S 8872: Prohibits algorithmic wage-setting; provides for exceptions; provides for penalties for violation; creates a private right of action.

  
  STATE OF NEW YORK ________________________________________________________________________ 8872  IN SENATE January 13, 2026 ___________ Introduced by Sen. MAY -- read twice and ordered printed, and when printed to be committed to the Committee on Labor AN ACT to amend the labor law, in relation to prohibiting algorithmic wage-setting The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The labor law is amended by adding a new article 20-D to 2 read as follows: 3 ARTICLE 20-D 4 ALGORITHMIC WAGE-SETTING 5 Section 750. Definitions. 6 751. Prohibition of algorithmic wage-setting. 7 752. Publication of procedures. 8 753. Rules and regulations. 9 754. Application of other laws. 10 755. Enforcement; civil penalties; private right of action. 11 § 750. Definitions. For the purposes of this article, the following 12 terms shall have the following meanings: 13 1. "Automated decision system" means a system, software, or process 14 that uses computation, the result of which is used to assist or replace 15 human decision-making, including, but not limited to, a system, soft- 16 ware, or process derived from machine learning, statistics, or other 17 data processing or artificial intelligence techniques. 18 2. "Algorithmic wage-setting" means using an automated decision system 19 to inform individualized wages based on surveillance data regarding an 20 employee, including but not limited to, the use of real-time data to 21 automate workforce compensation structures, or to automate wage calcu- 22 lations. "Algorithmic wage-setting" shall not include an employer's 23 decision not to hire an individual who has not previously been an 24 employee of such employer directly or through such employer's affiliates 25 or subsidiaries. 26 3. "Surveillance data" means data obtained through observation, infer- 27 ence, or surveillance of an employee that is related to personal charac- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14419-02-6 
 S. 8872 2 1 teristics, behaviors, or biometrics of such employee, or a group, band, 2 class, or tier in which such employee belongs. 3 § 751. Prohibition of algorithmic wage-setting. 1. No employer shall 4 engage in algorithmic wage-setting. 5 2. An employer shall be deemed not to have engaged in algorithmic 6 wage-setting otherwise prohibited pursuant to subdivision one of this 7 section if such employer demonstrates that: 8 (a) such employer offers individualized wages based solely on: 9 (i) data specific to individual employees that is directly related to 10 the tasks such employees are hired to perform; or 11 (ii) differences in the cost to the employees of providing labor for 12 such employer; and 13 (b) such employer discloses in plain language before hiring employees 14 to perform work, and to all employees whose wages are set in whole or in 15 part through an automated decision system, what data is considered and 16 how such automated decision system considers such data. 17 § 752. Publication of procedures. Pursuant to procedures as shall be 18 specified by the attorney general, an employer that uses an automated 19 decision system to assist or replace human decision-making related to 20 wages or prices, as authorized pursuant to subdivision two of section 21 seven hundred fifty-one of this article, shall develop and publish 22 reasonable procedures: 23 1. to ensure the accuracy of all data considered by such automated 24 decision system; 25 2. to allow an employee to correct or challenge the accuracy of data 26 considered by such automated decision system; and 27 3. for employees to request and receive information regarding what 28 data is considered and how automated decision-making considered such 29 data when setting particular wages. 30 § 753. Rules and regulations. The attorney general shall adopt rules 31 and regulations necessary for the implementation of the provisions of 32 this article. 33 § 754. Application of other laws. The provisions of this article shall 34 not supersede or invalidate any other laws of this state to the contra- 35 ry. 36 § 755. Enforcement; civil penalties; private right of action. 1. (a) 37 An employer who violates any provision of this article shall be liable 38 for a civil penalty not to exceed ten thousand dollars for each 39 violation. A violation with respect to each employee shall constitute a 40 separate violation. 41 (b) Civil penalties collected pursuant to paragraph (a) of this subdi- 42 vision shall be paid to the general fund of the state. 43 (c) The attorney general may be awarded costs and attorney fees with 44 respect to the prosecution of any violation pursuant to this section. 45 2. In addition to other remedies provided under law, a person 46 aggrieved by a violation of this article may bring a civil action on 47 behalf of themselves or a group of similarly situated persons to 48 restrain further violations and to recover damages, costs, and reason- 49 able attorney fees, including: 50 (a) the greater of: 51 (i) the amount of actual damages sustained, including prejudgment 52 interest of eight percent per year from the date on which the claim 53 accrued; or 54 (ii) three thousand dollars for each violation of this article, with 55 each violation of this article constituting a separate violation with 56 respect to each employee; or 
 S. 8872 3 1 (b) if it is established by clear and convincing evidence that the 2 employer violating this article engaged in bad faith conduct or inten- 3 tionally violated this article, three times the amount of actual damages 4 sustained. 5 § 2. This act shall take effect on the ninetieth day after it shall 6 have become a law. Effective immediately, the addition, amendment and/or 7 repeal of any rule or regulation necessary for the implementation of 8 this act on its effective date are authorized to be made and completed 9 on or before such effective date.