already let the case move forward on the theory that Workday acted as an agent of the employers using its tools, and has conditionally certified a nationwide group of applicants 40 and older to pursue age discrimination claims together. On Sept. 14, the plaintiffs asked the court to expand the case into a class action covering Black applicants, women, applicants 40 and older, and applicants with disabilities.

Kistler v. Eightfold AI

Filed in January, Kistler v. Eightfold AI challenges an AI hiring tool under consumer protection law. Two applicants claim Eightfold’s platform scored them on a zero-to-five scale using info they never provided, without the notices and dispute rights the Fair Credit Reporting Act requires. If the plaintiffs win, some AI-generated applicant scores could count as consumer reports under federal law, the same category as background checks.

Harper v. Sirius XM

Sirius XM recently got an AI hiring bias case thrown out, at least for now. A Black applicant claimed Sirius XM’s hiring software rejected him from about 150 jobs based on stand-ins for race, such as ZIP codes and schools attended. On Sept. 30, a federal judge dismissed the complaint without prejudice, finding the applicant hadn’t alleged enough facts, such as statistics or a comparison group, to back up his claims. Sirius XM denied using AI in hiring, and the court didn’t decide that question.

7 Steps to Review AI Compliance in the Workplace

1. List every AI tool that evaluates or monitors applicants or employees. Include features built into your applicant tracking system and HR platform, plus assessments, chatbots, video interview tools and workplace monitoring tools. Flag any tool that produces a score, rank or recommendation used in hiring, promotion, discipline or firing decisions, then check which laws cover it.
2. Check where your applicants and employees are. Coverage can depend on where people live, where the job is located and where the employer does business, so remote workers and out-of-state applicants can bring a state’s or city’s rules into play.
3. Get answers from vendors and update contracts. Ask HR tech vendors what data each tool uses, how it scores people, whether it pulls in information applicants didn’t provide and whether it’s been tested for bias. Starting Oct. 1, 2027, Connecticut requires vendors to share the information employers need to comply, and in Colorado, contract terms that shield a company from liability for its own discriminatory AI use are void.
4. Test tools for bias. New York City requires an independent bias audit before an automated hiring tool is used, and in Connecticut, evidence of bias testing can be considered in a discrimination case. Check whether a tool turns away any group at higher rates, and repeat the check regularly. Any in-house testing is on top of New York City’s required independent audit.
5. Set up notices. Illinois and New York City already require notice when workplace AI tools are used. California and Colorado notice rules start Jan. 1, 2027, and Connecticut’s start Oct. 1, 2027. Notice rules differ in timing, content and who receives them, so build one notice process with versions for each state and city where you have people.
6. Check human review and appeal rights. Some rules require review before a decision, and others give people the right to appeal afterward. Starting July 1, 2027, California requires other evidence to back up AI-driven discipline and firing decisions before they’re made. California’s privacy rules require an opt-out unless the employer qualifies for an exception that allows an appeal to a human reviewer instead, and Colorado gives people the right to request human review of a negative decision. Make sure reviewers can override the tool and record why.
7. Keep records on workplace AI tools. California’s civil rights rules require employers to keep records, including automated decision data, for four years, and Colorado requires compliance records for at least three years. Keep vendor answers, audit results, notices and review decisions on file.