New York organizations using artificial intelligence should keep a close eye on two pending state bills that could create new notice and reporting obligations. Both bills have passed the Senate and Assembly, but as of June 25, 2026, neither appears to have been signed by the Governor. Still, they offer a clear signal that New York lawmakers are focused on transparency and workplace impact surrounding AI technologies.

The first bill, AB 3411B, would amend the General Business Law to require notices on generative artificial intelligence systems. The second, AB 9581B, would amend the Labor Law to require certain businesses to submit annual reports to the New York Department of Labor about how AI affects hiring and workforce decisions. Note, taking a different approach to tracking AI-related job loss trends, California recently announced the California AI-Unemployment Tracker (CAIT), a public tracker based on unemployment insurance claims.

Assembly Bill (AB) 3411B

AB 3411B would apply to the owner, licensee, or operator of a generative AI system. The bill defines a generative AI system as a class of AI models that are “self-supervised” and “emulate input data to generate synthetic content, including text, images, videos, audio, and other digital content.”

If enacted, the bill would require covered parties to “clearly and conspicuously” display a notice on the system’s user interface stating that outputs of the generative AI system may be inaccurate. Note the bill does not limit its reach to certain use cases, such as commercial or employment activities. The bill would take effect 90 days after becoming law.

Organizations that develop, license, operate, or deploy generative AI systems for employees, applicants, customers, or the public may need to evaluate whether their user interfaces include the required notice. This may include chatbots, applicant-facing tools, customer service systems, document-drafting tools, or AI-enabled decision-support platforms.

Failure to provide the required notice could result in a civil penalty of up to $1,000 per violation, with each user who does not receive the notice treated as a separate violation for each instance. Organizations using third-party AI tools should consider whether contracts clearly allocate responsibility for required notices, interface design, indemnification, and compliance updates.

If this law is passed, it will take effect on the 90th day after it is signed.

Assembly Bill (AB) 9581B

AB 9581B is more directly tied to employment compliance. It would apply to a “covered business,” defined as a business entity doing business in New York that either employs more than 50 people or is publicly traded.

Covered businesses would be required to report to the Department of Labor by March 1 each year regarding AI use during the prior calendar year. The report would need to address the impact of AI on hiring and the nature of the company’s AI use.

Required employment data would include estimates of the number of employees displaced, employees whose hours were reduced, employees hired or whose hours increased, and previously filled positions that the business chose not to refill because of AI. The report would also require information about the objectives of AI use, human oversight, frequency and length of use, use of AI with sensitive personal data, storage and access protections, and risk-reduction measures.

The Department of Labor would develop standard reporting forms and processes, and it could create additional reporting requirements. The Department would also prepare a public annual report using aggregate data, including analysis by sector, geography, and business size.

Noncompliance could be costly. A covered business that fails to report could face a civil penalty of up to $500 for each day it remains in violation. However, the bill provides a 90-day cure period after notice of violation, and penalties may be waived or reduced if the violation is cured to the Commissioner’s satisfaction.

If passed, this law will take effect immediately.

What Organizations in New York Should Do Now

Because both bills are still pending, there are no imminent mandatory action items. However, as legislatures in New York and across the country are working a wide range of measures to address AI, organizations would benefit from maintain a well-developed governance program, one that tracks the AI tools and technologies in use by the organization, as well as its service providers and vendors. This one step would put organizations in a strong position to quickly identify whether a new law affects them.

If you have questions about these or other laws about AI in the workplace, contact a Jackson Lewis attorney to discuss.

Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.

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