With the legislative session winding down, the New York State Senate voted to join the Assembly in passing S8706-B, a bill that requires covered businesses to disclose their use of AI technologies and the impact on their workforce. If S8706-B becomes law, it would amend the New York Labor Law to add new § 201-j and take effect immediately.
Covered Businesses
Under S8706-B, a “covered business” is a business entity doing business in New York that employs more than 50 people, or any publicly traded entity regardless of size.
What Must Be Disclosed?
This bill requires submissions of real-time data on how AI impacted hiring and the nature of AI use in the calendar year ending the preceding December 31. This report includes but is not limited to:
- Employment data and labor impact: An estimate of the number of employees displaced or hired or whose hours have decreased or increased, as well as the number of positions not filled, all “due in full or in part” to the use of AI.
- Company usage objectives: A description of the company’s objectives for using AI and information about the frequency and length of use of AI.
- Human oversight protocols and risk reduction: Information about human oversight of AI, and other measures in place for oversight, risk reduction, and protections related to use of AI.
- Sensitive data management: Information about the use of AI related to “sensitive personal data, including storage and access protections” with respect to such data.
In addition, the bill authorizes the New York State Department of Labor, which has enforcement responsibility for new § 201-j, to develop additional reporting requirements related to the hiring and business impacts of utilization of AI, as well as standard reporting forms and processes to submit the annual reports.
When Annual Disclosures Must be Submitted
Starting March 1, 2027, covered businesses must file their annual report with the Department covering the previous calendar year. The Department will use these submissions to publish an aggregate annual report providing lawmakers and the public with a sector, geographic location, and business size analysis about how AI is impacting and changing New York’s economy.
Enforcement and Penalties
The Department will issue penalties to help ensure compliance. More specifically, covered businesses that fail to submit their report by the March 1 deadline would face up to a $500 per day fine for each day they remain in violation. The legislation also includes a “good faith” cure provision. Upon receiving notice of a violation, a business has a 90-day cure period to resolve the issue. If the report is submitted within this 90-day window to the Commissioner of Labor’s satisfaction, the penalties may be waived or reduced.
Next Steps
Governor Hochul has not yet publicly taken a position on S8706-B. Bills that pass both the Senate and Assembly typically are transmitted to the governor in batches, often near calendar year-end. However, given the time the Department will need to develop the reporting forms and processes, it is possible Governor Hochul will “call up” this bill sooner. Another possibility is that she signs the bills based on a negotiated chapter amendment delaying the initial March 1, 2027, submission date.
Covered employers should evaluate their AI use in anticipation of potential reporting obligations. We will continue to monitor this bill.
