State legislatures have spent 2026 building out a patchwork of AI regulation that reaches into hiring, health care, and everyday consumer transactions.
Employers operating across state lines now face a compliance map that shifts at every border.
Eleanor T. Chung, Julia Rioux Thayer, and Jean-Claude Velasquez, attorneys at Epstein Becker Green, co-authored "AI Regulation in the US: The New State Laws Employers Can't Ignore" in Ius Laboris. The article examines the growing number of state AI laws that employers need to navigate.
The piece walks through how 2026 state sessions moved AI regulation from an emerging issue to an active compliance obligation across three areas: consumer transparency, health care, and employment. California, Colorado, and Utah continued to expand omnibus transparency and accountability statutes, while a newer wave of laws now targets generative AI systems once they cross certain scale thresholds. In health care, states focused heavily on prior authorization, tightening limits on AI-only coverage denials and requiring human review and documentation to support appeals. A parallel track requires disclosure whenever a patient communication is AI-generated, paired with a guaranteed path to a human alternative.
On the employment side, the authors describe a shift from first-generation disclosure duties to a second generation of auditing, reporting, and anti-discrimination requirements. Illinois, an early mover on AI in hiring, kept refining its framework in 2026, and Connecticut added new AI-related notice duties, including disclosure when workforce reductions rely on AI-assisted decisions. Colorado's Senate Bill 26-189, covering AI used in consequential employment decisions, stood out as one of the year's most closely watched employment AI laws. The piece points readers to Epstein Becker Green's AI Enacted Bills Map, which tracks every state AI law enacted across these three domains.
"AI regulation is now a compliance requirement, not an emerging issue. With the 2026 legislative cycle largely complete, state AI laws are already in effect across consumer transparency, health care, and employment. Businesses operating in multiple states now face enforceable obligations that apply immediately. California, Colorado, Utah, Illinois, and New York remain the most active jurisdictions."
Get in Touch
To learn more about this topic, contact Eleanor Chung at echung@ebglaw.com, Julia Thayer at jthayer@ebglaw.com, or Jean-Claude Velasquez at jvelasquez@ebglaw.com.
