Artificial intelligence (AI) is increasingly changing how employers evaluate job applicants and existing employees. From reviewing resumes and employment histories to analyzing background information and identifying potential risks, AI can streamline hiring decisions. However, proposed legislation could impose additional disclosure requirements on employers using these technologies.
On May 11, 2026, New York lawmakers introduced Senate Bill S10290, known as the Bossware and Oppressive Technology Act. The legislation would regulate employers’ use of electronic monitoring and automated employment decision tools, including AI systems used to evaluate job applicants and employees.
Under the proposal, employers using covered automated decision-making tools would have to notify applicants and employees at least 10 business days before using the technology to evaluate them. The notice would identify the use of the technology, explain the qualifications and characteristics being evaluated, and describe the information the system analyzes. Employers would also need to explain how individuals could request additional information or challenge certain employment decisions.
The proposed legislation extends beyond traditional hiring decisions. Its definition of employment decisions includes recruitment, promotions, discipline, termination, work assignments, and other employment-related matters. The bill also defines employee data broadly to include criminal background information, employment history, and other personal information.
Importantly, the legislation would require independent impact assessments of covered automated employment decision tools. These assessments would evaluate potential discriminatory effects and other risks associated with the technology.
Although the bill remains pending in committee and has not become law, it reflects a growing legislative interest in regulating AI in the workplace.
New York City already imposes similar requirements under Local Law 144, which took effect in 2023. That law requires employers using qualifying automated employment decision tools for hiring or promotion to conduct independent bias audits and provide advance notice to affected applicants and employees.
These developments are particularly relevant to construction contractors, many of whom use third-party platforms to screen applicants, evaluate employment histories, and conduct background checks. Contractors may not realize that hiring software incorporates AI to rank candidates, identify perceived risks, or recommend employment decisions.
It is important to distinguish these proposals from existing federal requirements. The Fair Credit Reporting Act already requires employers to provide disclosures and obtain written authorization before obtaining employment background reports from consumer reporting agencies. Employers must also follow specific procedures before taking adverse action based on those reports.
AI-specific legislation could add another layer of compliance when employers use automated tools to evaluate the resulting information or otherwise assist in employment decisions.
👉 Takeaway: Employers should review their hiring and background screening practices to determine whether third-party vendors use AI or automated employment decision tools. Employers should understand what information these systems evaluate, how recommendations influence employment decisions, and whether applicable laws require advance notice, consent, or bias assessments.
Employers should also ensure that qualified personnel independently review employment decisions rather than relying exclusively on automated recommendations. As states continue considering AI-related employment legislation, transparency and human oversight will become increasingly important components of effective hiring practices.
