A New Jersey Senate panel unanimously advanced legislation that would require preapproval for a range of automated digital tools in the workplace and limit the use of electronic monitoring inside and outside of the workplace.

The bill is backed widely by New Jersey labor unions and opposed by business groups who cautioned it could ensnare and penalize companies for routine technology decisions or existing tools. It is one lawmaker’s attempt to blunt the job market impacts of artificial intelligence.

“We have never seen a disruptive piece of technology like this before. You can go back to the steam engine, the internet, the light bulb — pick what you want, and nothing has moved at the speed of AI,” said bill sponsor Sen. Andrew Zwicker (D-Middlesex).

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The bill would bar use of algorithms, models, computations, and other tools employers use to make personnel decisions unless a third-party impact assessment finds they can be used for one of six discrete purposes, like ensuring product quality, administering payroll, or periodically assessing employee performance.

Tools used by public-sector employers, including those that aid the provision of government services, would face the same requirements. There, vendors must pay for impact assessments.

It would ban monitoring employees in nonwork areas like break rooms, wholly bar monitoring outside of the workplace, including through monitoring software on personal devices, and prohibit the use of quotas aided by electronic tools.

Numerous labor unions that testified before the Senate Labor Committee Thursday said new safeguards are needed amid the rapid development of artificial intelligence technologies that are even now being adopted into the workforce.

Kristen Affrime, a staff representative with the Communications Workers of America, said the union’s members are not opposed to new technology.

“The issue is whether workers have basic rights when that technology is used to manage them, monitor them, or make decisions that affect their livelihoods,” Affrime said.

The bill does not define artificial intelligence, and its definitions do not limit its scope to technologies that use AI.

Business groups cautioned the legislation could end up barring the use of a range of payroll, scheduling, and cybersecurity tools as well as technology that has existed for decades.

“Even commonplace tools like Excel spreadsheets can involve statistical analysis or automated processes, but they are fundamentally different from an artificial intelligence system making consequential decisions about hiring, firing, compensation, or promotions,” said Jack Ramirez, a lobbyist for the New Jersey Business and Industry Association.

Zwicker suggested the bill could see changes as it continues to wend its way through the Legislature.

“We’re going to look carefully at definitions and other pieces of this bill as it moves forward, but today we are saying New Jersey is becoming a national leader in how we are going to look at and regulate AI in the workforce,” he said.

The panel discussed, but did not vote on, separate legislation that would create a new fund to pay for workforce retraining, renewable energy projects needed for AI infrastructure, and projects in areas impacted by AI.

The fund would be filled by a 5% tax on gross revenue — not profit — from AI operations and fines on firms that do not annually report water and energy use, enter into community benefits agreements, or conduct environmental impact assessments.

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