bill setting rules for AI hiring tools

The text as introduced · 741 words

By: Johnson
S.B. No. 2991

A BILL TO BE ENTITLED

AN ACT

relating to the use of an automated employment decision tool by an

employer to assess a job applicant's fitness for a position;

imposing an administrative penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Title 2, Labor Code, is amended by adding

Subtitle F to read as follows:

SUBTITLE F. PROVISIONS REGARDING JOB APPLICANT SCREENING

CHAPTER 95. USE OF AUTOMATED EMPLOYMENT DECISION TOOL

Sec. 95.001. DEFINITIONS. In this chapter:

(1) "Algorithm" means a computerized procedure

consisting of a set of steps used to accomplish a determined task.

(2) "Applicant" means a person applying for a job

offered by an employer.

(3) "Artificial intelligence system" means a system of

machine learning and related technologies that use data to train

statistical models for the purpose of enabling computer systems to

perform tasks normally associated with human intelligence or

perception, such as computer vision, speech or natural language

processing, and content generation.

(4) "Automated employment decision tool" means a

computational process or software application that uses

algorithms, machine learning, statistical modeling, data

analytics, or an artificial intelligence system to assess an

applicant's fitness for a position.

(5) "Employer" has the meaning assigned by Section

61.001.

Sec. 95.002. USE OF AUTOMATED EMPLOYMENT DECISION TOOL.

(a) An employer may not use or deploy, or authorize a third party to

use or deploy, an automated employment decision tool in violation

of this chapter or a rule adopted under this chapter.

(b) It is a violation of this chapter for an employer to use

an automated employment decision tool that includes, as a factor in

the assessment of fitness for purposes of recruitment, hiring,

promotion, renewal of employment, selection for training or

apprenticeship, discharge, discipline, tenure, or the terms,

privileges, or conditions of employment, status in a protected

class under state or federal law, or the residential zip code of the

applicant.

Sec. 95.003. DISCLOSURE AND CONSENT REQUIRED. An employer

may not use an automated employment decision tool in regard to an

applicant unless the employer:

(1) notifies the applicant that an automated

employment decision tool may be used to assess the applicant's

fitness for the position;

(2) provides the applicant with information

describing how the automated employment decision tool will be used

to assess the applicant's fitness for the position, including what

characteristics may be evaluated for that purpose; and

(3) before using the automated employment decision

tool, obtains the applicant's written consent for that use.

Sec. 95.004. SHARING OF AUTOMATED EMPLOYMENT DECISION TOOL

ASSESSMENT. An employer may not share an assessment of an applicant

made by an automated employment decision tool authorized under this

chapter with any person other than a person whose knowledge and

skill is necessary in order to ensure the tool is correctly

processing the applicant's data.

Sec. 95.005. DESTRUCTION OF AUTOMATED EMPLOYMENT DECISION

TOOL ASSESSMENT. (a) Not later than the 30th day after the date an

employer uses an automated employment decision tool to assess an

applicant's fitness for a position as authorized under this

chapter, an employer must:

(1) make all reasonable efforts to destroy any hard

copy and erase any electronic data file of the assessment; and

(2) instruct any other person with whom the employer

shared the assessment under Section 95.004 to make all reasonable

efforts to destroy any hard copy and erase any electronic data file

of the assessment.

(b) A person who is instructed by an employer to destroy an

assessment under Subsection (a)(2) shall, as soon as practicable,

make all reasonable efforts to destroy any hard copy and erase any

electronic data file of the assessment.

Sec. 95.006. ENFORCEMENT; ADMINISTRATIVE PENALTY. (a) An

applicant who has reason to believe that an employer has violated

this chapter or a rule adopted under this chapter may file a

complaint with the commission.

(b) On receipt of a complaint under this section, the

commission shall investigate and dispose of the complaint in the

manner prescribed by Subchapter F, Chapter 21, for a complaint of an

unlawful employment practice under that chapter.

(c) The commission shall assess an administrative penalty

in an amount that is not less than $2,500 and not more than $7,500

against an employer for each violation of this chapter or a rule

adopted under this chapter.

Sec. 95.007. RULES. The commission shall adopt rules for

the administration of this chapter.

SECTION 2. This Act takes effect September 1, 2025.