On April 3, 2025, the Office of Management and Budget (“OMB”) issued two Memoranda (Memos) regarding the use and procurement of artificial intelligence (AI) by executive federal agencies. The Memos—M-25-21 on “Accelerating Federal Use of AI through Innovation, Governance, and Public Trust” and M-25-22 on Driving Efficient Acquisition of Artificial Intelligence in Government”—build on President Trump’s Executive Order 14179 of January 23, 2025, “Removing Barriers to American Leadership in Artificial Intelligence.”
The stated goal of the Memos is to promote a “forward-leaning, pro-innovation, and pro-competition mindset rather than pursuing the risk-adverse approach of the previous administration.” They aim to lift “unnecessary bureaucratic restrictions” while rendering agencies “more agile, cost-effective, and efficient.” Further, they will, presumably, “deliver improvements to the lives of the American public while enhancing America’s global dominance in AI innovation.” The Memos rescind and replace the corresponding M-24-10 and M-24-18 memos on use and procurement from the Biden era.
Although these Memos relate exclusively to the activities of U.S. federal agencies with regard to AI, they contain information and guidance with respect to the acquisition and utilization of AI systems that is transferable to entities other than agencies and their AI contractors and subcontractors with respect to developing and deploying AI assets. In this connection, the Memos underscore the importance of responsible AI governance and management and, interestingly, in large measure mirror protocols and prohibitions found in current state AI legislation that governs use in AI by private companies.
As we enter 2025, the rapid growth of artificial intelligence (AI) presents both transformative opportunities and pressing legal challenges, particularly in the workplace. Employers must navigate an increasingly complex regulatory landscape to ensure compliance and avoid liability. With several states proposing AI regulations that would impact hiring practices and other employment decisions, it is critical for employers to stay ahead of these developments.
New York
New York’s proposed legislation, which if passed would become effective January 1, 2027, provides guardrails to New York employers implementing AI to assist in hiring, promoting, or making other decisions pertaining to employment opportunities. Unlike New York City Local Law 144, which covers only certain employment decisions, the New York Artificial Intelligence Consumer Protection Act (“NY AICPA”), A 768, takes a risk-based approach to AI regulation, much like that of Colorado’s SB 24-205. The NY AICPA would specifically regulate all “consequential decisions” made by AI, including those having a “material legal or similarly significant effect” on any “employment or employment opportunity.” The bill imposes compliance obligations on “developers” and “deployers” of high-risk AI decision systems.
Since the dawn of digitalization, the collection and retention of personal and other business confidential data by employers has implicated security and privacy challenges—by amassing a treasure trove of data for bad actors (or unwitting/unauthorized employees) and drawing a roadmap for those seeking to breach the system. Adding artificial intelligence (AI) into the mix creates further areas of concern. A recent survey undertaken by the Society of Human Resource Management of more than 2000 human resources professionals indicates that AI is being utilized by the majority of ...
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