State lawmakers around the U.S. are increasingly targeting employer use of AI to determine employee pay, with several states expected to introduce new legislation this year.
Why it matters: As AI regulation finally (and slowly) begins to catch up with development and deployment, a new state patchwork of laws on AI workplace use cases is starting to develop.
Proposed legislation: Several states, including California, Colorado Georgia, and Illinois introduced legislation targeting use of AI in compensation decisions in 2025, and more – including New York and Maryland – have bills on the books for 2026. As of now, no states have passed such bills.
What do these proposed laws look like? The proposals aim to curb potential discriminatory pay practices resulting from AI, as well as increasing transparency about its use. The various bills share several key features, including broad definitions of “automated decision systems” that could touch upon many different types of technologies used by employers in making total rewards decisions and beyond. Compliance requirements often include clear disclosures to employees regarding the use of AI tools. However, the lack of clarity regarding how AI tools develop their recommendation makes full transparency difficult. Read more here.
Learn more: To learn more about state AI legal developments and other emerging trends across the state law landscape, join us on February 24th for a webinar: States of Play: 2026 State Law Developments Worth Watching
