Regulon.AI — NY-A-05429 · NY A 5429-A (Workforce Stabilization Act)

Summary

Requires New York employers with more than 100 employees that are not small businesses to conduct impact assessments before using any artificial intelligence, and to submit those assessments to the Department of Labor at least 30 days before implementation. Impact assessments must be updated at least biennially and upon material changes. Separately, imposes a 2% surcharge on the business income base of corporations that displace a threshold number of employees through AI or automation, and a separate 2% surcharge on corporations that use AI for data mining. Surcharge revenues are directed to worker retraining, workforce development, and the unemployment insurance fund. The Commissioner may waive the displacement surcharge for businesses experiencing labor shortages, agricultural businesses, or small businesses requiring AI to remain economically viable.

Enforcement & Penalties

Enforcement Authority

The Department of Labor receives and reviews impact assessments submitted by employers. The surcharges under the tax law are administered and collected by the Commissioner of Taxation and Finance in the same manner as taxes imposed by Article 28 of the Tax Law. No private right of action is created. Enforcement is agency-initiated through administrative review and tax collection mechanisms.

Penalties

The bill does not specify civil penalties or damages for failure to conduct or submit impact assessments. The surcharges are imposed at a rate of 2% of the corporation's business income base. Tax administration provisions of Article 28 of the Tax Law apply to surcharge collection, including provisions relating to payment, personal liability, and collection.

Who Is Covered

"Employer" means a business that: (i) is resident in the state, (ii) is not a small business, and (iii) employs more than one hundred people.

"Small business" means a business that: (i) is resident in the state, (ii) is independently owned and operated, (iii) is not dominant in its field, and (iv) employs one hundred or less people.

Compliance Obligations 4 obligations · click obligation ID to open requirement page

H-02 Non-Discrimination & Bias Assessment · H-02.3 · Deployer · Automated DecisionmakingEmployment

Labor Law § 201-j(1)(a)-(f)

Plain Language

Before deploying any AI system, employers with more than 100 employees (that are not small businesses) must complete a written impact assessment covering the AI system's objectives, its ability to meet those objectives, its underlying algorithms and training data, its use of sensitive and personal data, and estimates of both past and future employee displacement. This assessment must be completed before any use of AI, updated at least every two years, and re-conducted before any material change to the AI system that could alter its outcomes or effects. The assessment is a precondition to use — employers may not use AI at all without it.

Statutory Text

No employer shall utilize or apply any artificial intelligence unless the employer, or an entity acting on behalf of such employer, shall have conducted an impact assessment for the application and use of such artificial intelligence. Following the first impact assessment, an impact assessment shall be conducted at least once every two years. An impact assessment shall be conducted prior to any material change to the artificial intelligence that may change the outcome or effect of such system. Such impact assessments shall include: (a) a description of the objectives of the artificial intelligence; (b) an evaluation of the ability of the artificial intelligence to achieve its stated objectives; (c) a description and evaluation of the objectives and development of the artificial intelligence including: (i) a summary of the underlying algorithms, computational modes, and tools that are used within the artificial intelligence; and (ii) the design and training data used to develop the artificial intelligence process; (d) the extent to which the deployment and use of the artificial intelligence requires input of sensitive and personal data, how that data is used and stored, and any control users may have over their data; (e) an estimate of the number of employees already displaced due to artificial intelligence; and (f) an estimate of the number of employees expected to be displaced or otherwise affected due to the increased use of artificial intelligence in the workplace.

R-02 Regulatory Disclosure & Submissions · R-02.1 · Deployer · Automated DecisionmakingEmployment

Labor Law § 201-j(2)

Plain Language

Employers must submit each completed impact assessment to the Department of Labor at least 30 days before implementing the AI system covered by the assessment. This is a proactive submission requirement — the employer cannot wait to be asked. The 30-day lead time creates a de facto pre-deployment review window for the Department, though the statute does not explicitly grant the Department authority to block implementation.

Statutory Text

Any impact assessment conducted pursuant to this subdivision shall be submitted to the department at least thirty days prior to the implementation of the artificial intelligence that is the subject of such assessment.

Other · Automated DecisionmakingEmployment

Tax Law § 186-h(1)(a)-(d)

Plain Language

Corporations that terminate or substantially reduce the hours of a threshold number of employees due to AI, automation, or robotic systems face a 2% surcharge on their business income base, reported and paid annually. The threshold scales with employer size: 25+ employees for employers with 100–250 workers, up to 250+ employees for employers with 1,001+ workers. A waiver process exists for businesses experiencing labor shortages, agricultural businesses needing automation, and small businesses requiring AI to remain viable. The Department of Labor must annually report to the legislature on waivers granted and their justifications, with the report made publicly available.

Statutory Text

A surcharge on corporations that terminate the employment or substantially reduce the hours of at least the threshold number of employees pursuant to this subdivision due to any system or process that uses algorithms, computational models, artificial intelligence techniques, robotic hardware, or a combination thereof, to automate, support, or replace human labor is imposed at the rate of two percent of the corporation's business income base. The threshold number of employees shall be: (i) for employers with between one hundred and two hundred fifty employees, twenty-five or more employees; (ii) for employers with between two hundred fifty-one and five hundred employees, fifty or more employees; (iii) for employers with between five hundred one and one thousand employees, one hundred or more employees; and (iv) for employers with one thousand one or more employees, two hundred fifty or more employees. (b) The surcharge shall be reported and paid to the commissioner no less frequently than on an annual basis. The payments shall be accompanied by a return in the form and containing the information the commissioner may prescribe. (c) The commissioner, in consultation with the department of labor, may waive the surcharge set forth by paragraph (a) of this subdivision for an eligible corporation. The commissioner, in consultation with the department of labor, shall establish a process whereby eligible corporations may apply to have the surcharge waived. For the purposes of this section, an eligible corporation shall be: (i) A business that is found by the department of labor to be experiencing or anticipating a labor shortage; (ii) A business that demonstrates that it requires the use of algorithms, computational models, artificial intelligence techniques, robotic hardware, or a combination thereof, to protect or improve the production of agricultural commodities within the state; or (iii) A small business, as defined by section one hundred thirty-one of the economic development law, that demonstrates that it requires the use of algorithms, computational models, artificial intelligence techniques, robotic hardware, or a combination thereof, to remain economically viable. (d) The department of labor shall annually report to the legislature on the number of waivers that it has granted pursuant to paragraph (c) of this subdivision, in the preceding year and the justification for why each waiver was granted. Such report shall be sent to the temporary president of the senate, the minority leader of the senate, the speaker of the assembly, and the minority leader of the assembly and shall be made available to the public on the website of the department.

Other · Automated DecisionmakingEmployment

Tax Law § 186-h(2)(a)-(b)

Plain Language

Corporations that use AI for data mining — defined as pattern-based queries, searches, or other analyses of electronic databases — face a separate 2% surcharge on their business income base, reported and paid annually. The definition of 'data mining' is exceptionally broad and could encompass virtually any AI system that queries or analyzes a database using pattern recognition, which is a fundamental operation of most AI applications. This surcharge is independent of and cumulative with the worker displacement surcharge — a corporation could owe both.

Statutory Text

A surcharge on corporations that use artificial intelligence for data mining is imposed at the rate of two percent of the corporation's business income base. For the purposes of this subdivision, the term "data mining" shall mean a process involving pattern-based queries, searches, or other analyses of one or more electronic databases. (b) The surcharge shall be reported and paid to the commissioner no less frequently than on an annual basis. Surcharge payments shall be accompanied by a return in the form and containing the information the commissioner may prescribe.