WHAT THIS BILL REGULATES · 2 REQUIREMENT TYPES
How Is This Bill Enforced
Verbatim statutory text on the left; plain-language analysis and a per-section checklist on the right. Numbered markers cross-link to the matching checklist row.
(1) "AlgorithmAlgorithm"Algorithm" means a computerized procedure consisting of a set of steps used to accomplish a determined task.Labor Code § 95.001(1)" means a computerized procedure consisting of a set of steps used to accomplish a determined task.
(2) "ApplicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2)" means a person applying for a job offered by an employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5).
(3) "Artificial intelligence systemArtificial intelligence system"Artificial intelligence system" means a system of machine learning and related technologies that use data to train statistical models for the purpose of enabling computer systems to perform tasks normally associated with human intelligence or perception, such as computer vision, speech or natural language processing, and content generation.Labor Code § 95.001(3)" means a system of machine learning and related technologies that use data to train statistical models for the purpose of enabling computer systems to perform tasks normally associated with human intelligence or perception, such as computer vision, speech or natural language processing, and content generation.
(4) "Automated employment decision toolAutomated employment decision tool"Automated employment decision tool" means a computational process or software application that uses algorithms, machine learning, statistical modeling, data analytics, or an artificial intelligence system to assess an applicant's fitness for a position.Labor Code § 95.001(4)" means a computational process or software application that uses algorithmsAlgorithm"Algorithm" means a computerized procedure consisting of a set of steps used to accomplish a determined task.Labor Code § 95.001(1), machine learning, statistical modeling, data analytics, or an artificial intelligence systemArtificial intelligence system"Artificial intelligence system" means a system of machine learning and related technologies that use data to train statistical models for the purpose of enabling computer systems to perform tasks normally associated with human intelligence or perception, such as computer vision, speech or natural language processing, and content generation.Labor Code § 95.001(3) to assess an applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2)'s fitness for a position.
(5) "EmployerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5)" has the meaning assigned by Section 61.001.
This section establishes the defined terms for the chapter. The key operative definition is automated employment decision tool, which covers any computational process or software application that uses algorithms, machine learning, statistical modeling, data analytics, or an AI system to assess an applicant's fitness for a position. The definition is broad — it does not require machine learning or AI specifically, capturing rule-based algorithmic screening tools as well. Employer is defined by cross-reference to Section 61.001 of the Labor Code.
(a) An employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5) may not use or deploy, or authorize a third party to use or deploy, an automated employment decision toolAutomated employment decision tool"Automated employment decision tool" means a computational process or software application that uses algorithms, machine learning, statistical modeling, data analytics, or an artificial intelligence system to assess an applicant's fitness for a position.Labor Code § 95.001(4) in violation of this chapter or a rule adopted under this chapter.
(b) 1 It is a violation of this chapter for an employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5) to use an automated employment decision toolAutomated employment decision tool"Automated employment decision tool" means a computational process or software application that uses algorithms, machine learning, statistical modeling, data analytics, or an artificial intelligence system to assess an applicant's fitness for a position.Labor Code § 95.001(4) that includes, as a factor in the assessment of fitness for purposes of recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment, status in a protected class under state or federal law, or the residential zip code of the applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2).
Section 95.002 contains two distinct prohibitions. Subsection (a) is a general compliance clause prohibiting employer use of an AEDT in violation of the chapter or its implementing rules — including use by authorized third parties. Subsection (b) establishes the core substantive prohibition: employers may not use an AEDT that factors in an applicant's protected-class status under state or federal law, or the applicant's residential zip code, as part of the fitness assessment for recruitment, hiring, promotion, renewal, training, discharge, discipline, tenure, or other employment terms and conditions.
The zip code prohibition is notable — it functions as a proxy-variable restriction, targeting a commonly identified socioeconomic and racial proxy in employment screening.
(1)–(3) 2 An employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5) may not use an automated employment decision toolAutomated employment decision tool"Automated employment decision tool" means a computational process or software application that uses algorithms, machine learning, statistical modeling, data analytics, or an artificial intelligence system to assess an applicant's fitness for a position.Labor Code § 95.001(4) in regard to an applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2) unless the employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5): (1) notifies the applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2) that an automated employment decision toolAutomated employment decision tool"Automated employment decision tool" means a computational process or software application that uses algorithms, machine learning, statistical modeling, data analytics, or an artificial intelligence system to assess an applicant's fitness for a position.Labor Code § 95.001(4) may be used to assess the applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2)'s fitness for the position; (2) provides the applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2) with information describing how the automated employment decision toolAutomated employment decision tool"Automated employment decision tool" means a computational process or software application that uses algorithms, machine learning, statistical modeling, data analytics, or an artificial intelligence system to assess an applicant's fitness for a position.Labor Code § 95.001(4) will be used to assess the applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2)'s fitness for the position, including what characteristics may be evaluated for that purpose; and (3) before using the automated employment decision toolAutomated employment decision tool"Automated employment decision tool" means a computational process or software application that uses algorithms, machine learning, statistical modeling, data analytics, or an artificial intelligence system to assess an applicant's fitness for a position.Labor Code § 95.001(4), obtains the applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2)'s written consent for that use.
Section 95.003 establishes a three-part notice-and-consent requirement that must be satisfied before an employer may use an AEDT against any applicant. The employer must (1) notify the applicant that an AEDT may be used, (2) describe how the tool will be used and what characteristics it evaluates, and (3) obtain the applicant's written consent. The written consent requirement is more protective than comparable statutes in other jurisdictions — for example, NYC Local Law 144 requires only notice (not consent). This effectively gives applicants veto power over automated screening, though the practical enforceability of that right in competitive hiring contexts remains an open question.
3 An employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5) may not share an assessment of an applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2) made by an automated employment decision toolAutomated employment decision tool"Automated employment decision tool" means a computational process or software application that uses algorithms, machine learning, statistical modeling, data analytics, or an artificial intelligence system to assess an applicant's fitness for a position.Labor Code § 95.001(4) authorized under this chapter with any person other than a person whose knowledge and skill is necessary in order to ensure the tool is correctly processing the applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2)'s data.
Section 95.004 imposes a strict data-sharing restriction: employers may not share an applicant's AEDT assessment with anyone other than persons whose knowledge and skill are necessary to ensure the tool is correctly processing the applicant's data. This effectively limits sharing to technical personnel responsible for tool operation and quality assurance, excluding hiring managers, other employers, or data brokers.
(a)(1)–(2) 4 Not later than the 30th day after the date an employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5) uses an automated employment decision toolAutomated employment decision tool"Automated employment decision tool" means a computational process or software application that uses algorithms, machine learning, statistical modeling, data analytics, or an artificial intelligence system to assess an applicant's fitness for a position.Labor Code § 95.001(4) to assess an applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2)'s fitness for a position as authorized under this chapter, an employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5) must: (1) make all reasonable efforts to destroy any hard copy and erase any electronic data file of the assessment; and (2) instruct any other person with whom the employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5) shared the assessment under Section 95.004 to make all reasonable efforts to destroy any hard copy and erase any electronic data file of the assessment.
(b) 4 A person who is instructed by an employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5) to destroy an assessment under Subsection (a)(2) shall, as soon as practicable, make all reasonable efforts to destroy any hard copy and erase any electronic data file of the assessment.
Section 95.005 imposes a 30-day data destruction obligation. Within 30 days of using an AEDT to assess an applicant, the employer must make all reasonable efforts to destroy hard copies and erase electronic files of the assessment. The employer must also instruct any person with whom the assessment was shared under Section 95.004 to do the same. Recipients of such instructions must comply as soon as practicable. This is an unusually aggressive data-retention ceiling — most employment statutes require retention of hiring records for at least one year to preserve evidence for discrimination claims.
(a) An applicantApplicant"Applicant" means a person applying for a job offered by an employer.Labor Code § 95.001(2) who has reason to believe that an employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5) has violated this chapter or a rule adopted under this chapter may file a complaint with the commission.
(b) On receipt of a complaint under this section, the commission shall investigate and dispose of the complaint in the manner prescribed by Subchapter F, Chapter 21, for a complaint of an unlawful employment practice under that chapter.
(c) The commission shall assess an administrative penalty in an amount that is not less than $2,500 and not more than $7,500 against an employerEmployer"Employer" has the meaning assigned by Section 61.001.Labor Code § 95.001(5) for each violation of this chapter or a rule adopted under this chapter.
Section 95.006 establishes the enforcement mechanism. Applicants who believe an employer has violated the chapter may file a complaint with the Texas Workforce Commission (TWC), which investigates and disposes of the complaint under the same procedures used for unlawful employment practice complaints under Subchapter F, Chapter 21 of the Labor Code. The commission must assess an administrative penalty of $2,500 to $7,500 per violation. No private right of action is created — enforcement runs exclusively through the TWC administrative complaint process.
The commission shall adopt rules for the administration of this chapter.
Section 95.007 grants the Texas Workforce Commission rulemaking authority to administer the chapter. This is a standard delegation provision that does not itself impose a compliance obligation on employers but authorizes the commission to adopt implementing rules that may create additional requirements.