Laws & Statutes › NY › NY-S-01854
S-01854
NY · State · USA
NY
USA
● Pending
Proposed Effective Date
2025-01-01
New York Senate Bill 1854-A — New York Workforce Stabilization Act
Requires New York employers with more than 100 employees that are not small businesses to conduct artificial intelligence impact assessments before using or applying AI, and to submit those assessments to the Department of Labor at least 30 days before implementation. Assessments must be repeated at least every two years and before any material change to the AI system, and must cover objectives, algorithms, training data, personal data use, and workforce displacement estimates. Separately imposes a 2% surcharge on a corporation's business income base if the corporation displaces 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 unemployment insurance. The bill is currently pending in the Senate Committee on Labor.
Passage Likelihood
Low
Chamber No passage
Committee No action
Majority party Yes
Bipartisan No
Prior session None
Legislative History
2025-01-14 committee referral REFERRED TO LABOR
2025-05-23 AMEND (T) AND RECOMMIT TO LABOR AMEND (T) AND RECOMMIT TO LABOR
2025-05-23 PRINT NUMBER 1854A PRINT NUMBER 1854A
2026-01-07 committee referral REFERRED TO LABOR
Mapped Requirements
H-02 Non-Discrimination & Bias Assessment R-02 Regulatory Disclosure & Submissions
Official Sources
Full Text ↗
Entry Last Reviewed
2026-04-02
AI generated
Summary

Requires New York employers with more than 100 employees that are not small businesses to conduct artificial intelligence impact assessments before using or applying AI, and to submit those assessments to the Department of Labor at least 30 days before implementation. Assessments must be repeated at least every two years and before any material change to the AI system, and must cover objectives, algorithms, training data, personal data use, and workforce displacement estimates. Separately imposes a 2% surcharge on a corporation's business income base if the corporation displaces 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 unemployment insurance. The bill is currently pending in the Senate Committee on Labor.

Enforcement & Penalties
Enforcement Authority
The Department of Labor receives and reviews impact assessments submitted by employers. The Tax Commissioner administers and collects the surcharges imposed under the tax provisions in the same manner as taxes imposed under Article 28 of the Tax Law. No private right of action is created. Enforcement is agency-initiated through the Department of Labor for the impact assessment requirement and through the Tax Commissioner for surcharge collection.
Penalties
The bill does not specify civil penalties or damages for failure to conduct or submit an impact assessment. The surcharges imposed under the tax provisions are set at 2% of the corporation's business income base. The surcharges are administered and collected under Article 28 of the Tax Law, which includes existing penalty and interest provisions for failure to pay taxes. No private damages, attorney fees, or injunctive relief provisions are included.
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 6 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 using or applying any AI system, covered employers (New York-resident businesses with more than 100 employees that are not small businesses) must conduct a formal impact assessment. The assessment must cover the AI's objectives, its ability to meet those objectives, a summary of underlying algorithms and training data, the system's use of sensitive and personal data, and critically, estimates of the number of employees already displaced and expected to be displaced by the AI. Assessments must be repeated at least every two years and before any material change that could alter the AI system's outcomes. This obligation is notable for its workforce displacement focus — the required content goes well beyond typical bias or discrimination assessments to require quantified estimates of job losses.
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 their completed AI impact assessments to the New York Department of Labor at least 30 days before implementing the AI system that is the subject of the assessment. This is a proactive submission requirement — employers cannot wait to be asked. The 30-day lead time creates a pre-implementation review window, though the bill does not expressly grant the Department authority to block implementation based on the assessment's contents.
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 · Employment
Tax Law § 186-h(1)(a)-(d)
Plain Language
Corporations that terminate or substantially reduce hours of a threshold number of employees due to AI or automation face a 2% surcharge on their business income base. The threshold scales with employer size — from 25 employees for employers with 100–250 workers, up to 250 employees for employers with over 1,000 workers. The surcharge must be reported and paid annually to the Tax Commissioner. Waivers are available for businesses experiencing labor shortages, agricultural businesses, and small businesses that need AI to remain viable. The Department of Labor must annually report to the legislature on waivers granted. This is a tax/fiscal provision rather than an AI compliance obligation.
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 · Employment
Tax Law § 186-h(2)(a)-(b)
Plain Language
Corporations that use AI for data mining — defined extremely broadly as pattern-based queries, searches, or analyses of electronic databases — face a 2% surcharge on their business income base, reported and paid annually. The data mining definition is notably expansive and could encompass nearly any analytical use of AI against structured data. This is a tax provision, not a compliance obligation in the traditional sense.
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.
Other · Employment
Tax Law § 186-h(4)
Plain Language
All surcharge revenues collected under this section must be deposited daily, kept in segregated accounts, and paid to the Department of Labor for use in worker retraining programs, workforce development programs, or the unemployment insurance fund. This is a fiscal appropriations provision that creates no compliance obligation for covered entities — it directs government handling of collected funds.
Statutory Text
Notwithstanding any provision of law to the contrary, all surcharge monies collected and received by the commissioner under this section shall be deposited daily to the credit of the comptroller with those responsible banks, banking houses or trust companies the comptroller may designate. Those deposits shall be kept separate and apart from all other monies in the possession of the comptroller. The comptroller shall require adequate security from all such depositories. All surcharge monies collected and received under this section shall be paid to the department of labor to be used, in a manner prescribed by the commissioner of the department of labor, for worker retraining programs administered by the department, workforce development programs administered by the department or to be paid to the unemployment insurance fund.
Other · Employment
Tax Law § 186-h(3)(a)-(b)
Plain Language
The surcharges are administered and collected using the same procedures as sales and use taxes under Article 28 of the Tax Law, with limited modifications. Most Article 28 exemptions do not apply to these surcharges. This is an administrative incorporation provision that establishes how the surcharges are collected but creates no independent AI compliance obligation for regulated entities.
Statutory Text
Except as otherwise provided in this section, the surcharges imposed under this section shall be administered and collected by the commissioner in a like manner as the taxes imposed by article twenty-eight of this chapter. All the provisions of article twenty-eight of this chapter, including the provisions relating to definitions, exemptions, returns, personal liability for the tax, collection of tax from the customer, payment of tax, and the administration of the taxes imposed by such article, shall apply to the surcharges imposed under the authority of this section so far as those provisions can be made applicable to the surcharges imposed by this section, with such modifications as may be necessary in order to adapt the language of those provisions to the surcharges imposed by this section. Those provisions shall apply with the same force and effect as if the language of those provisions had been set forth in full in this section, except to the extent that any of those provisions is either inconsistent with a provision of this section or is not relevant to the surcharge imposed by this section. For purposes of this section, any reference in this chapter to a tax or the taxes imposed by article twenty-eight of this chapter shall be deemed also to refer to the surcharges imposed by this section unless a different meaning is clearly required. (b) Notwithstanding the provisions of paragraph (a) of this subdivision: (1) the exemptions provided for in section eleven hundred sixteen of this chapter, other than the exemptions in paragraphs one, two and three of subdivision (a) of such section, shall not apply to the surcharges imposed by this section. (2) the credit provided in subdivision (f) of section eleven hundred thirty-seven of this chapter shall not apply to this section.