SB 435 — AN ACT CONCERNING AUTOMATED DECISION SYSTEMS PROTECTIONS FOR EMPLOYEES.

435 disclose any information that is a trade secret or otherwise protected from disclosure under state or federal law.

sSB435Sec. / File No.

365 10 sSB435 File No.

365 Sec.

(NEW) (Effective October 1, 2026) Where an applicant for employmentLCO or10 employee is represented by an employee organization, a deployer shall provide written notice to such employee organization prior to any testing, deployment or material modification of an30 automatedSubstitute employment-relatedBill decisionNo. process.

435 employment or employee is represented by an employee organization, a deployer shall provide written notice to such employee organization prior to any testing, deployment or material modification of an automated employment-related decision process.

sSB435LCO /11 Fileof 30 Substitute Bill No.

365435 11(C) sSB435Whether Filesuch No.system was used to independently make, informor materially support a conclusion, decision or judgment;

365 (C) Whether such system was used to independently make, informor materially support a conclusion, decision or judgment;

(b) (1) No state agency, or any entity acting on behalf of a state sSB435LCO /12 Fileof 30 Substitute Bill No.

365435 12agency, sSB435shall, Filedirectly No.or indirectly, utilize or apply any artificial intelligence technology in performing any function that (A) is related to the delivery of any public assistance benefit to individuals in the state by such agency, or (B) will have a material impact on the rights, civil liberties, safety or welfare of individuals in the state, unless such utilization or application is specifically authorized by law.

365 agency, shall, directly or indirectly, utilize or apply any artificial intelligence technology in performing any function that (A) is related to the delivery of any public assistance benefit to individuals in the state by such agency, or (B) will have a material impact on the rights, civil liberties, safety or welfare of individuals in the state, unless such utilization or application is specifically authorized by law.

For purposes of this subsection, "artificial intelligence sSB435LCO /13 Fileof 30 Substitute Bill No.

365435 13technology" sSB435has Filethe No.same meaning as provided in section 15 of this act.

365 technology" has the same meaning as provided in section 15 of this act.

sSB435LCO /14 Fileof 30 Substitute Bill No.

365435 14When sSB435used Filein No.sections 5-270 to 5-280, inclusive, as amended by this act, and section 20 of this act:

365 When used in sections 5-270 to 5-280, inclusive, as amended by this act, and section 20 of this act:

or (2) any employee who has completed the courses of specialized intellectual instruction and study described in [subsection (c)(1)(D)] subparagraph (D) of subdivision (1) of this subsection and is performing related work under the supervision of a professional person to qualify himself to become a professional sSB435LCO /15 Fileof 30 Substitute Bill No.

365435 15employee sSB435as Filedefined No.in [subsection (c)(1)] subdivision (1) of this subsection.

365 employee as defined in [subsection (c)(1)] subdivision (1) of this subsection.

(2) development, implementation and evaluation of goalsLCO and16 objectivesof consistent30 withSubstitute agencyBill missionNo. and policy;

(3)435 sSB435goals /and Fileobjectives No.consistent with agency mission and policy;

365(3) 16participation sSB435in Filethe No.formulation of agency policy;

365 participation in the formulation of agency policy;

(1)"Municipalemployer"meansany politicalsubdivisionofthestate, includingLCO any17 town, city, borough, district, district department of sSB43530 /Substitute FileBill No.

365435 17including sSB435any Filetown, No.city, borough, district, district department of health, school board, housing authority or other authority established by law, a private nonprofit corporation which has a valid contract with any town, city, borough or district to extinguish fires and to protect its inhabitants from loss by fire, and any person or persons designated by the municipal employer to act in its interest in dealing with municipal employees;

365 health, school board, housing authority or other authority established by law, a private nonprofit corporation which has a valid contract with any town, city, borough or district to extinguish fires and to protect its inhabitants from loss by fire, and any person or persons designated by the municipal employer to act in its interest in dealing with municipal employees;

and (7) "Artificial intelligence technology" has the same meaning as providedLCO in18 sectionof 1530 ofSubstitute thisBill act.No.

sSB435435 /provided Filein No.section 15 of this act.

365Sec. 18 sSB435 File No.

365 Sec.

(1) "Automated employment-related decision process" (A) means a computational process that makes, assists in making or is used in the course of making a decision regarding a term or condition of employment, (B) includes, but is not limited to, a computational process that (i) uses a computer-based assessment or test to (I) make a predictive assessment concerning an applicant for employment or employee, (II) measure the skills, dexterity, reaction time or any other ability or characteristicofanapplicantforemploymentoremployee,(III)measureLCO the19 personality traits, aptitude, attitude or cultural fit of an30 applicantSubstitute forBill sSB435 / File No.

365435 19characteristicofanapplicantforemploymentoremployee,(III)measure sSB435the Filepersonality No.traits, aptitude, attitude or cultural fit of an applicant for employment or employee, or (IV) screen, evaluate, categorize or recommend an applicant for employment or employee, (ii) directs job advertisements or other recruiting materials to targeted groups, (iii) screens resumes for particular terms or patterns, (iv) analyzes a facial expression, word choice or voice captured during an online interview, or (v) analyzes data acquired from a third party concerning an applicant for employment or employee, and (C) does not include any word processing, spreadsheet, map navigation, web hosting, domain registration, networking, caching, Internet web site loading, data storage, firewall, anti-virus, anti-malware, spam and robocall filtering, spellchecking, calculator, database or similar software or technology insofar as such software or technology does not make a decision regarding any term or condition of employment;

365 employment or employee, or (IV) screen, evaluate, categorize or recommend an applicant for employment or employee, (ii) directs job advertisements or other recruiting materials to targeted groups, (iii) screens resumes for particular terms or patterns, (iv) analyzes a facial expression, word choice or voice captured during an online interview, or (v) analyzes data acquired from a third party concerning an applicant for employment or employee, and (C) does not include any word processing, spreadsheet, map navigation, web hosting, domain registration, networking, caching, Internet web site loading, data storage, firewall, anti-virus, anti-malware, spam and robocall filtering, spellchecking, calculator, database or similar software or technology insofar as such software or technology does not make a decision regarding any term or condition of employment;

(1)LCO (A)20 For an employer, by the employer or the employer's agent, except in the case of a30 bonaSubstitute fideBill occupational qualification or need, to sSB435 / File No.

365435 20(1) sSB435(A) FileFor No.an employer, by the employer or the employer's agent, except in the case of a bona fide occupational qualification or need, to refuse to hire or employ or to bar or to discharge from employment any individual or to discriminate against any individual in compensation or in terms, conditions or privileges of employment because of, or to use an automated employment-related decision process in any manner that has the effect of causing the employer to refuse to hire or employ or to bar or to discharge from employment any individual or to discriminate against any individual in compensation or in terms, conditions or privileges of employment on the basis of, the individual's race, color, religious creed, age, sex, gender identity or expression, marital status, national origin, ancestry, present or past history of mental disability, intellectual disability, learning disability, physical disability, including, but not limited to, blindness, status as a veteran, status as a victim of domestic violence, status as a victim of sexual assault or status as a victim of trafficking in persons.

365 refuse to hire or employ or to bar or to discharge from employment any individual or to discriminate against any individual in compensation or in terms, conditions or privileges of employment because of, or to use an automated employment-related decision process in any manner that has the effect of causing the employer to refuse to hire or employ or to bar or to discharge from employment any individual or to discriminate against any individual in compensation or in terms, conditions or privileges of employment on the basis of, the individual's race, color, religious creed, age, sex, gender identity or expression, marital status, national origin, ancestry, present or past history of mental disability, intellectual disability, learning disability, physical disability, including, but not limited to, blindness, status as a veteran, status as a victim of domestic violence, status as a victim of sexual assault or status as a victim of trafficking in persons.

(2) For any employment agency, except in the case of a bona fide occupationalLCO qualification21 orof need,30 toSubstitute failBill or refuse to classify properly or refer for employment or otherwise to discriminate against any sSB435 / File No.

365435 21occupational sSB435qualification Fileor No.need, to fail or refuse to classify properly or refer for employment or otherwise to discriminate against any individual because of such individual's race, color, religious creed, age, sex, gender identity or expression, marital status, national origin, ancestry, present or past history of mental disability, intellectual disability, learning disability, physical disability, including, but not limited to, blindness, status as a veteran, status as a victim of domestic violence, status as a victim of sexual assault or status as a victim of trafficking in persons.

365 individual because of such individual's race, color, religious creed, age, sex, gender identity or expression, marital status, national origin, ancestry, present or past history of mental disability, intellectual disability, learning disability, physical disability, including, but not limited to, blindness, status as a veteran, status as a victim of domestic violence, status as a victim of sexual assault or status as a victim of trafficking in persons.

[;] (6) For any person, employer, employment agency or labor organization, except in the case of a bona fide occupational qualification or need, to advertise employment opportunities in such a manner as to restrict such employment so as to discriminate against individuals becauseLCO of22 their race, color, religious creed, age, sex, gender identity or expression, marital status, national origin, ancestry, present or past history of mental30 disability,Substitute intellectualBill disability, learning disability, sSB435 / File No.

365435 22because sSB435of Filetheir No.race, color, religious creed, age, sex, gender identity or expression, marital status, national origin, ancestry, present or past history of mental disability, intellectual disability, learning disability, physical disability, including, but not limited to, blindness, status as a veteran, status as a victim of domestic violence, status as a victim of sexual assault or status as a victim of trafficking in persons.

365 physical disability, including, but not limited to, blindness, status as a veteran, status as a victim of domestic violence, status as a victim of sexual assault or status as a victim of trafficking in persons.

(J) to require an employeeLCO to23 take a leave of absence30 ifSubstitute aBill reasonableNo. accommodation can be provided in lieu of such leave;

435 employee to take a leave of absence if a reasonable accommodation can be provided in lieu of such leave;

sSB435[;] /(8) FileFor No.an employer, by the employer or the employer's agent, for an employment agency, by itself or its agent, or for any labor organization, by itself or its agent, to harass any employee, person seeking employment or member on the basis of sex or gender identity or expression.

365 23 sSB435 File No.

365 [;] (8) For an employer, by the employer or the employer's agent, for an employment agency, by itself or its agent, or for any labor organization, by itself or its agent, to harass any employee, person seeking employment or member on the basis of sex or gender identity or expression.

[;] (9) For an employer, by the employer or the employer's agent, for an employment agency, by itself or its agent, or for any labor organization, byLCO itself24 or its agent, to request or require information from an employee, person seeking employment or member relating to the individual's child-bearing age or plans, pregnancy, function of the30 individual'sSubstitute reproductiveBill system, use of birth control methods, or the sSB435 / File No.

365435 24by sSB435itself Fileor No.its agent, to request or require information from an employee, person seeking employment or member relating to the individual's child-bearing age or plans, pregnancy, function of the individual's reproductive system, use of birth control methods, or the individual's familial responsibilities, unless such information is directly related to a bona fide occupational qualification or need, provided an employer, through a physician may request from an employee any such information which is directly related to workplace exposure to substances which may cause birth defects or constitute a hazard to an individual's reproductive system or to a fetus if the employer first informs the employee of the hazards involved in exposure to such substances.

365 individual's familial responsibilities, unless such information is directly related to a bona fide occupational qualification or need, provided an employer, through a physician may request from an employee any such information which is directly related to workplace exposure to substances which may cause birth defects or constitute a hazard to an individual's reproductive system or to a fetus if the employer first informs the employee of the hazards involved in exposure to such substances.

For the purpose of this subdivision, "genetic information" means the information about genes, gene products or inherited characteristics that may derive from an individual orLCO a25 familyof member.30 Substitute Bill No.

[;]435 (12) For an employer, by the employer or the employer's agent, to request or require a prospectivefamily employee'smember. age, date of birth, dates of sSB435 / File No.

365[;] 25(12) sSB435For Filean No.employer, by the employer or the employer's agent, to request or require a prospective employee's age, date of birth, dates of attendance at or date of graduation from an educational institution on an initial employment application, provided the provisions of this subdivision shall not apply to any employer requesting or requiring such information (A) based on a bona fide occupational qualification or need, or (B) when such information is required to comply with any provision of state or federal law.

365 attendance at or date of graduation from an educational institution on an initial employment application, provided the provisions of this subdivision shall not apply to any employer requesting or requiring such information (A) based on a bona fide occupational qualification or need, or (B) when such information is required to comply with any provision of state or federal law.

(B) An employee who is absent from work in accordance with the provisions of subparagraph (A) of this subdivision shall, within a reasonabletimeaftertheabsence,provideacertificationtotheemployer whenLCO requested26 byof the30 employer.Substitute Bill No.

435 when requested by the employer.

(ii) a court order protecting or separating the employee or sSB435employee's /child Filefrom No.the perpetrator of an act of domestic violence, sexual assault or trafficking in persons;

365 26 sSB435 File No.

365 employee's child from the perpetrator of an act of domestic violence, sexual assault or trafficking in persons;

(C) the termination of employmentLCO 27 of persons30 inSubstitute occupations,Bill includingNo. police work and fire- fighting, in which age is a bona fide occupational qualification;

435 employment of persons in occupations, including police work and fire- fighting, in which age is a bona fide occupational qualification;

or (E) the observance of the terms of a bona fide seniority system or any bona fide sSB435employeebenefitplanforretirement,pensionsorinsurancewhichisnot /adopted Filefor No.the purpose of evading said provisions, except that no such plan may excuse the failure to hire any individual and no such system or plan may require or permit the termination of employment on the basisofage.Nosuchplanwhichcoverslessthantwentyemployeesmay reduce the group hospital, surgical or medical insurance coverage provided under the plan to any employee who has reached the age of sixty-five and is eligible for Medicare benefits or any employee's spouse who has reached age sixty-five and is eligible for Medicare benefits except to the extent such coverage is provided by Medicare.

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365 employeebenefitplanforretirement,pensionsorinsurancewhichisnot adopted for the purpose of evading said provisions, except that no such plan may excuse the failure to hire any individual and no such system or plan may require or permit the termination of employment on the basisofage.Nosuchplanwhichcoverslessthantwentyemployeesmay reduce the group hospital, surgical or medical insurance coverage provided under the plan to any employee who has reached the age of sixty-five and is eligible for Medicare benefits or any employee's spouse who has reached age sixty-five and is eligible for Medicare benefits except to the extent such coverage is provided by Medicare.

(4) Any employee who continues employment beyond the normal retirement age in the applicable retirement or pension plan shall give noticeLCO 28 of intent30 toSubstitute retire,Bill inNo. writing, to such employee's employer not less than thirty days prior to the date of such retirement.

(d)435 (1)notice Anof employerintent shallto provideretire, writtenin noticewriting, ofto thesuch rightemployee's toemployer benot freeless fromthan discriminationthirty indays relationprior to pregnancy,the childbirthdate andof relatedsuch sSB435retirement. / File No.

365(d) 28(1) sSB435An Fileemployer No.shall provide written notice of the right to be free from discrimination in relation to pregnancy, childbirth and related conditions, including the right to a reasonable accommodation to the known limitations related to pregnancy pursuant to subdivision (7) of subsection (b) of this section to:

365 conditions, including the right to a reasonable accommodation to the known limitations related to pregnancy pursuant to subdivision (7) of subsection (b) of this section to:

(b) Each employer that serves written notice on the Labor Department pursuant to 29 USC 2102(a), as amended from time to time, shall disclose to the department, in a form and manner prescribed by the Labor Commissioner, whether the layoffs that are thesubject of such written notice are related to the employer's use of an artificial intelligenceLCO system29 orof another30 technologicalSubstitute change.Bill No.

435 intelligence system or another technological change.

sSB435This /act Fileshall No.take effect as follows and shall amend the following sections:

365 29 sSB435 File No.

365 This act shall take effect as follows and shall amend the following sections:

5 October 1, 2026 New section October 1, 2026 Sec.

6 October 1, 2026 New section Sec.

12 October 1, 2026 New section October 1, 2026 Sec.

13 October 1, 2026 New section Sec.

19 October 1, 2026 5-270 October 1, 2026 Sec.

20 October 1, 2026 New section Sec.

24 October 1, 2026 New section StatementLAB ofJoint LegislativeFavorable Commissioners:Subst.

InJUD SectionJoint 19(c),Favorable internalLCO references30 wereof updated30 for consistency with standard drafting conventions.

LAB Joint Favorable Subst.

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365 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 27 $ FY 28 $ Department of Administrative GF - Cost 422,000 422,000 Services Labor Dept.

GF - Cost 286,375 307,166 State Comptroller - Fringe GF - Cost 180,385 209,566 Benefits Human Rights & Opportunities, GF - Potential Minimal Minimal Com.

Revenue Gain Human Rights & Opportunities, GF - Potential Minimal Minimal Com.

Cost Note:

GF=General Fund Municipal Impact:

None Explanation The bill, which establishes various requirements for employers using automated employment-related decision processes (AEDP), results in the impacts described below.

Section 8 requires the Department of Labor (DOL) to establish and implement a process for approving independent auditors to conduct bias audits and to maintain a registry of such approved auditors.

It also tasks the DOL with approving corrective actions taken by AEDP deployers if disparate impacts are found in such audits.

This results in a cost to the (1) DOL of $236,375 in FY 27 (partial year cost) and $307,166 in FY 28, and (2) State Comptroller-Fringe Benefits account of $87,545 in The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller.

The estimated active employee fringe benefit cost associated with most personnel changes is 41.82% of payroll in FY 27.

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365 31 sSB435 File No.

365 FY 27 (partial year cost) and $116,726 in FY 28.

The costs identified above reflect the hiring of one research analyst supervisor (annualized cost of $113,059 for salary, $11,362 for overhead, and $47,281 for fringe benefits), one research analyst (annualized cost of $89,730 for salary, $9,018 for overhead, and $37,525 for fringe benefits), and one research associate (annualized cost of $76,326 for salary, $7,671 for overhead, and $31,920 for fringe benefits).

Sections 14 and 15, whichadd additionalrequirementsregarding the inventory, assessment, procurement, and use of AI by state agencies, result in a cost of $514,840 to the General Fund in FY 27 and annually thereafter.

The costs include $314,840 in salary and fringe for two new analysts within the Department of Administrative Services (DAS) and $200,000 incostsrelatedtochangesinITinfrastructure andongoingbias assessments of AI systems.

Section 23 expands the definition of a "discriminatory practice" under the Commission on Human Rights and Opportunities (CHRO) laws to include:

(1) failure to disclose use of AEDP in personnel decisionsand(2)using AEDPin personneldecisionsand discriminating based on protected status, resulting in a potential cost and potential revenue gain to CHRO beginning in FY 27.

The exact cost and revenue gain will depend on the number of additional CHRO proceedings brought and fines imposed in response to this section.

These impacts are expected to be minimal.

Section 24 requires that applications for unemployment benefits include whether the applicant's unemployment is due to the use of an AI system.

This results in a one-time cost to the DOL of $50,000 in FY 27 related to vendor costs needed to make changes to ReEmployCT, the state's unemployment tax and benefits system.

The bill also (1) adds various requirements for AEDP deployers and 2This cost is associated with additional staff time, materials, and resources required to facilitate additional proceedings.

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365 employers, (2) makes conforming changes to public employee collective bargainingmatters,(3)establishesproceduresforrelatedviolations,and (4) allows municipal employees, state employees, and public-school teachers to collectively bargain over their employer's use of AI technology.

This does not result in any fiscal impact to the state.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to inflation, and the proceedings and fines imposed as a result of section 23.

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365 OLR Bill Analysis sSB 435 AN ACT CONCERNING AUTOMATED DECISION SYSTEMS PROTECTIONS FOR EMPLOYEES.

SUMMARY This bill sets limitations and requirements for employers using an automated employment-related decision process (AEDP) (for example artificial intelligence (AI)) to make employment-related decisions.

Among other things, it requires AEDP deployers to (1) notify job applicants and employees about certain information when the deployer uses AEDP;

(2) have a way for applicants and employees to appeal an adverse employment decision made by an AEDP, including through a human review process;

and (3) have an independent bias audit performed on the AEDP annually.

The bill prohibits firing, discriminating against, or retaliating against an applicant or employee because they filed a complaint about a violation of the bill’s AEDP provisions, objected to or refused to participate in an activity that they reasonably believed to be a violation ofthem, or exercised any rightsgrantedunder them.It allowsaggrieved applicants, employees, and their unions to sue in Superior Court.

It also makes violations of the bill’s AEDP provisions an unfair or deceptive trade practice, solely enforced by the attorney general.

The bill also:

1.

expands the information that must be included in the annual inventory of state agency AI systems;

2.

generally prohibits state agencies from (a) using AI to perform certain functions or (b) procuring or acquiring an AI system without specific legal authorization;

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365 3.

explicitly makes the use of AI a subject of collective bargaining for public sector employees;

4.

makes it a discriminatory employment practice for an employer to use an AEDP in a way that causes the employer to refuse to hire someone or discriminate against them based on their protected class status (for example, race, religion, or sex);

and 5.

requiresemployerssubjecttothefederalWorkerAdjustmentand Retraining Notification (WARN) Act to disclose whether certain layoffs are due to using AI.

EFFECTIVE DATE:

October 1, 2026 §§ 1-13 — AUTOMATED EMPLOYMENT-RELATED DECISION PROCESSES Under the bill, an “automated employment-related decision process” is a computational process that makes, helps make, or is used in the course of making an employment-related decision.

This includes a computational process that:

1.

usesa computer-based assessment or test to (a)make a predictive assessment about a job applicant or employee;

(b) measure the applicant’s or employee’s skills, dexterity, reaction time, or any other ability or characteristic;

(c) measure the applicant’s or employee’s personality traits, aptitude, attitude, or cultural fit;

or (d) screen, evaluate, categorize, or recommend an applicant or employee;

2.

directs job advertisements or other recruiting materials to targeted groups;

3.

screens resumes for particular terms or patterns;

4.

analyzes a facial expression, word choice, or voice captured during an online interview;

or 5.

analyzes data from a third party about an applicant or employee.

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365 AEDP does not include software or technology such as word processing, data storage, or anti-virus software to the extent that it does not make an employment-related decision.

An “employment-related decision” is a decision about a term or condition of employment.

It includes decisions (1) to hire, promote, or terminate a job applicant or employee;

(2) about an applicant’s or employee’s compensation, scheduling, duty assignments, productivity monitoring, workplace surveillance, or performance evaluations;

and (3) affecting an applicant’s or employee’s rights, benefits, or obligations.

Required Information (§ 2) The bill generally requires the developer of an AEDP deployed in the state to give the system’s deployer all information that the deployer needs to perform its duties under the bill.

For this purpose, the “developer” is the person (including entities) doing business in the state who develops, or intentionally and substantially modifies, an AEDP.

A “deployer” is a person doing business in the state who puts an AEDP into use in the state.

The bill allows an AEDP developer to enter into a contract with a deployer to assume the deployer’s disclosure requirements under the bill (see §§ 3-6 below).

This contract must be binding and clearly state whichofthedeployer’sdutiesthedeveloperhasassumed.No provision of the contract that waives or releases the developer’s or deployer’s joint and several liability under the bill can be enforced.

Disclosure Requirements (§§ 3-6) All of the notice and disclosure requirements described below apply to an AEDP deployer unless a developer has contracted to assume the deployer’s disclosure duties.

Disclosure on Interacting with an AEDP.

The bill requires a deployer who deploys an AEDP meant to interact with an in-state job applicant or employee to ensure that it is disclosed to each applicant or employee who interacts with the AEDP that they are interacting with one.

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365 Personal Data Collection Disclosure.

The bill requires a deployer, before collecting from an in-state job applicant or employee any personal data for processing in an AEDP, to give the applicant or employee a written notice disclosing:

1.

the data collection’s purpose;

2.

the personal data categories that will be collected for processing;

3.

how long the personal data will be retained;

4.

the categories of persons who will have access to this data;

and 5.

information about the right, under state law, to opt out of personal data processing for profiling in furtherance of solely automated decisions that produce legal or similarly significant effects.

Disclosure of Employment-Related Decisions.

The bill requires a deployer, before using an AEDP to make, or be a substantial factor in making, an employment-related decision about an in-state job applicant or employee, to give the applicant or employee a written notice disclosing:

1.

that the deployer has deployed an AEDP;

2.

the AEDP’s purpose and the employment-related decision’s nature;

3.

information about the right, under state law, to opt out of personal data processing for profiling in furtherance of solely automated decisions that produce legal or similarly significant effects;

4.

the deployer’s contact information;

5.

the availability of human review under the bill (see § 7);

6.

information about how the applicant or employee can request a sSB435 / File No.

365 37 sSB435 File No.

365 reevaluation of any employment-related decision made in whole or in part by the AEDP;

7.

a link to the summary of the most recent bias audit as required by the bill (see § 8);

and 8.

information on how to request additional documentation or information about the AEDP.

Under the bill, a “substantial factor” is a factor that helps in making, and can alter the outcome of, an employment-related decision about an individual in the state.

It includes any use of an AEDP to generate any content, decision, prediction, or recommendation about someone that is used as a basis to make an employment-related decision about that individual.

The bill also requires such a deployer to have a process for an applicant or employee to request a reevaluation of any employment- related decision made in whole or in part by an AEDP.

Disclosure on Adverse Decisions.

The billrequiresa deployer who has deployed an AEDP to make, or be a substantial factor in making, an adverse employment-related decision about an in-state job applicant or employee to give the applicant or employee:

1.

a high-level statement disclosing the principal reason or reasons for the adverse decision, including the (a) degree to which, and manner in which, the AEDP contributed to the decision;

(b) type of data processed by the AEDP in making, or as a substantial factor in making, the decision;

and (c) source of the data;

2.

an opportunity to (a) examine the data the AEDP processed in making, or as a substantial factor in making, the adverse decision;

(b) correct any incorrect data;

and (c) appeal the decision, which must allow for human review;

and 3.

upon the applicant’s or employee’s request (or that of their representative), a copy of the most recent bias audit required sSB435 / File No.

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365 under the bill.

Under the bill, a deployer who must give an applicant or employee a high-level statement about an adverse employment-related decision must provide the statement (1) directly to the applicant or employee;

(2) in plain language;

(3) in all languages the deployer uses in the ordinary course of its business for contracts, disclaimers, sales announcements, and other information to persons in the state;

and (4) in a format that is accessible to individuals with disabilities.

Human Review (§ 7) The bill requires a deployer who uses an AEDP to make, or as a substantial factor in making, an employment-related decision about a job applicant or employee in the state to implement human review over the AEDP by allowing sufficient time to review (1) the content, decisions, predictions, or recommendations generated by the AEDP;

(2) data upon which they are based;

and (3) any other information relevant to them to confirm the accuracy of the data processed by the AEDP.

When appropriate, it must also allow sufficient time to modify or veto any content, decision, prediction, or recommendation the AEDP generated before any adverse decision.

Under the bill, “human review” is a review conducted by a qualified individual who (1) has the authority to make or change an employment- related decision;

(2) has received appropriate training to understand the AEDP’s capabilities, limitations, and risks, including its patterns of bias, disparate impact, and data quality issues;

and (3) does not rely solely on the AEDP’s content, decision, prediction, or recommendation in making a final or determinative employment-related decision.

The bill requires a deployer to (1) establish procedures needed to pause, correct, or reverse erroneous or harmful content, decisions, predictions, or recommendations generated by an AEDP and (2) establish and maintain logs listing all human review reports and any intervention taken by an individual conducting a human review.

The bill prohibits deployers from using an AEDP to make any sSB435 / File No.

365 39 sSB435 File No.

365 employment-related decision without human review over the decision.

Bias Audits (§ 8) The bill requires deployers, before deploying an AEDP, and then annually, to contract with an independent auditor to complete a bias audit.

The audit must be done no later than one year before the date the deployer intends to deploy the AEDP.

The bill requires each bias audit to:

1.

evaluate the AEDP’s performance and error rates across relevant subgroups;

2.

assess disparate impact caused by the AEDP against protected classes;

3.

examine the sources of data processed by the AEDP and the quality of the content, decisions, predictions, or recommendations it generates;

4.

evaluate the effects of any thresholds, scoring, or ranking criteria used by the AEDP;

and 5.

test for less discriminatory alternatives or adjustments to the AEDP.

The bill requires the labor commissioner to (1) establish and implement a process for approving independent auditors to conduct bias audits and (2) maintain a registry of the approved auditors.

It prohibits deployers from contracting with independent auditors who (1) have a financial or operational interest in the deployer or the AEDP’s developer or (2) have not been approved by the labor commissioner as required by the bill.

Under the bill, within 30 days after completing a bias audit the deployer must (1) file an audit report and plain-language summary of it with the commissioner in a form and manner she sets and (2) publish a plain-language summary of the audit report on the deployer’s website sSB435 / File No.

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365 in a conspicuous place accessible to job applicants and employees.

The summary must include (1) the methodology used in the audit, (2) the audit’s key findings and identified risks, and (3) any corrective actions taken by the deployer.

The bill prohibits an AEDP from being deployed or continuing to be deployed by a deployer if the most recent bias audit identified any disparate impact caused by the AEDP, unless the deployer can show that it has implemented corrective actions approved by the labor commissioner.

The bill requires deployers to maintain records on their required bias audits for at least five years and make them available to the labor commissioner upon request.

It allows the commissioner to (1) issue an order suspending the use of any AEDP by a deployer that violates these bias audit provisions and (2) adopt regulations needed to carry out these bias audit provisions, including establishing minimum qualifications for independent auditors and methodologic requirements for bias audits.

The regulations must define the terms “relevant subgroups,” “disparate impact,” and “protected classes” by January 1, 2027.

Withholding Information (§ 10) The bill specifies that its AEDP provisions (§§ 2-8) do not require any person to disclose trade secrets or information otherwise protected from disclosure under state or federal law.

However, if a person withholds any information as a trade secret or protected information, the bill requires the person to send a notice to the person from whom the information is being withheld.

The notice must disclose (1) that the person is withholding the information and (2) the basis for the person’s decision to do so.

The bill specifies that this provision does not allow any person to withhold information needed for an applicant or employee to exercise their rights under the bill’s AEDP provisions (§§ 3-8).

sSB435 / File No.

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365 Retaliation Protections and Court Relief (§§ 9 & 12) The bill prohibits employers, deployers, developers, labor organizations, or any other person from discharging, or in any way discriminating or retaliating against, a job applicant or employee because they (1) filed a complaint, provided information, or otherwise assisted in an investigation or proceeding about any alleged violation of the bill’s AEDP provisions (§§ 3-8);

(2) objected to or refused to participate in any activity that they reasonably believed to violate those provisions;

or (3) exercised any rights granted under those provisions.

Under the bill, an applicant or employee aggrieved by a violation of the AEDP provisions (including its retaliation protections), or an employee organization on their behalf, may bring a Superior Court civil action to recover damages and for declaratory, injunctive, or other equitable relief, including suspending the use of any AEDP.

The court may award the applicant or employee costs and reasonable attorney’s fees.

Under the bill, a deployer of an AEDP who violates the bill’s AEDP provisions and the AEDP’s developer are jointly and severally liable.

CUTPA Violation (§ 11) The bill also makes a violation of its AEDP provisions (§§ 3-8) an unfair or deceptive trade practice under the Connecticut Unfair Trade PracticesAct (CUTPA, see BACKGROUND)to beenforcedsolely bythe attorney general (and not by private lawsuits or class actions).

Notice to Employee Unions (§ 13) Under the bill, if a job applicant or employee is represented by an employee organization (union), a deployer must give the organization written notice before any testing, deployment, or material modification of an AEDP.

§ 14 — ANNUAL INVENTORY OF STATE AGENCY AI SYSTEMS By law, the Department of Administrative Services (DAS) must annually inventory all executive branch state agency systems that use AI.

The inventory must include, among other things, whether the system (1) was used to independently make, inform, or materially sSB435 / File No.

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365 support a conclusion, decision, or judgment and (2) had an impact assessment before its implementation.

Starting with the inventory due by the end of 2025, the bill expands the required information to also include (1) the date of the last impact assessment, (2) whether the system has access to personally identifiable information of people in the state, (3) the cost of time savings provided by the system, and (4) the system’s potential risks to people in the state, communities, and state employees.

§ 15 — STATE AGENCY USE OF AI The bill prohibits any state agency, or any entity acting on its behalf, from directly or indirectly using or applying an AI technology to perform a function that (1) is related to the agency delivering a public assistance benefit to people in the state or (2) will have a material impact on the rights, civil liberties, safety, or welfare of people in the state, unless the use or application is specifically authorized by law.

Under this provision, “AI technology” is a computer system, application, or other product that uses or incorporates one or more forms of AI.

A “state agency” is any office, department, board, council, commission, institution, constituent unit of the state system of higher education, technical education and career school, or other agency in the executive, legislative, or judicial branch of state government.

The bill also prohibits state agencies from authorizing any procurement, purchase, or acquisition of any AI technology, unless its use is specifically authorized by law.

Under the bill, if such an acquisitionisauthorized,theagency must contract withanindependent auditor to complete a bias audit as required for AEDP deployers (see § 8).The audit must be submittedto theDAS commissioner,ina formand way she sets, and posted on the DAS website at least 60 days before the AI technology is deployed.

The agency may redact any data in the bias audit to remove anyone’s personally identifiable information.

§§ 16-22 — AI IN PUBLIC EMPLOYEE COLLECTIVE BARGAINING The bill specifies that municipal employees, state employees, and sSB435 / File No.

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365 public school teachers have a right to collectively bargain over their employer’s (or, for teachers, board of education’s) use of AI technology.

The bill also prohibits the state and municipal employers, during the term of a written collective bargaining agreement with their employees, from using AI technology in a way that modifies or impairs the:

1.

agreement inany way,including onethat modifiesor impairsthe rights, benefits, and privileges of the union members by (a) reducing their wages, fringe benefits, or non-overtime hours or (b) assuming their duties and functions;

2.

union’s role as the exclusive representative ofthe bargaining unit for the agreement;

or 3.

relationship between the employer and the union with respect to the agreement.

§ 23 — AEDP IN EMPLOYMENT DISCRIMINATION The bill makes it a discriminatory employment practice, under the laws administered by the Commission on Human Rights and Opportunities(CHRO), for anemployer,or the employer’sagent,touse anAEDPinany way that causestheemployerto do any ofthefollowing based on the person’s protected class status (for example, race, religion, sex, or gender identity or expression):

1.

refuse to hire or employ someone;

2.

bar or discharge someone from employment;

or 3.

discriminate against someone in compensation or in terms, conditions, or privileges of employment.

Existing law gives someone adversely affected by a discriminatory practice, or CHRO itself, the right to file a complaint with CHRO and, potentially, the courts.

In any action for this particular discriminatory employment practice, the bill requires CHRO or a court to consider any evidence, or lack of it, of anti-bias testing or similar proactive efforts to sSB435 / File No.

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365 avoid the discriminatory practice, such as the quality, efficacy, recency, and scope of the testing or efforts, their results, and the response to them.

The bill also makes it a discriminatory employment practice for an employer, or the employer’s agent, to fail to give someone advance written notice that discloses that an AEDP will be used to make or help make a decision (1) to hire or employ the person;

(2) to bar or discharge the person from employment;

or (3) about the person’s compensation or terms, conditions, or privileges of employment.

The notice must at least disclose the AEDP’s trade name and the types and sources of personal information about the person that the AEDP will process or analyze.

§ 24 — AI NOTICE FOR UNEMPLOYMENT The bill requires each employer that must notify the Department of Labor about certain layoffs under the federal WARN Act to disclose, in a form and way set by the labor commissioner, whether the layoffs are related to the employer’s use of an AI system or another technological change.

Generally, the WARN Act requires certain large employers to give 60 days’ advance written notice of a mass layoff.

The bill also requires any application for unemployment benefits to include a question about whether the applicant’s unemployment is due to an employer’s use of an AI system.

BACKGROUND CUTPA By law, CUTPA prohibits businesses from engaging in unfair and deceptive acts or practices.

It allows the consumer protection commissioner, under specifiedprocedures,to issueregulationsdefining an unfair trade practice, investigate complaints, issue cease and desist orders, order restitution in cases involving less than $10,000, impose civil penalties of up to $5,000, enter into consent agreements, ask the attorney general to seek injunctive relief, and accept voluntary statements of compliance.

It also allows individuals to sue.

Courts may issue restraining orders;

award actual and punitive damages, costs, and sSB435 / File No.

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365 reasonable attorney’s fees;

and impose civil penalties of up to $5,000 for willful violations and up to $25,000 for a restraining order violation.

Related Bills sSB 4, §§ 13 & 14, reported favorably by the General Law Committee, gives consumers the right to be informed whether a profiling decision used personal data from a third party in processing an employment denial and to correct any inaccuracies.

sSB 5, reported favorably by the General Law Committee, includes similar provisions on AEDP use, AI use in public sector employee collective bargaining, AEDP use in employment discrimination, layoff notices, and unemployment benefit applications.

COMMITTEE ACTION Labor and Public Employees Committee Joint Favorable Substitute Yea 9 Nay 4 (03/19/2026) sSB435 / File No.

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