H-0262
VT · State · USA
VT
USA
● Pre-filed
Proposed Effective Date
2025-07-01
Vermont H.262 — An act relating to restricting electronic monitoring of employees and the use of employment-related automated decision systems
VT H.262 restricts employers from engaging in electronic monitoring of employees and from using automated decision systems for employment-related decisions unless specific conditions are met. Employers must satisfy purpose-limitation, necessity, least-invasiveness, and data-minimization requirements before conducting electronic monitoring, and must provide detailed written notice at least 15 days in advance. For automated decision systems, employers must conduct a written impact assessment before use, ensure human corroboration of ADS outputs before making employment decisions, and provide employees with detailed pre-use notice. The bill categorically prohibits facial, gait, voice, and emotion recognition technology in both electronic monitoring and automated decision systems. Employees have rights to access and correct data, and retaliation is prohibited. Enforcement is through Vermont's existing fair employment practices enforcement framework, including a private right of action.
Summary

VT H.262 restricts employers from engaging in electronic monitoring of employees and from using automated decision systems for employment-related decisions unless specific conditions are met. Employers must satisfy purpose-limitation, necessity, least-invasiveness, and data-minimization requirements before conducting electronic monitoring, and must provide detailed written notice at least 15 days in advance. For automated decision systems, employers must conduct a written impact assessment before use, ensure human corroboration of ADS outputs before making employment decisions, and provide employees with detailed pre-use notice. The bill categorically prohibits facial, gait, voice, and emotion recognition technology in both electronic monitoring and automated decision systems. Employees have rights to access and correct data, and retaliation is prohibited. Enforcement is through Vermont's existing fair employment practices enforcement framework, including a private right of action.

Enforcement & Penalties
Enforcement Authority
Enforcement is through 21 V.S.A. § 495b, which provides for both administrative enforcement by the Attorney General or the Human Rights Commission and a private right of action. An aggrieved employee may bring a civil action. The existing anti-retaliation provisions of 21 V.S.A. § 495(a)(8) also apply.
Penalties
Enforcement is through 21 V.S.A. § 495b, which incorporates the remedies available under Vermont's fair employment practices act, including compensatory damages, back pay, reinstatement, injunctive relief, and reasonable attorney's fees and costs. The bill does not specify a statutory minimum damages amount.
Who Is Covered
"Employer" means a person who directly or indirectly employs or exercises control over the wages, benefits, other compensation, hours, working conditions, access to work or job opportunities, or other terms and conditions of employment of an employee. For purposes of this section, "employer" includes the employer's agents, labor contractors, or other affiliates or subcontractors through which individuals perform work on behalf of the employer or otherwise provide services that are integrated into the employer's business operations.
What Is Covered
"Automated decision system" means an algorithm or computational process that is used to make or assist in making employment-related decisions, judgments, or conclusions. The term "automated decision system" includes algorithms and computational processes that are derived from machine learning, statistics, data processing, or artificial intelligence.
Compliance Obligations 12 obligations · click obligation ID to open requirement page
D-01 Automated Processing Rights & Data Controls · D-01.4 · Deployer · Employment
21 V.S.A. § 495q(b)
Plain Language
Employers may not electronically monitor employees unless the monitoring satisfies all five conditions: (1) it serves one of seven enumerated permissible purposes (e.g., essential job function, safety, compliance, periodic performance assessment); (2) the specific monitoring form is necessary and used exclusively for that purpose; (3) it is the least invasive means available; (4) it applies to the smallest number of employees, collects the minimum data, at the minimum frequency necessary; and (5) only authorized persons access the data and only for the noticed purpose and duration. This creates a multi-factor test that must be satisfied in full — failure on any prong makes the monitoring unlawful.
Statutory Text
(b) Employee monitoring restricted. An employer shall not engage in electronic monitoring of an employee unless all of the following requirements are met: (1) the employer's purpose in utilizing the electronic monitoring is to: (A) assist or allow the employee to accomplish an essential job function; (B) monitor production processes or quality; (C) ensure compliance with applicable employment or labor laws; (D) protect the health, safety, or security of the employee, clients, or the public; (E) secure the employer's physical or digital property; (F) conduct periodic assessment of employee performance; or (G) track time worked or production output for purposes of determining the employee's compensation; (2) the specific form of electronic monitoring is necessary to accomplish the purpose identified pursuant to subdivision (1) of this subsection and is used exclusively to accomplish that purpose; (3) the specific form of electronic monitoring is the least invasive means, with respect to the employee, of accomplishing the purpose identified pursuant to subdivision (1) of this subsection; (4) the specific form of electronic monitoring is used with the smallest number of employees, collects the smallest amount of data necessary to accomplish the purpose identified pursuant to subdivision (1) of this subsection, and is collected not more frequently than necessary to accomplish that purpose; and (5) the employer ensures that only authorized persons have access to any data produced through the electronic monitoring and that the data is only used for the purpose and duration that the employee has been notified of pursuant to subsection (c) of this section.
D-01 Automated Processing Rights & Data Controls · D-01.1 · Deployer · Employment
21 V.S.A. § 495q(c)(1)-(3)
Plain Language
Employers must provide each affected employee with a detailed written notice at least 15 calendar days before beginning any electronic monitoring. The notice must cover 14 specific items, including the monitoring method, purpose, data use, technologies used, who has data access, retention periods, employee rights, and complaint instructions. If monitoring tracks productivity or performance, additional disclosures about standards, measurement methods, and consequences are required. The notice must be in plain language in the employee's primary language, include a cover sheet summary, and must be updated whenever the employer makes significant changes to monitoring practices.
Statutory Text
(c) Required notice for employee monitoring. (1) At least 15 calendar days prior to commencing any form of electronic monitoring, an employer shall provide notice of the electronic monitoring to each employee who will be subject to it. The notice shall, at a minimum, include the following information: (A) the specific form of electronic monitoring; (B) a description of the intended purpose of the electronic monitoring and why the electronic monitoring is necessary to accomplish that purpose; (C) a description of how any data generated by the electronic monitoring will be used, including whether and how the data generated by the electronic monitoring will be used to inform employment-related decisions; (D) a description of the technologies that will be used to conduct the electronic monitoring; (E) a description of the specific activities, locations, communications, and job roles that will be electronically monitored; (F) the name of any person conducting electronic monitoring on the employer's behalf and any associated contract language related to the monitoring; (G) the name of any person, apart from the employer, who will have access to any data generated by the electronic monitoring and the reason why the person will have access to the data; (H) the positions within the employer that will have access to any data generated by the electronic monitoring; (I) when, where, and how frequently monitoring will occur; (J) the period of time for which any data generated by the electronic monitoring will be retained by the employer or another person and when that data will be destroyed; (K) notice of how an employee may access the data generated by the electronic monitoring and the process to correct any errors in the data; (L) a cover sheet that concisely summarizes the details contained in the notice; (M) notice of an employee's rights pursuant to this section and the judicial and administrative remedies available for redressing the wrongful use of electronic monitoring; and (N) instructions on how an employee can file a complaint against an employer for violations of this section. (2) If an employer uses electronic monitoring to track employee productivity or performance, the employer shall include the following information in the notice required by subdivision (1) of this subsection: (A) the performance or productivity standards by which employees will be assessed and how employees will be measured against those standards; (B) how performance or productivity data will be monitored and collected, including the identity of the employees subject to such monitoring and when, where, and how the monitoring and data collection will occur; and (C) any adverse consequences for failing to meet a performance or productivity standard and whether there is any bonus or incentive program associated with meeting or exceeding each standard. (3)(A) Notice of electronic monitoring provided pursuant to this section shall be written in plain, clear, and concise language and provided to each employee in the employee's primary language. (B) An employer shall provide a new, updated notice to employees if it makes any significant changes to the manner of electronic monitoring or to the way that the employer utilizes the electronic monitoring or any data generated by it.
D-01 Automated Processing Rights & Data Controls · D-01.1 · Deployer · Employment
21 V.S.A. § 495q(c)(4)
Plain Language
The 15-day advance notice requirement for electronic monitoring may be bypassed if the employer has reasonable grounds to believe an employee is engaged in illegal conduct, conduct violating others' legal rights, or creating a hostile work environment — and the monitoring is reasonably likely to produce evidence of that conduct, is narrowly tailored to identifying it, and otherwise complies with all other provisions of this section. This is an exception to the notice requirement only — all other substantive monitoring restrictions still apply.
Statutory Text
(4) Notwithstanding subdivisions (1) and (2) of this subsection, prior notice of electronic monitoring shall not be required if: (A) the employer has reasonable grounds to believe that the employee is engaged in conduct that: (i) is illegal; (ii) violates the legal rights of the employer or another employee; or (iii) creates a hostile work environment; and (B) the electronic monitoring is reasonably likely to produce evidence of the conduct, is otherwise conducted in compliance with the previsions of this section, and is narrowly tailored to the purpose of identifying the conduct.
D-01 Automated Processing Rights & Data Controls · D-01.1 · Deployer · Employment
21 V.S.A. § 495q(c)(5)
Plain Language
Employers using electronic monitoring must annually provide each employee with a list of all monitoring systems currently in use in relation to that employee, in the employee's primary language. 'Currently in use' encompasses systems actively used, used within the past 90 days, or intended for use within the next 30 days. This is a recurring disclosure obligation separate from the initial 15-day pre-monitoring notice.
Statutory Text
(5)(A) An employer that utilizes electronic monitoring shall annually provide each of its employees with a list of all electronic monitoring systems currently in use by the employer in relation to that employee. The list shall be provided in the primary language of the employee. (B) As used in this subdivision (5), "currently in use" means that the employer: (i) is currently using the system in relation to the employee; (ii) used the electronic monitoring system in relation to the employee within the past 90 days; or (iii) intends to use the electronic monitoring system in relation to the employee within the next 30 days.
D-01 Automated Processing Rights & Data Controls · D-01.5 · Deployer · Employment
21 V.S.A. § 495q(d)
Plain Language
Even where electronic monitoring satisfies the permissible-purpose and necessity requirements of subsection (b), it is categorically prohibited for nine enumerated uses. These include: monitoring off-duty employees, monitoring to suppress legal rights exercise, audio-visual monitoring of private areas (bathrooms, breakrooms, lactation rooms), tracking usage frequency of private areas, monitoring employee residences or personal vehicles (except for health/safety or data security), collecting protected-characteristic information, taking adverse action based on continuous incremental time-tracking data, and any monitoring that harms employee health, safety, or legal rights. Subdivision (7) is especially broad, covering an extensive list of protected characteristics including neurodiversity, reproductive health care, and political affiliation.
Statutory Text
(d) Prohibitions on employee monitoring. Notwithstanding the purposes for electronic monitoring set forth in subdivision (b)(1) of this section, electronic monitoring shall not be used: (1) in any manner that violates State or federal labor, employment, civil rights, or human rights laws; (2) in relation to employees who are off-duty and not performing work-related tasks, including employees on-call; (3) to identify, punish, or obtain information about employees exercising legal rights, including rights guaranteed by labor and employment laws; (4) for audio-visual monitoring of bathrooms, locker rooms, changing areas, breakrooms, smoking areas, areas designated for the expression of breast milk, employee cafeterias, lounges, or other similarly private areas; (5) to determine the frequency with which employees visit or use bathrooms, locker rooms, changing areas, breakrooms, smoking areas, employee cafeterias, lounges, or other similarly private areas; (6) for monitoring, including audio-visual monitoring, of any space within an employee's residence or personal vehicle, or a property owned or rented by the employee, unless the monitoring is necessary to ensure the employee's health and safety or to verify the security of employer or client data; (7) to obtain information about an employee's actual or perceived age, color, disability, ethnicity, genetic information, limited proficiency in the English language, national origin, race, religion, pursuit or receipt of reproductive health care, sex, sexual orientation, gender identity or expression, marital status, family responsibilities, personal appearance, immigration status, political affiliation or association, neurodiversity, veteran status, or other classification protected under State or federal law; (8) to take adverse employment action against an employee on the basis of data collected via continuous incremental time-tracking tools; or (9) in a manner that harms health or safety or violates the legal rights of any employee.
D-01 Automated Processing Rights & Data Controls · D-01.4 · Deployer · Employment
21 V.S.A. § 495q(e)
Plain Language
Employers may not require employees to install monitoring applications on personal devices, or to wear or attach monitoring devices to their person or clothing, unless the monitoring is both necessary for essential job functions and limited to the times and activities required for those functions. Location tracking must be disabled outside essential-function activity periods. Physical implantation of monitoring devices on an employee's body is categorically prohibited — no exception applies.
Statutory Text
(e) Restriction of employee monitoring through personal devices. (1) An employer shall not require an employee to install an application on a personal device for purposes of electronic monitoring or to wear a device or attach, embed, or physically implant a device on the employee's clothing that can be used for electronic monitoring, unless the electronic monitoring is: (A) necessary to accomplish the employee's essential job function; and (B) limited to only the times and activities necessary to accomplish the essential job functions. (2) Any location tracking function of an application or device shall be disabled outside of the times when the employee is engaged in activities necessary to accomplish essential job functions. (3) An employer shall not require an employee to physically implant a device on the employee's body for purposes of employee monitoring.
H-01 Human Oversight of Automated Decisions · H-01.1H-01.3H-01.6 · Deployer · EmploymentAutomated Decisionmaking
21 V.S.A. § 495q(f)(1)-(4)
Plain Language
Employers face both prohibitions and conditions when using automated decision systems (ADS) for employment-related decisions. Five categorical prohibitions apply: the ADS may not violate law, predict behavior unrelated to essential job functions, profile legal-rights exercise likelihood, predict emotions or personality, or use customer/client data as input. Health-related ADS outputs may not be used for employment decisions. Employers may never solely rely on ADS outputs — all ADS-informed decisions must be corroborated by human oversight (supervisory observations, personnel records, coworker consultations), the employer must have completed an impact assessment, and the employer must have provided the employee with a detailed pre-use notice covering 10 specified items including system logic, data sources, output types, developer identity, and employee rights.
Statutory Text
(f) Restrictions on use of automated decision systems. (1) An employer shall not use an automated decision system in a manner that: (A) violates or results in a violation of State or federal law; (B) makes predictions about an employee's behavior that are unrelated to the employee's essential job functions; (C) identifies, profiles, or predicts the likelihood that an employee will exercise the employee's legal rights; (D) makes predictions about an employee's emotions, personality, or other sentiments; or (E) use customer or client data, including customer or client reviews and feedback, as an input of the automated decision system. (2)(A) An employer shall not solely rely on outputs from an automated decision system when making employment-related decisions. (B) An employer may utilize an automated decision system in making employment-related decisions if: (i) the automated decision system outputs considered in making the employment-related decision are corroborated by human oversight of the employee, including supervisory or managerial observations and documentation of the employee's work, personnel records, and consultations with the employee's coworkers; (ii) the employer has conducted an impact assessment of the automated decision system pursuant to subsection (g) of this section; and (iii) the employer is in compliance with the notice requirements of subdivision (4) of this subsection (f). (3) An employer shall not use any automated decision system outputs regarding an employee's physical or mental health in relation to an employment-related decision. (4) Prior to using an automated decision system to make an employment-related decision about an employee, the employer must provide the employee with a notice that complies with subdivision (c)(3)(A) of this section and, at a minimum, contains the following information: (A) a plain language explanation of the nature, purpose, and scope for which the automated decision system will be used, including the specific employment-related decisions potentially affected; (B) the logic used in the automated decision system, including the key parameters that affect the output of the automated decision system; (C) the specific category and sources of employee input data that the automated decision system will use, including a specific description of any data collected through electronic monitoring; (D) any performance metrics the employer will consider using with the automated decision system; (E) the type of outputs the automated decision system will produce; (F) the individuals or entities that developed the automated decision system; (G) the individual or entities that will operate, monitor, and interpret the results of the automated decision system; (H) information about how an employee can access the results of the most recent impact assessment of the automated decision system; (I) a description of an employee's rights, pursuant to subsection (j) of this section, to access information about the employer's use of the automated decision system and to correct data used by the automated decision system; and (J) a statement that employees are protected from retaliation for exercising the rights described in the notice.
H-02 Non-Discrimination & Bias Assessment · H-02.3 · Deployer · EmploymentAutomated Decisionmaking
21 V.S.A. § 495q(g)
Plain Language
Before using any automated decision system, employers must create a written impact assessment covering eight mandatory elements: system description and purpose, data used, outputs and decision types, necessity assessment, validity and reliability evaluation per social science standards, a detailed risk assessment covering discrimination across protected characteristics, legal rights chilling, health/safety/dignity harms, privacy risks, and economic impacts — plus mitigation measures and methodology. The assessment must be provided to employees upon request, updated whenever a significant system change occurs, and a single assessment may cover comparable systems. This is a pre-deployment requirement — the employer cannot begin using the ADS until the impact assessment is completed.
Statutory Text
(g) Impact assessment of automated decision systems. (1) Prior to utilizing an automated decision system, an employer shall create a written impact assessment of the system that includes, at a minimum: (A) a detailed description of the automated decision system and its purpose; (B) a description of the data utilized by the system; (C) a description of the outputs produced by the system and the types of employment-related decisions in which those outputs may be utilized; (D) an assessment of the necessity for the system, including reasons for utilizing the system to supplement nonautomated means of decision making; (E) a detailed assessment of the system's validity and reliability in accordance with contemporary social science standards and a description of any metrics used to evaluate the performance and known limitations of the automated decision system; (F) a detailed assessment of the potential risks of utilizing the system, including the risk of: (i) discrimination against employees on the basis of race, color, religion, national origin, sex, sexual orientation, gender identity, ancestry, place of birth, age, crime victim status, or physical or mental condition; (ii) violating employees' legal rights or chilling employees' exercise of legal rights; (iii) directly or indirectly harming employees' physical health, mental health, safety, sense of well-being, dignity, or autonomy; (iv) harm to employee privacy, including through potential security breaches or inadvertent disclosure of information; and (v) negative economic and material impacts to employees, including potential effects on compensation, benefits, work conditions, evaluations, advancement, and work opportunities; (G) a detailed summary of measures taken by the employer to address or mitigate the risks identified pursuant to subdivision (E) of this subdivision (1); and (H) a description of any methodology used in preparing the assessment. (2) An employer shall provide a copy of the assessment prepared pursuant to subdivision (1) of this subsection to an employee upon request. (3) An employer shall update the assessment required pursuant to this subsection any time a significant change or update is made to the automated decision system. (4) A single impact assessment may address a comparable set of automated decision systems deployed by an employer.
S-02 Prohibited Conduct & Output Restrictions · S-02.2 · Deployer · EmploymentBiometrics
21 V.S.A. § 495q(h)
Plain Language
Employers are categorically prohibited from incorporating facial recognition, gait recognition, voice recognition, or emotion recognition technology into either electronic monitoring systems or automated decision systems used for employment purposes. There are no exceptions to this prohibition — it applies regardless of the employer's purpose, the employee's role, or any other condition.
Statutory Text
(h) Prohibitions on facial, gait, voice, and emotion recognition technology. Electronic monitoring and automated decision systems shall not incorporate any form of facial, gait, voice, or emotion recognition technology.
Other · Employment
21 V.S.A. § 495q(i)
Plain Language
Employers and all third parties who develop, operate, maintain, or otherwise handle data from electronic monitoring or automated decision systems must implement reasonable security measures to protect employee personal information from unauthorized access, destruction, use, modification, or disclosure. Upon contract termination, third parties must return all data and ADS outputs to the employer and destroy all copies in their possession. This applies to vendors, contractors, and data processors — not just the employer.
Statutory Text
(i) Protection of employee privacy. (1) An employer; any person that develops, operates, or maintains electronic monitoring or an automated decision system on behalf of an employer; and any person who collects, stores, analyzes, interprets, disseminates, or otherwise uses data produced or utilized by electronic monitoring or an automated decision system shall implement reasonable security procedures and practices appropriate to the nature of the data to protect employees' personal information from unauthorized or illegal access, destruction, use, modification, or disclosure. (2) Any person that develops, operates, or maintains electronic monitoring or an automated decision system on behalf of an employer and any person who collects, stores, analyzes, interprets, disseminates, or otherwise uses data produced or utilized by electronic monitoring or an automated decision system shall, upon termination of the contract with the employer: (A) return all data and automated decision system outputs to the employer; and (B) destroy all data and automated decision system outputs in the person's possession.
D-01 Automated Processing Rights & Data Controls · D-01.1D-01.2 · Deployer · Employment
21 V.S.A. § 495q(j)
Plain Language
Employees have the right to request and receive, within seven days, access to any data about them that was produced or used by electronic monitoring or an automated decision system. Employees may also request correction of errors, and within seven days the employer must either correct the data and explain what was done, or explain why the data was not corrected and what verification steps were taken. Both responses must be in plain, clear, concise language. The seven-day turnaround is unusually fast compared to most state data access frameworks.
Statutory Text
(j) Employee right to access and correct data. (1) Within seven days of receiving a request, an employer shall provide an employee with access to any data that relates to the employee that was produced or utilized by electronic monitoring or an automated decision system used by the employer. (2) Within seven days of receiving a request to correct potential errors identified by an employee, an employer shall: (A) correct the erroneous information or data and provide the employee with a notice that complies with subdivision (c)(3)(A) of this section, explaining the steps taken by the employer; or (B) provide the employee with a notice explaining that the employer has not corrected the information or data and describing the steps the employer has taken to verify the accuracy of the disputed information or data.
G-03 Whistleblower & Anti-Retaliation Protections · G-03.3 · Deployer · Employment
21 V.S.A. § 495q(k)
Plain Language
Employers may not discharge or retaliate in any manner against employees who exercise or attempt to exercise their rights under this section — including rights to receive notice, access and correct data, request impact assessments, or file complaints. The existing anti-retaliation provisions of Vermont's fair employment practices act (21 V.S.A. § 495(a)(8)) apply. This covers not only successful exercise of rights but also attempts to exercise them.
Statutory Text
(k) Retaliation prohibited. An employer shall not discharge or in any other manner retaliate against an employee who exercises or attempts to exercise the employee's rights under this section. The provisions against retaliation set forth in subdivision 495(a)(8) of this subchapter shall apply to this section.