New York mandates AI/automation disclosure in mass layoffs as part...
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June 17, 2025 — In a pioneering move, New York has become the first U.S. state to require employers to disclose whether artificial intelligence (AI) or automation contributes to mass layoffs, a step aimed at enhancing workforce transparency and understanding the impact of technology on jobs.
The new requirement, which took effect in March 2025, is part of an amendment to the state’s Worker Adjustment and Retraining Notification (WARN) Act, announced by Governor Kathy Hochul during her January 2025 State of the State address.
The New Rule: A Checkbox for Transparency
Under the updated NY WARN Act, employers with 50 or more employees must file a notice at least 90 days before a mass layoff or plant closure affecting at least 25 workers or one-third of the workforce at a single site. The new mandate adds a checkbox to the WARN form, requiring companies to indicate if “technological innovation or automation” is a reason for the layoffs. If checked, employers must specify the technology involved, such as AI or robotics.
This contrasts with the federal WARN Act, which applies to companies with 100 or more employees and requires 60 days’ notice for layoffs of 50 or more workers but does not mandate disclosure of reasons. New York’s stricter requirements aim to provide workers and policymakers with critical data to address job displacement caused by automation.
Governor Hochul emphasized the dual goals of the policy: “The primary goals are to aid transparency and gather data on the impact of AI technologies on employment and to ensure the integration of AI tools into the workforce creates an environment where workers can thrive.” The state’s Department of Labor (DOL) will use the data to inform reskilling programs and economic policies, though defining an “AI-related layoff” remains a challenge, as noted by Labor Commissioner Roberta Reardon.
Why It Matters: AI’s Growing Impact on Jobs
The rise of AI has sparked widespread concern about job displacement across industries. A 2024 International Monetary Fund report estimated that AI could affect nearly 40% of jobs globally, with half potentially facing automation-driven displacement. In the U.S., industries like finance, tech, and customer service are increasingly adopting AI, leading to efficiency gains but also workforce reductions. For instance, a recent report noted that global banks could lose up to 200,000 jobs in the coming years due to automation, while companies like Meta and IBM have announced layoffs tied to AI adoption.
In New York, where AI is projected to drive $320 billion in economic growth by 2038, the state is balancing innovation with worker protections. The disclosure requirement aims to provide clarity on how AI is reshaping the labor market. As of June 2025, no companies filing WARN notices in New York have reported AI as a cause for layoffs, possibly due to the rule’s newness or employers’ reluctance to admit AI’s role.
Experts see this as a critical step. Michael Jakowsky, an employment attorney with Jackson Lewis PC, told Bloomberg Law, “The policy is trying to get a handle on what’s going on behind the scenes so they can better understand the economic impact of AI.” However, he noted that the policy’s success depends on employers accurately reporting AI’s role, which may be complicated by mixed factors like market conditions.
Implications for Employers and Workers
For employers, the mandate introduces new compliance obligations. Companies must now navigate potential public relations challenges when admitting AI-driven layoffs, which could impact brand reputation and employee morale. However, transparency could foster trust with workers and the public.
Legal and HR leaders are advised to assess how AI tools are used and their impact on headcount, job satisfaction, and morale to ensure compliance. Shawn Matthew Clark, an attorney at Littler, noted, “This is one more content obligation added to the already complex notice requirements under NY WARN.”
For workers, the 90-day notice period creates a window for proactive reskilling. The policy also requires employers to provide affected workers with access to workforce training programs when AI is a factor in layoffs. This aligns with findings from the World Economic Forum, which reported that 63% of employers see skill gaps as a major barrier to business transformation through 2030.
Broader Context: AI Regulation in the Workplace
New York’s move is part of a growing trend to regulate AI in employment. In 2021, New York City passed Local Law 144, requiring bias audits for automated employment decision tools (AEDTs) used in hiring and promotions. Other states, like Colorado and Illinois, have enacted laws to prevent algorithmic discrimination in AI-driven employment decisions, while California has proposed similar measures.
At the federal level, the Equal Employment Opportunity Commission (EEOC) issued guidance in 2023 on AI’s potential for adverse impact in workplace decisions, though recent rollbacks under the Trump administration have shifted focus to state-level regulations. New York’s law could set a precedent for other states considering similar measures.
Challenges and Criticisms
The policy has potential shortcomings. It only applies to mass layoffs, missing smaller AI-driven job cuts, and its effectiveness hinges on employers’ willingness to report accurately.
Kevin Frazier, a scholar cited by Bloomberg, questioned, “How do you point to a single job and say this job loss was caused by AI, rather than market conditions or other factors?”
Critics also argue that the added compliance burden could slow AI integration, though supporters counter that it encourages responsible adoption.
Looking Ahead
New York’s AI disclosure mandate marks a bold step toward addressing the human cost of automation.
By collecting real data on AI’s impact, the state aims to craft policies that support displaced workers while fostering innovation.
As other states and federal regulators observe New York’s outcomes, this policy could spark a nationwide framework for managing AI’s role in the workforce.
For now, HR professionals, employers, and workers in New York must adapt to a new era of transparency in the age of AI.
Written by Grok with inputs from the HR Spotlight team and information sourced from Bloomberg Law, New York State Government, New York State Department of Labor (DOL), International Monetary Fund (IMF), World Economic Forum (WEF), Equal Employment Opportunity Commission (EEOC), New York City Local Law 144, General Web Sources.
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