AI Frontier Institute

Establishes the New York workforce stabilization act; requires certain businesses to conduct artificial intelligence impact assessments on the application and use of such artificial intelligence and to submit such impact assessments to the department of labor prior to the implementation of the artificial intelligence; establishes a surcharge on certain corporations that use artificial intelligence or data mining or have greater than a threshold number of employees displaced by artificial intelligence of a rate of 2% of the corporation's business income base; defines data mining.

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The New York Workforce Stabilization Act (A. 5429-A) makes two major changes to New York law. First, it adds Labor Law § 201-j, requiring non-small businesses with more than 100 employees to conduct an AI impact assessment before deploying any artificial intelligence system. The assessment must cover the AI's objectives, its ability to meet those objectives, underlying algorithms and training data, data privacy practices, and estimates of current and anticipated employee displacement. Assessments must be submitted to the Department of Labor at least 30 days before implementation and repeated at least every two years or before any material change to the system. Second, it adds Tax Law § 186-h, imposing two separate 2% surcharges on a corporation's business income base: (1) a worker displacement surcharge on corporations that terminate or substantially reduce hours for a threshold number of employees due to AI, automation, or robotic systems (thresholds range from 25 employees for firms with 100–250 workers up to 250 employees for firms with 1,001 or more workers), and (2) a data mining surcharge on corporations using AI for pattern-based queries or searches of electronic databases. The commissioner, in consultation with the Department of Labor, may waive the displacement surcharge for businesses facing labor shortages, agricultural producers, or small businesses demonstrating economic necessity. Surcharge revenues must be deposited separately and paid to the Department of Labor for worker retraining programs, workforce development, or the unemployment insurance fund. The labor law provisions take effect immediately; the tax surcharges take effect January 1, 2026.

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