Regulon — NJ-S-1840 · NJ S 1840 (Responsible AI & Workforce Protection)

Summary

NJ S 1840 creates a comprehensive framework addressing AI workforce displacement, environmental impact of AI infrastructure, and high-risk AI governance. It establishes the AI Horizon Fund, financed by a 5% assessment on gross AI revenue from AI infrastructure entities and supplemental contributions from employers whose AI deployments cause layoffs. The Department of Labor and Workforce Development must maintain at-risk sector lists, develop retraining programs, provide enhanced unemployment benefits for AI-displaced workers, and require employers with 100+ employees to file AI Impact Disclosures when AI deployments result in layoffs. AI infrastructure entities must conduct environmental impact assessments and enter community benefit agreements. High-risk AI systems must undergo algorithmic impact assessments before deployment. The Attorney General is empowered to investigate AI-driven discrimination and unreasonable AI workplace surveillance. Violations of environmental and high-risk AI provisions carry civil penalties of $1,000 to $2,000.

Enforcement & Penalties

Enforcement Authority

Department of Labor and Workforce Development and the Attorney General enforce sections 6 and 7 via summary civil proceedings under the Penalty Enforcement Law of 1999. The Attorney General separately investigates and enforces complaints related to AI-driven discrimination, unreasonable AI workplace surveillance, and civil rights violations under the Law Against Discrimination and the New Jersey Civil Rights Act. No private right of action is created by the bill itself.

Penalties

Civil penalty of not less than $1,000 for a first violation and not more than $2,000 for a second or subsequent violation of sections 6 or 7, collected in a civil action by summary proceeding. Penalties for AI-driven discrimination and civil rights violations are enforced under the Law Against Discrimination (C.10:5-1 et seq.) and the New Jersey Civil Rights Act (C.10:6-1 et seq.), which have their own separate penalty and remedy structures.

Who Is Covered

"AI infrastructure entity" means any company operating large-scale AI computing facilities within this State.

What Is Covered

"Artificial intelligence" or "AI" means the development of software and hardware and the end-use application of technologies that are able to perform tasks normally requiring human intelligence, including, but not limited to, visual perception, speech recognition, decision-making, translation between languages, and generative artificial intelligence, which generates new content in response to user inputs of data.

"High-risk AI system" means any AI system used in employment, housing, healthcare, education, criminal justice, or public services.

Compliance Obligations 8 obligations · click obligation ID to open requirement page

Other · Developer · Foundation Model

Section 4(a)-(b)

Plain Language

AI infrastructure entities operating in New Jersey must contribute 5% of their gross revenue from AI operations to the AI Horizon Fund. The fund supports workforce retraining, clean energy upgrades for AI infrastructure, and community resilience initiatives. This is a mandatory revenue assessment — not a voluntary contribution — and constitutes a continuing financial obligation tied to operating AI computing facilities in the state.

Statutory Text

a. There is established in the Department of Labor and Workforce Development and administered by the New Jersey Economic Development Authority a dedicated, nonlapsing, revolving to be known as the AI Horizon Fund, to be managed and invested by the State Treasurer to: (1) support workforce retraining and apprenticeship programs; (2) invest in clean energy upgrades for AI infrastructure; and (3) fund community resilience initiatives in areas impacted by AI-related development. b. The fund shall be credited with: (1) contributions from AI infrastructure entities operating in New Jersey, based on a five percent assessment of gross revenue from AI operations; (2) penalties and fees collected by the department pursuant to section 8 of this act; (3) moneys as are appropriated by the Legislature; and (4) any return on investment of moneys deposited in the fund.

Other · Government · Employment

Section 5(a)(1)-(5)

Plain Language

This provision directs the Department of Labor and Workforce Development to establish AI workforce protection infrastructure: maintaining a publicly available list of at-risk sectors, partnering with unions and community colleges on retraining programs, providing 13 additional weeks of unemployment benefits for AI-displaced workers, and creating job placement programs. These are government program mandates — they create no direct compliance obligation on private employers or AI entities.

Statutory Text

a. The Department of Labor and Workforce Development shall: (1) establish an AI Worker Protection and Economic Adjustment section on its website. That section shall include a list of sectors at risk for AI-driven displacement. The list shall be updated at least quarterly; (2) engage with registered unions to expand training programs specific to job roles within those organizations; (3) engage with community colleges to develop curricula around AI certification; (4) based on the list of at-risk sectors referenced in paragraph (1) of this subsection, provide enhanced unemployment benefits of 13 additional weeks for workers displaced by AI; (5) based on the list of at-risk sectors referenced in paragraph (1) of this subsection, develop specific job placement programs for workers displaced by AI;

R-02 Regulatory Disclosure & Submissions · R-02.1 · Deployer · Employment

Section 5(a)(6)-(7), Section 5(b)

Plain Language

Employers with 100 or more employees that deploy AI systems resulting in layoffs must file an AI Impact Disclosure with the Department of Labor and Workforce Development. The disclosure must include the AI deployment date, the layoff date, and the number of displaced workers. In addition, these employers must make supplemental contributions to the AI Horizon Fund based on the number of AI-attributable layoffs, per a schedule the department will develop. Employers with fewer than 100 employees are exempt from both the disclosure and supplemental contribution obligations.

Statutory Text

(6) develop an AI Impact Disclosure that employers deploying AI systems that results in layoffs shall file with the department. This disclosure shall contain, at a minimum, the date on which the AI tool that resulted in layoffs was deployed, the date of layoffs, and the number of workers displaced by the AI tool deployment; and (7) develop a supplemental contribution schedule to the AI Horizon Fund based on the number of layoffs attributable to AI and develop a mechanism for assessment and payment of these assessments. b. The disclosure statements and supplemental contributions specified in paragraphs (6) and (7) of subsection a. of this section shall only be applicable to firms which have 100 or more employees.

Other · Developer · Foundation Model

Section 6(a)-(c)

Plain Language

AI infrastructure entities must, at initial deployment and annually, conduct environmental impact assessments (and additional assessments for capacity expansions), submit annual energy/water/carbon reports, and enter into community benefit agreements with affected municipalities. All assessments and agreements must be filed with the Department of Labor and Workforce Development. These are ongoing, recurring obligations — not one-time events. Violations are subject to the civil penalties in Section 8.

Statutory Text

Each AI infrastructure entity shall, at the time of initial deployment and annually thereafter, in a manner determined by the department: a. Conduct an environmental impact assessment and provide an additional environmental impact assessment with any capacity expansion, and file the assessment with the department; b. Submit annual reports to the department detailing energy consumption, water usage, and carbon emissions; and c. Enter into community benefit agreements with affected municipalities, and file the agreement with the department.

H-02 Non-Discrimination & Bias Assessment · H-02.3 · DeployerGovernment · Automated Decisionmaking

Section 7(a)

Plain Language

Any AI system used in employment, housing, healthcare, education, criminal justice, or public services must undergo an algorithmic impact assessment before deployment. Unusually, the assessment is performed by the state Office of Information Technology rather than by the developer or deployer themselves. The methodology is left to OIT to determine. This is a pre-deployment gate — the AI system may not be deployed until the assessment is complete. Violations are subject to civil penalties under Section 8.

Statutory Text

High-risk AI systems implemented in New Jersey shall: a. Undergo algorithmic impact assessments prior to deployment. The Office of Information Technology in, but not of, the Department of the Treasury, shall perform the impact assessments, in a manner to be determined by the Office of Information Technology.

Other · Automated Decisionmaking

Section 7(b)

Plain Language

High-risk AI systems must comply with existing New Jersey ethical use and transparency requirements under P.L.2023, c.266. This is a cross-reference to pre-existing law and creates no new compliance obligation of its own — it confirms that the existing requirements apply to high-risk AI systems as defined in this act.

Statutory Text

b. Be subject to ethical use and transparency requirements pursuant to P.L.2023, c.266 (C.56:8-166.4 et seq.).

Other · Automated DecisionmakingFoundation Model

Section 8

Plain Language

This provision sets the penalty structure for violations of the environmental impact assessment (Section 6) and high-risk AI impact assessment (Section 7) requirements. It creates no independent compliance obligation — it is the enforcement mechanism for other provisions. Penalties are $1,000 minimum for a first violation and up to $2,000 for subsequent violations, collected by the Department of Labor or the Attorney General through summary civil proceedings.

Statutory Text

Any person violating any of the provisions of sections 6 or 7 of this act shall be liable to a penalty of not less than $1,000 for a first violation and not more than $2,000 for a second or subsequent violation, to be collected in a civil action by a summary proceeding brought by the department or the Attorney General under the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).

H-02 Non-Discrimination & Bias Assessment · H-02.1 · Deployer · Automated DecisionmakingEmployment

Section 9(a)-(b)

Plain Language

The Attorney General may investigate and enforce complaints about AI-driven discrimination (AI outputs exhibiting bias based on protected characteristics) and unreasonable AI workplace surveillance (AI-powered monitoring of employee behavior, computer usage, and physical movements). Enforcement piggybacks on the existing Law Against Discrimination and New Jersey Civil Rights Act penalty frameworks. While this provision is largely an enforcement mechanism, it creates a substantive prohibition against AI-driven discrimination and unreasonable AI workplace surveillance — entities deploying AI systems must ensure their systems do not produce discriminatory outputs or conduct unreasonable employee surveillance. The 'unreasonable' standard for workplace surveillance is undefined and will likely be developed through AG enforcement actions.

Statutory Text

a. The Office of the Attorney General shall investigate complaints related to AI-driven discrimination, unreasonable AI workplace surveillance, and claims of violations of civil rights protections related to AI. The Attorney General shall enforce penalties pursuant to the "Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.), and the "New Jersey Civil Rights Act," P.L.2004, c.143 (C.10:6-1 et seq.) for violations of this section. b. As used in this section: "AI-driven discrimination" means output resulting from AI systems that exhibit biases against individuals based on age, race, religion, or other protected classes. "AI workplace surveillance" means the use of AI to monitor and analyze employee behavior and performance through the use of technology tools that track employee activities including computer usage and physical movements.