How Connecticut’s New AI Law Will Impact Employers

On May 27, 2026, Connecticut Governor Ned Lamont signed into law Senate Bill 5 (SB5) or the “Connecticut Artificial Intelligence Responsibility and Transparency Act,” which, in part, addresses employers’ use of artificial intelligence (AI). This article provides an overview of key concepts of the law that affect employers and recommendations to ensure compliance by its effective dates.

Effective October 1, 2026, employers who file notices under the federal Worker Adjustment and Retraining Notification (WARN) Act must disclose to the Connecticut Department of Labor whether layoffs are “related” to the employer’s use of AI or other technological changes.

The use of AI in employment decisions is not a defense to a discrimination complaint as of October 1, 2026. The act also amends Connecticut’s Fair Employment Practices Act statute to cover the use of “automated employment-related decision technology” (AEDT) that has a discriminatory effect and provides that an employer may be liable for discrimination if its use of AEDT causes the employer to make an adverse employment decision based on a protected characteristic. In the context of an enforcement proceeding, the law directs the relevant state agency or tribunal to “consider any evidence, or lack of evidence, of anti-bias testing or similar proactive efforts to avoid such discriminatory practice, including, but not limited to, the quality, efficacy, recency and scope of such testing or efforts, the results of such testing or efforts and the response thereto.”

Effective October 1, 2027, employers who use AI/AEDT in employment-related decision processes that interact with an employee or applicant for employment in the state must disclose that the person is interacting with AI, unless a reasonable person would deem it obvious. If the AEDT generates any output “as a substantial factor in making, an employment-related decision concerning an employee or applicant for employment in the state”, the employer must provide written notice of the AEDT’s use, its purpose, the trade name, the categories of personal data processed and how the data is assessed, the sources of the personal data, and contact information for the employer. If such employment-related decision is adverse to such employee or applicant, the employer must provide a “high-level statement disclosing the principal reason or reasons for such adverse employment-related decision, including, but not limited to, (A) the degree to which, and manner in which, the output generated by such automated employment-related decision process contributed to such adverse employment-related decision, (B) the type of data that were processed by such automated employment-related decision process in generating such output, and (C) the source of the data.”

The law also includes whistleblower protection for employees of certain AI developers who report potential AI-related “catastrophic risks” or safety concerns. These AI developers may not discharge, discipline, penalize, or retaliate against covered employees for such reporting.

Enforcement Mechanism:
Violations of this law are deemed unfair or deceptive trade practices pursuant to the Connecticut Unfair Trade Practices Act (CUTPA), enforceable exclusively by the Connecticut Attorney General. There is no private right of action for aggrieved parties. A temporary cure period through December 31, 2027, may be available at the Attorney General’s discretion, if the Attorney General determines that the violation is capable of being cured. If the recipient fails to cure within 60 days from receiving a violation notice from the Attorney General, the Attorney General may bring an action. This cure opportunity is time-limited and applies only to violations within a certain period.

Recommendations:
To ensure compliance with the requirements of SB5, employers should do the following:

• Determine what, if any, AI tools are used in your company’s employment decisions, what tools should be used, whether the tools used require disclosure, and what that disclosure should be before October 1, 2027.

• Educate your human resource and AI/IT professionals as to the requirements of this new law.

• If your company uses AI in its employment decisions, consider anti-bias testing or similar proactive efforts to avoid discriminatory outcomes.

If you have questions about Connecticut’s SB5 or other employment law matters, please contact: Christina Murray (CMurray@dmoc.com)

This information is for educational purposes only, to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.