As of early 2025, over 75 AI-related measures have been adopted across 28 states, according to the National Conference of State Legislatures.
From Colorado’s bias audit mandates to California’s disclosure requirements, businesses are facing a fast-growing, fragmented legal landscape. Regulators aren’t waiting to see what might happen. They’re already enforcing these rules.
While some states are focusing on algorithmic fairness, others are prioritizing consumer protection. The result? A scattershot approach with inconsistent compliance standards. Operating or hiring across multiple states exposes companies to overlapping or even conflicting obligations.
Mapping your legal risk is a must. It’s a proactive step to avoid liability, protect your teams, and adapt to regulations that are moving as fast as the technology.
Your AI Compliance Toolkit
Before diving into the regulations themselves, here’s a toolkit you can use to manage risk and educate your workforce proactively.
1. Scan for AI Risk Across Your State
Start by identifying the jurisdiction in which you operate. Even if your headquarters is in one state, you may serve customers or employ people in another. Each location may come with its own set of AI rules.
2. Default to the Strictest Standard
When in doubt, align with the most rigorous law that applies to your situation. If one state requires bias audits for hiring algorithms, treat that as the baseline, even if you’re not required to yet.
This model gives your organization flexibility while reducing exposure as new laws emerge.
Tip: Focus on states like California, Colorado, Utah, and New York City since they have the most active legislation. Texas is one to watch with a major law set to go into effect in 2026.
3.Educate Through Interactive Content
Employees play a critical role in AI compliance. Long PDFs or legal memos will cause most to disengage. Instead, use role-specific training that allows people to understand what’s at stake and how to proceed.
- HR teams need to understand hiring tool disclosures.
- Marketing teams should know what counts as AI-generated content.
- IT teams should document AI system inputs and outputs.
Tailor explainer videos and microsites by state, team, or tool to keep education practical and relevant.
4. Vet Your Vendors
You must oversee and remain accountable for third-party AI systems. Require vendors to share compliance documentation like audit reports, privacy practices, and disclosures.
Create a shared space where teams can see which tools are approved and why.
5. Keep Pace with Legal Change
AI regulations are moving as fast as the technology. New York’s Local Law 144 took effect with just months of notice. Colorado expects its new AI bill to take effect in early 2026. Your business needs a way to stay informed and act quickly.
Tiered Map: AI Regulations by State (as of June 2025)
We’ve grouped states into four tiers based on the status and business relevance of their AI regulations. Let’s start with those that already have laws on the books.
Tier 1: Enacted AI-Specific Laws or Regulations that Impact Businesses
These states have passed laws that directly affect hiring, benefits, employee data, claims decisions, and the use of AI at work.
State | Key AI Laws | Business Impact |
California | AB303, SB 243, SB942, AB2013 + SB1001, CCPA/CPRA | AI disclosures in healthcare, hiring, ads, profiling opt-outs, pricing |
Colorado | SB21-169, SB24-205, HB1147, CPA | Bias audits, high-risk AI governance, and deepfake ad rules |
Georgia | HB 203 (2023) | Regulates AI tools used in clinical eye assessments |
Hawaii | SB 974 (2023) | Profiling opt-outs, risk assessment, and automated decision-making |
Illinois | AI Video Interview Act, HB3773 (2024) | Hiring transparency, ban zip-code proxy, notice for AI hiring tools |
Maryland | HB1303 (2024) | AI in healthcare, algorithmic fairness in benefit delivery |
Montana | HB178 (2025) | Government AI audits, public disclosure on surveillance |
New York (City) | Local Law 144 (2023) | Hiring algorithm audits and public reporting |
Texas | Responsible AI Governance Act (effective 2026) | Biometric bans, disclosure, and algorithmic bias |
Utah | AI Policy Act (2024) | Requires AI disclosures, oversight registry |
Vermont | H.705 updates (2024) | Consumer protection amendments, including AI systems |
Tier 2: States with Active or Proposed AI Bills Relevant to Businesses
These states have introduced legislation targeting AI in business, but lawmakers have not yet enacted these laws. These bills may still pass or evolve in the future.
State | Notable Activity | Business Impact |
Alaska | SB198 (2024), | Would create an AI policy framework. It could influence future business regulations. |
Arizona | HB2175 (introduced 2025) | AI limits healthcare claim denial |
Arkansas | HB1720 (proposed 2025) | Would impose AI fairness rules in workplace surveillance |
Connecticut | HB5877, SB2, SB447 (2025) | Would ban AI replacing educators, regulate AI in health insurance claims |
Iowa | SF143 (introduced 2025) | Profiling opt-out in hiring, lending, housing, insurance |
Massachusetts | AI Impact Assessment Bill (2025) | Transparency in HR-related AI use, risk audits |
Minnesota | Government AI disclosure bill | Public sector transparency |
New Hampshire | SB485 (pending 2025) | AI labeling in education systems |
New Jersey | Automated decision accountability bill | Would regulate AI in employment and benefits decisions |
North Dakota | AI use task force plus pending legislation | Would guide government tech use |
Oregon | Algorithmic Accountability Act (2024) | Would require risk classification and workplace AI notifications |
South Dakota | HB1191 (2025) | Data and algorithms used in law enforcement |
Washington | Proposed AI Bill of Rights | Equity and transparency in automated decision making |
West Virginia | HB4444 (introduced in 2024) | Would regulate AI hiring tools and candidate screening |
Wisconsin | Tech committee draft bill | Would require public disclosure of workforce AI |
Tier 3: States with General Privacy or Data Laws Applied to AI
These states may or may not have existing AI regulations, but they do have privacy or consumer protections relevant to business needs.
State | Relevant Law(s) | Applicability |
Delaware | Delaware Personal Data Privacy Act | Opt-out of automated profiling, DPIAs for high-risk HR decisions |
Connecticut | CTPA (2023) | Similar rules for profiling opt-outs and risk assessment |
Idaho | SB1067 (proposed) | Would exempt AI from regulation via free speech framing |
Nevada | Nevada Privacy Law | Profiling opt-out, risk review for automated decisions |
Ohio | Ohio Data Protection Act | Covers employee data and automated profiling |
Pennsylvania | Pending privacy law | Would apply opt-out and risk assessment to HR profiling |
Virginia | Consumer Data Protection Act (2023) | Applies DPIAs and opt-out to business/employee profiling |
Tier 4: Remaining States
States with AI task forces or study groups:
- Indiana
- North Carolina
- South Carolina
Emerging trend (election deepfakes, task force):
- Alabama
- Florida
- Michigan
- Tennessee
States with no known AI policy activity as of June 2025:
- Kansas
- Kentucky
- Louisiana
- Mississippi
- Missouri
- Nebraska
- New Mexico
- Oklahoma
- Rhode Island
- Wyoming
- Washington D.C.
The Bottom Line: AI Compliance is a Moving Target
What’s legal today might be outdated tomorrow. That’s why HR teams need systems for staying ahead. Whether you’re reviewing hiring algorithms or handling employee data, the rules are shifting fast and often without much notice.
The information here gives you a baseline. When your team understands where and how you use AI, they can better manage risks and avoid surprises.
Need a way to educate without overwhelming? Microsites and explainer videos can break down the rules by state, tool, or team, making compliance a whole lot easier.
https://www.ncsl.org/technology-and-communication/artificial-intelligence-2025-legislation