States tighten workplace rules on AI, pay transparency and leave

State and local governments advanced broad employment measures covering arbitration agreements, pay disclosure, employee monitoring, drug testing, leave, immigration verification, restrictive covenants and labor relations. California changed state arbitration rules, Colorado added EEO-1 reporting for private employers with 100 or more workers, and Connecticut expanded wage transparency, lactation accommodations, training repayment restrictions, contractor wage liability and payroll-code disclosures.

Connecticut also set rules for automated employment-related decision technology, requiring notices on AI use in applicant and employee decisions effective October 1, 2027. Reliance on AI is not a defense to discrimination claims, although bias testing and similar safeguards may be considered when evaluating liability. Separate monitoring legislation requires written employee notices and workplace postings for covered monitoring.

Other measures include Maine and Connecticut pay transparency rules, Nebraska WARN requirements for employers with 100 or more full-time employees and 90 days’ advance written notice, Maryland paid family and medical leave rules with contributions beginning Jan. 1, 2027, and Virginia paid family and medical leave benefits beginning December 1, 2028. Tennessee barred noncompete agreements for employees earning less than $70,000 annually.