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New York’s AI transparency push: What employers need to know about AB 3411B and AB 9581B

7/14/26

By: Kyle Hogan

New York employers using or considering the use of artificial intelligence (“AI”) should monitor two pending state bills. AB 3411B would amend New York’s General Business Law to require notices on “generative artificial intelligence systems,” while AB 9581B would amend New York’s Labor Law to require certain businesses to submit annual reports to the New York Department of Labor on AI’s impact on hiring and workforce decisions. If enacted, the bills could expand employer notice, reporting, and transparency obligations regarding workplace AI use.

AB 3411B:

AB 3411B has passed both chambers but has not yet been delivered to Governor Hochul. If signed, it would take effect 90 days later. The bill applies to owners, licensees, or operators of generative AI systems, which are defined as “class of artificial intelligence models that are self-supervised and emulate the structure and characteristics of input data to generate derived synthetic content, including, but not limited to, images, videos, audio, text, and other digital content.” The bill would require users of generative AI systems to clearly and conspicuously display a notice that outputs may be inaccurate. Employers that develop, license, operate, or deploy such systems may need to confirm their user interfaces include this notice.

The bill broadly defines AI as a machine-based system that can make predictions, recommendations, or decisions using human- or machine-based inputs. This may include chatbots, large language models, customer service systems, computer vision tools, and document-drafting technologies. Failure to provide the required notice could result in a $1,000 fine per violation, with each affected user treated as a separate violation

AB 9581B:

AB 9581B also has passed both chambers but has not yet been signed. Once signed, it would take effect immediately. AB 9581B applies to “covered businesses,” meaning entities doing business in New York that either employ more than 50 people or are publicly traded. Covered businesses would have to report annually by March 1 to the New York Department of Labor on AI’s impact on hiring and workforce decisions, including estimates of employees displaced or reduced in hours, employees hired or increased in hours, and positions left unfilled due to AI use.

The report would also describe the objectives of the AI use, human oversight, and the frequency and duration of use. The Department of Labor would publish an annual aggregate report and could impose additional reporting requirements. If enacted, the bill would impose substantial penalties for noncompliance including a $500 per day penalty for covered businesses who fail to submit a report. However, the bill provides a 90-day cure period after notice of a violation.

Impact on New York employers:

Because both bills remain pending, employers do not yet face new mandatory obligations under AB 3411B or AB 9581B. However, New York employers using or considering AI tools should monitor these developments closely, particularly because AB 3411B would take effect 90 days after enactment and AB 9581B would take effect immediately.

Employers can prepare by inventorying AI tools used in hiring, human resources, operations, and customer-facing functions; reviewing vendor contracts and system interfaces for notice and reporting capabilities; identifying who internally will oversee AI governance; and evaluating whether workforce impacts from AI use can be tracked. Taking these steps now may help employers determine whether either law applies to them and respond quickly if the bills are enacted.

For more information on this topic, please contact Kyle Hogan at kyle.hogan@fmglaw.com or your local FMG relationship partner.

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