Many employers use AI systems to do an initial screening of employment applications received for open positions, and for other purposes as well. Connecticut and Colorado have passed new laws, taking effect soon, that will require employers who use such systems to disclose their use and create potential liability for failure to do so.

Connecticut. In Connecticut, as of October 1, 2026, employers who use AI systems must notify employees and applicants who will be interacting with such systems of that fact “in plain language,” unless a “reasonable person would deem it obvious that such person is interacting with an automated employment related decision technology.”

One year later, effective October 1, 2027, employers who use such technologies will be required to provide more detailed notices, including: the purpose of the technology and the nature of the employment-related decision it will be used for; the trade name of the technology; the categories of personal data that will be analyzed and their sources; and contact information for the employer. The provisions of this law will be enforced by the state’s Attorney General; there will be no private right of action for violations. Employers should note that the use of AI technologies will not be a defense to any claim of unlawful discrimination, though proactive attempts to curb potential bias will be taken into account.

Colorado. Colorado’s new law takes effect on January 1, 2027, and similarly requires that any “consumer” – which includes an employee or job applicant who is a Colorado resident – about whom any “consequential decision” may be made using this kind of technology be informed by “clear and conspicuous” notice (which can be an electronic link or posting) that the employer is using this technology and how the consumer can obtain additional information. If the result of the decision is adverse to the employee/ applicant, the company is required within 30 days to provide a “plain language” explanation of the role the technology played in the decision and a simple process for obtaining details such as the name and version number of the technology, its developer, and the types, categories, and sources of the personal data used. Among the options available to someone challenging a decision is human review, but this can be avoided where not commercially reasonable. Further regulations are due to be drafted by the Colorado attorney general by January 1.

Employers who use AI systems should expect that similar laws will be passed all over the country in short order, and should be prepared to comply with the requirements of any and all states in which they operate.

Stokes Wagner will continue monitoring regulatory, legislative, and judicial developments affecting hospitality employers across New York. If your hotel, restaurant group, or asset team needs assistance navigating these changes, our attorneys are available to provide tailored compliance reviews, operational guidance, and training.

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