Employers that use artificial intelligence — and developers that create AI systems — could be subject to extensive new laws under several bills introduced by federal legislators. While much of the existing legal landscape on AI centers on broad, overarching principles, Congress has been considering bills that hone in on more specific issues like the workplace. We’ll outline the three federal bills that employers should care about most, covering issues ranging from overreliance on automated decision systems — or “robot bosses” — to workplace surveillance — or “spying bosses.” As we are approaching the tail end of the 118th Congress, it is unlikely that the legislation mentioned will pass in its current form in 2024. That being said, we expect some or all of the bills to be re-introduced in the next legislative session.
Existing Federal AI Rules and Initiatives
Over the past several years, the federal government has ramped up its efforts to govern the development, design, and usage of AI. Here’s a sample of the laws, guidance, and standards already in place:
- The AI in Government Act (enacted in 2020) requires the U.S. Office of Personnel Management to identify the skills and competencies needed for AI-related federal positions. The National AI Initiative Act (enacted in 2021) establishes an overarching framework for a national AI strategy and federal offices and tasks force to implement it. The AI Training Act (enacted in 2022) requires the U.S. Office of Management and Budget Director to establish or provide an AI training program for the acquisition workforce and other purposes.
- The EEOC AI and Algorithmic Fairness Initiative (launched in 2021) requires AI tools used for hiring and other employment decisions to comply with federal equal employment opportunity laws. EEOC guidance issued in 2022 makes it clear that employers’ use of software, algorithms, and AI for assessing job applicants and employees may violate the Americans with Disabilities Act. And another EEOC technical assistance document released last year warns employers that the agency will apply long-standing legal principles in an effort to find possible Title VII violations related to the use of AI with employment-related actions.
- The Executive Order On Safe, Secure, and Trustworthy AI (issued in 2023) contains new AI standards covering nearly every aspect of our daily lives, including many employment-related items such as initiatives to prevent AI-based discrimination. The executive order built on the White House’s Blueprint for an AI Bill of Rights (released in 2022). We previously covered the key employer takeaways in the executive order and the blueprint, which you can read here and here.
Proposed New Rules: Top 3 Bills Employers Should Know About
1. No Robot Bosses Act, S. 2419, introduced by Sen. Bob Casey (D-PA)
The aptly named “No Robot Bosses Act” would ban employers from relying exclusively on automated decision systems (ADS) to make “employment-related decisions” — which is broadly defined to include decisions at the recruiting stage through termination and everything in between (such as pay, scheduling, and benefits). The bill would protect not only employees and applicants but also independent contractors.
Employers would be barred from even using ADS output to make employment-related decisions, unless certain conditions are met, such as the employer independently supporting that output via meaningful human oversight). The bill would impose additional requirements on employers (for example, training employees on how to use ADS) and establish a Technology and Worker Protection Division within the Department of Labor. The bill currently has four Democratic co-sponsors, two of which, Sens. Bernie Sanders (I-VT) and Ben Ray Lujan (D-NM) are members of the legislation’s committee of jurisdiction, the Senate Health, Education, Labor, and Pensions (HELP) Committee. Additionally, the bill’s lead sponsor, Sen. Bob Casey, is locked in a tight re-election race and may or may not be back in Congress to re-introduce it in the 119th Congress. Despite the uncertainty with Sen. Casey’s election, Rep. Suzanne Bonamici (D-OR) introduced companion legislation in the House that could gain traction if there is a shakeup in the balance of power in November.
The “Stop Spying Bosses Act” targets (as its title suggests) invasive workplace surveillance. Technology that tracks employees — from their activity to even their location — is growing more common. This bill would require employers that engage in surveillance (such as employee tracking or monitoring) to disclose such information to employees and applicants. The disclosure would have to publicly and timely provide details about the data being collected and how the surveillance affects the employer’s employment-related decisions.
The bill also would:
- ban employers from collecting sensitive data, such as data collection while an individual is off-duty or data that interferes with union organizing; and
- establish a new Privacy and Technology division at the Department of Labor to enforce and regulate workplace surveillance.
Like the aforementioned No Robot Bosses Act, the bill also has four Democratic co-sponsors and faces an uncertain future in the next legislative session if Republicans regain Senate control and Ranking Member Bill Cassidy (R-LA) becomes Chair of the HELP Committee. That is not to say the bill won’t be re-introduced in a Republican Senate majority, but it is less likely that Sen. Cassidy would allow for a committee-wide vote on it, a fundamental step required for passage.
A proposed “Algorithmic Accountability Act” seeks to regulate how companies use AI to make “critical decisions,” including those that significantly affect an individual’s employment. For example, companies would be required to:
- assess the impacts of automated decision systems when making critical decisions – which would include identifying (among many other factors) any biases or discrimination; and
- provide related ongoing training and education for all relevant employees, contractors, or other agents.
The Federal Trade Commission (FTC) would be required to create regulations to carry out the purpose of the bill. While Sen. Wyden’s legislation has more co-sponsors than either of Sen. Casey’s bills, its House companion bill (introduced by Rep. Yvette Clarke (D-NY) has a greater chance of passing under a potentially Democratic-controlled lower chamber.
Other Federal Bills Considered This Session
Here’s a sample of other types of bills that have been introduced:
Proposed bipartisan legislation known as the American Privacy Rights Act (APRA), would have provided a national framework bolstering AI innovation while strengthening transparency and accountability standards for high-impact AI systems. The bill faced an immediate uphill battle after industry groups raised concerns, which ultimately caused House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), the bill’s GOP sponsor, to abruptly cancel a scheduled markup minutes before members were set to deliberate on the legislation. Another comprehensive bill would have established guardrails for AI, established an independent oversight body, and held AI companies liable — through entity enforcement and private rights of action — when their AI systems cause certain harms, such as privacy breaches or civil rights violations.
AI Labeling and Deepfake Transparency
One bill aimed to protect consumers by requiring developers of AI systems to include clear labels and disclosures on AI-generated content and interactions with AI chatbots. Another bill would have required similar disclosures from developers and required online platforms to label AI-generated content.
AI Cybersecurity and Data Privacy Risks
Several bills targeted cybersecurity and data privacy issues, including a bill that would have made it an unfair or deceptive practice (subject to FTC enforcement) for online platformers to fail to obtain consumer consent before using their personal data to train AI models.
A Glance at the States
The 118th Congress has been a hotbed for federal legislation attempting to regulate AI (though many of the bills have not passed) and individual states are no different. Here’s a rundown of legislative activity pertaining to AI in state houses across the country:
- CA: The California Assembly has moved on several AI bills this session but not all of them have been successfully enacted. For instance, AB 2930, aimed at preventing algorithmic bias, was pulled by the bill’s lead sponsor after a backlash from business groups and industry leaders. Governor Gavin Newsom (D) is also facing pressure to sign or veto SB 1047, a bill that seeks to regulate AI models offered by CA businesses after signing another SAG-AFTRA-endorsed law that gives performers greater control over their voice and likeness.
- IL: Governor J.B. Pritzker (D) signed a bill addressing employers’ use of AI. Specifically, HB 3773 requires businesses to notify employees when the technology is used in various employment decisions including, but not limited to, recruitment, promotion, and termination.
- CO: This year, the Centennial State became the first state to enact comprehensive AI legislation. The Colorado AI Act, which prohibits employers from using artificial intelligence to discriminate against workers and implements additional rules for the technology’s developers and deployers, was signed into law by Governor Jared Polis (D). Though the governor ultimately signed the sweeping policy changes into law, he also sent a letter to the CO General Assembly requesting lawmakers “fine tune” the law before it goes into effect in early 2026 to ensure it does not hamper innovation.
What’s Next
Despite some movement at the state level, federal AI/privacy legislation faced notable roadblocks this year. With November’s presidential election looming, it is not likely we will see any significant comprehensive AI bills signed into law prior to the end of this legislative session. That said, members of Congress have noted that we will see several amendments tacked onto Congress’ must-pass National Defense Authorization Act (NDAA) as well as the Farm Bill. Be sure to keep abreast of any provisions that could impact your business along with state bills that arise.
Benjamin M. Ebbink is a partner in the Sacramento and Washington D.C. offices and Co-Chair of the Government Relations Practice Group. With over two decades of experience in the intersection between labor and employment law and public policy, he focuses on legislation and regulations enacted at the federal, state and local levels. Benjamin assists employers with navigating evolving legislative and regulatory landscapes in a variety of areas. He is also a member of the firm’s Artificial Intelligence Team, where he monitors the rapidly-developing regulation of artificial intelligence at the federal and state level. He can be reached at [email protected].
This article appeared in Cybersecurity Law & Strategy, an ALM publication for privacy and security professionals, Chief Information Security Officers, Chief Information Officers, Chief Technology Officers, Corporate Counsel, Internet and Tech Practitioners, In-House Counsel. Visit the website to learn more.