Connecticut enacts sweeping AI law

A comprehensive AI bill recently signed into law by Connecticut Gov. Ned Lamont will soon require transparency around AI-related layoffs and employers’ use of automated systems to influence employment decisions.

Under S.B. 5, beginning October 1, 2026, employers who submit notice to the state under the WARN Act – a federal law that requires advance notice of mass layoffs – must disclose to the Connecticut Department of Labor whether the layoffs are the result of the employer’s use of AI or another technological change.

In addition, employers that use automated employment-related decision technologies (AEDTs) will be subject to a range of disclosure requirements, depending on the use of the AEDT.

An AEDT is any technology that processes personal data and uses computation to generate an output – such as a prediction, recommendation, classification, ranking or score – that is a substantial factor in an employment-related decision.

If an employer uses an AEDT that is intended to interact with employees or applicants, it must inform each applicant or employee who does so that they are interacting with an AEDT, unless that fact would be obvious to a reasonable person.

Additional requirements apply if an employer uses an AEDT to make or substantially contribute to an employment-related decision affecting an applicant or employee. In these situations, the employer must provide the affected individual with a written notice disclosing:

• That the employer has deployed an AEDT;
• The purpose of the AEDT and the nature of the employment decision;
• The trade name of the AEDT;
• The categories of the individual’s personal data the AEDT will analyze or process and how the data will be assessed in reaching a decision;
• The sources of the personal data analyzed or processed by the AEDT; and
• Contact information for the employer.

These disclosure requirements apply to uses of AEDTs on or after October 1, 2027.

S.B. 5 also amends the Connecticut Fair Employment Practices Act (CFEPA) to specify that an employer’s use of an AEDT is not a defense to a discrimination complaint. In other words, an employer cannot avoid liability for a discriminatory decision by blaming the decision on the AEDT. However, a court may consider evidence of anti-bias testing or similar proactive efforts to avoid discrimination. These amendments take effect October 1, 2026.