New York Proposal To Protect Workers Displaced By Artificial Intelligence

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On 14 January 2025, during her State of the State Address (the Address), New York Governor Kathy Hochul announced a new proposal aimed at supporting workers displaced by artificial intelligence (AI).¹This proposal would require employers to disclose whether AI tools played a role in mass layoffs or closings subject to New York's Worker Adjustment and Retraining Notification Act (NY WARN Act). Governor Hochul announced that she is directing the New York State Department of Labor (DOL) to enact and enforce this requirement. The DOL does not have a timeline for implementing the new requirement, and Labor Commissioner Roberta Reardon acknowledged that "defining what counts as an AI-related layoff would be a challenge [to implementation]."²

In the Address, Governor Hochul acknowledged the benefits of AI, stating, "[innovations in AI] have the ability to change the way businesses operate, leading to greater efficiency, fewer business disruptions, and increased responsiveness to customer needs." However, the implementation of AI tools in the workplace leads to increased automation, which may result in increased job loss, wage stagnation or loss, reduced hiring, lack of job satisfaction, and skill obsolescence—all of which are major concerns for US workers.³

The primary goals of imposing these employer disclosures are to: (i) aid transparency and gather data on the impact of AI technologies on employment and employees; and (ii) ensure the integration of AI tools into the workforce creates an environment where workers can thrive.

Implications for Employers

Disclosure Requirement

Employers in New York will need to disclose in their NY WARN Act notices whether layoffs are due to the implementation of AI tools replacing employees.

Scope

While specific details about the scope of the new disclosure requirement are not yet available, employers should prepare for this additional obligation as part of the existing complex notice requirements under the NY WARN Act.⁴

Compliance

Employers contemplating a NY WARN Act-triggering event should consult with legal counsel to ensure compliance with these disclosure requirements and expanded NY WARN Act obligations.

NY WARN Act

The Worker Adjustment and Retraining Notification Act (WARN Act) is a federal law that requires covered employers to provide employees with 60-day advance notice before closing a plant or conducting a mass layoff.⁵The purpose of the WARN Act is to give workers and their families time to adjust to potential layoffs and to seek or train for new jobs.⁶New York is one of 18 states with its own "mini-WARN Act." The NY WARN Act imposes stricter requirements than the federal WARN Act. For example, the NY WARN Act applies to employers with 50 or more employees while the federal WARN Act applies to employers with 100 or more employees. The NY WARN Act also requires a 90-day advance notice, compared to the 60-day notice required under federal law. The early warning notices of closures and layoffs are provided to affected employees, their representatives, and the Department of Labor and local officials. If Governor Hochul's proposal is enforced, NY WARN Act notices will also need to include the required AI disclosure.

Takeaways for Employers

Employers should be well versed in how AI tools are being used and the impact they are having on workers, especially if such impacts may lead to mass layoffs. Specifically, legal and human resources leaders should understand how the business is automating certain processes through AI tools and the implications the tools have on headcount requirements, employee job satisfaction and morale.

Our Labor, Employment, and Workplace Safety lawyers regularly counsel clients on a wide variety of issues related to emerging issues in labor, employment, and workplace safety law, and are well-positioned to provide guidance and assistance to clients on AI developments.

Footnote

1 https://www.governor.ny.gov/news/governor-hochul-announces-new-proposals-support-small-businesses-and-boost-economic-growth

2 https://news.bloomberglaw.com/product/blaw/bloomberglawnews/exp/eyJpZCI6IjAwMDAwMTk0LTcxNTYtZDIzYy1hYmZjLTc1ZmU5NDhiMDAwMSIsImN0eHQiOiJETE5XIiwidXVpZCI6ImhqMGRvcTNKdGdrSkpKckZyL01QaUE9PU9seW0rTExPbVdiODlZZ1N6aWtDZHc9PSIsInRpbWUiOiIxNzM3Mzc0NjI2MDg5Iiwic2lnIjoiYTZXMnkwZnczcGZ3SnVpdlFrclV0S3FERFlnPSIsInYiOiIxIn0=?source=newsletter&item=body-link®ion=text-section&channel=daily-labor-report

3 https://www.imf.org/en/Blogs/Articles/2024/01/14/ai-will-transform-the-global-economy-lets-make-sure-it-benefits-humanity#:~:text=Roughly%20half%20the%20exposed%20jobs,of%20these%20jobs%20may%20disappear; https://cepr.org/voxeu/columns/workers-responses-threat-automation.

4 12 NYCRR Part 92

5 https://www.dol.gov/general/topic/termination/plantclosings

6 Id.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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