What Employers Should Know About President Trump's AI Executive Order
On December 11, 2025, President Trump signed an Executive Order titled "Ensuring a National Policy Framework for Artificial Intelligence." It zeroes in on state-level AI rules and sets up an AI Litigation Task Force to challenge laws viewed as inconsistent with the order's goals.
The intent is clear: encourage AI development, lower barriers, reduce conflicting state requirements, and push back on laws seen as embedding "ideological bias" into models. What's unclear is which states or statutes will be targeted, and how quickly those challenges might move.
The State-Law Backdrop
Most employers now use AI somewhere in hiring, recruiting, or onboarding. In response to bias concerns, several states adopted rules to reduce discriminatory outcomes from automated decisions.
California's CCPA, effective January 1, 2026, includes obligations for businesses that use AI without human involvement in employment decisions-such as risk assessments, pre-use notice, and opt-out rights. Similar measures have been passed in Colorado (effective 2026), Illinois (effective 2026), Maryland, and Texas (effective 2026). This patchwork remains in play unless and until a court blocks specific provisions or Congress preempts them.
What Hasn't Changed
The Executive Order does not, by itself, void any state or local AI law. Unless a court issues an injunction or Congress enacts preemptive federal legislation, those laws are enforceable.
For now, employers should keep meeting current state and local obligations while watching for litigation and federal activity that could alter compliance plans.
Action Checklist for Legal and HR Counsel
- Map all AI and automated tools used in employment decisions (sourcing, screening, testing, promotions, scheduling, performance, and termination).
- Flag tools that operate without human involvement, and identify where a human review step can be added for material decisions.
- Complete and document risk/impact assessments aligned to state requirements. Include data sources, validation, bias testing, mitigation steps, and decision thresholds.
- Deliver clear pre-use notices. Where required, offer opt-out and a comparable human or alternative process.
- Tighten vendor contracts: define permitted uses, fairness and testing obligations, version control, audit rights, security, data minimization, and prompt notice of material model changes.
- Configure geolocation-based rules so state-specific notices, opt-outs, and retention limits apply correctly to each worker or applicant.
- Maintain records: assessment reports, testing results, decision logs, model versions, data lineage, and retention schedules.
- Train HR, recruiters, and hiring managers on appropriate AI use, human review, accommodation duties, and adverse impact monitoring.
- Coordinate with privacy, DEI, and labor relations teams. Address union consultation obligations where relevant.
- Evaluate discrimination risk under federal and state law, including disparate impact analysis and reasonable accommodation pathways.
- Track Task Force activity and court challenges. Prepare fallback plans if a state rule is enjoined or if federal preemption arrives.
What to Watch Next
Potential suits by the AI Litigation Task Force against state AI-in-employment statutes. Guidance or enforcement from federal agencies. State rulemaking clarifications, especially around definitions of "automated decisionmaking," thresholds for "material" decisions, and opt-out mechanics.
Effective dates are close, so adjust implementation timelines now. Prioritize high-risk use cases, build human review for consequential decisions, and keep your documentation complete and ready.
Bottom Line
Keep complying with state and local AI requirements. Monitor federal challenges sparked by the Executive Order, and be ready to pivot if courts or Congress shift the rules.
Tight controls, clear notices, thorough testing, and strong vendor obligations will reduce risk while the policy environment sorts itself out.
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