Employers may not use AI in any employment context — including recruitment, hiring, promotion, termination, discipline, training selection, or setting terms of employment — if the AI has the effect of discriminating against employees or applicants based on any protected characteristic under the Minnesota Human Rights Act. This is a disparate impact standard: the employer need not intend to discriminate; it is sufficient that the AI has a discriminatory effect. The protected characteristics are extensive and include race, color, creed, religion, national origin, sex, gender identity, marital status, public assistance status, familial status, local commission membership, disability, sexual orientation, and age. Because this is added as an unfair employment practice under existing Chapter 363A, all existing MHRA enforcement mechanisms, remedies, and defenses apply.

Employers must notify employees and applicants when AI is being used in employment decisions covered by subdivision 9(b)(1) — i.e., recruitment, hiring, promotion, renewal of employment, training selection, discharge, discipline, tenure, or terms and conditions of employment. Failure to provide this notice is itself an independent unfair employment practice. The bill does not specify the form, timing, or content of the notice beyond requiring that it be given, leaving significant implementation discretion to employers and potential future regulatory guidance.