In its most recent bid to encourage employers to be transparent about the use of Artificial Intelligence in their hiring and termination practices, New York state now requires disclosures about whether mass layoffs were caused by AI.
New York’s Worker Adjustment and Retraining Notification (“WARN”) Act requires large employers (those with over 50 employees) to provide advance notice to employees and the Department of Labor before conducting certain mass layoffs. The notice form published online by the State has always required disclosure of the reason for layoffs (such as bankruptcy, funding loss, relocation, or sale of business). Beginning this month, however, the form also requires employers to identify whether the termination decisions were “a result of or motivated by . . . Technological Innovation or Automation.”
While the amendment does not change the WARN Act’s requirements themselves, it is the first law in the nation to require employers to disclose that AI contributed to mass layoffs. This information will be important in analyzing the impact these new technologies have on the workplace, the economy, and the future of business.
Although the WARN process itself is not upended by this new disclosure requirement, it is likely that other states will follow suit in order to gain economic insight into the tech revolution’s impact on jobs. It also seems likely that we will see more legislation regulating the use of AI in the termination process itself, which is an area fraught with risk, as well as other potential legislation governing employers’ use of AI at work.
In fact, this is not the first time New York has involved itself in the AI revolution. In 2023, New York City passed a law requiring employers who use AI as part of the application process or as part of their hiring and promotion decisions to disclose its use, and to conduct certain audits to confirm fairness and avoid bias in those decisions.
If your business is using AI or thinking of eliminating roles because of AI, we strongly encourage you to contact your Greenwald Doherty lawyer, who can help navigate the intersection of law and technology and ensure that your policies and practices are up to date and legally compliant.
