S.F. 2414 Section 1. Section 10A.202, subsection 2, Code 2026, is 1 amended to read as follows: 2 2. The department is responsible for the administration of 3 the laws of this state under chapters 88A , 88B , 89 , 89A , 90A , 4 91A , 91C , 91D , 91E , 91F, and 92 , and such other labor-services 5 duties assigned to the department or director. 6 Sec. 2. Section 10A.204, subsection 3, Code 2026, is amended 7 to read as follows: 8 3. The director, in consultation with the labor 9 commissioner, shall, at the time provided by law, make an 10 annual report to the governor setting forth in appropriate 11 form the business and expense of the division and department 12 under this subchapter for the preceding year, the number 13 of remedial actions taken under chapter 89A , the number of 14 disputes or violations processed by the division or department 15 and the disposition of the disputes or violations, and other 16 matters pertaining to the division or department under this 17 subchapter which that are of public interest, together with 18 recommendations for change or amendment of the laws in this 19 chapter and chapters 88 , 88A , 88B , 89 , 89A , 89B , 90A , 91A , 91C , 20 91D , 91E , 91F, and 92 , and sections 85.67A and 85.68 , and the 21 recommendations, if any, shall be transmitted by the governor 22 to the first general assembly in session after the report is 23 filed. 24 Sec. 3. NEW SECTION . 91F.1 Definitions. 25 For purposes of this section, unless the context otherwise 26 requires: 27 1. “Artificial intelligence” means an engineered or 28 machine-based system that varies in its level of autonomy and 29 that can, for explicit or implicit objectives, infer from input 30 received how to generate outputs that can influence physical 31 or virtual environments. 32 2. “Authorized representative” means any person or 33 organization appointed by the employee to serve as an agent of 34 the employee. “Authorized representative” does not include an 35 -1- LSB 6736XS (3) 91 je/js 1/ 9

S.F. 2414 employee’s employer. 1 3. “Automated decision system” means any computational 2 process derived from machine learning, statistical modeling, 3 data analytics, or artificial intelligence that issues 4 simplified output, including a score, classification, or 5 recommendation, that is used to assist or replace human 6 discretionary decision making and materially impacts natural 7 persons. “Automated decision system” does not include a spam 8 electronic mail filter, firewall, antivirus software, identity 9 and access management tool, calculator, database, dataset, or 10 other compilation of data. 11 4. “Automated decision system output” means any information, 12 data, assumptions, predictions, scoring, recommendations, 13 decisions, or conclusions generated by an automated decision 14 system. 15 5. “Department” means the department of inspections, 16 appeals, and licensing. 17 6. “Employee” means any natural person who provides services 18 for compensation for an employer in any workplace. “Employee” 19 includes an independent contractor. 20 7. “Employee data” means any information that identifies, 21 relates to, or describes an employee, regardless of how the 22 information is collected, inferred, or obtained. 23 8. “Employer” means any person who directly or indirectly, 24 or through an agent or any other person, employs or exercises 25 control over the wages, benefits, other compensation, hours, 26 working conditions, access to work or job opportunities, or 27 other terms or conditions of employment of any employee in this 28 state. “Employer” includes a person who contracts for labor on 29 behalf of an employer. 30 9. “Employment-related decision” means any decision by 31 an employer that materially impacts an employee’s wages, 32 benefits, compensation, work hours, work schedule, performance 33 evaluation, hiring, discipline, promotion, termination, job 34 tasks, skill requirements, work responsibilities, assignment of 35 -2- LSB 6736XS (3) 91 je/js 2/ 9

S.F. 2414 work, access to work and training opportunities, productivity 1 requirements, or workplace health and safety. 2 10. “Quota” means a work standard under which an employee 3 is assigned or required to perform at a specified productivity 4 speed, to perform a quantified number of tasks, or to handle 5 or produce a quantified amount of material, within a defined 6 time period and under which the employee may suffer an adverse 7 employment action if the employee fails to complete the 8 performance standard. 9 Sec. 4. NEW SECTION . 91F.2 Automated decision systems —— 10 advance notice. 11 1. An employer shall provide a written notice that an 12 automated decision system is in use for the purpose of making 13 employment-related decisions, other than hiring decisions, at 14 the workplace to an employee who will foreseeably be directly 15 affected by the automated decision system, or the employee’s 16 authorized representative. The employer shall provide the 17 notice by the following dates: 18 a. At least thirty days before an automated decision system 19 is first deployed by the employer. 20 b. If the employer is using an automated decision system 21 to assist in making employment-related decisions as of the 22 effective date of this Act, no later than January 1, 2027. 23 c. To a new employee within thirty days of hiring the 24 employee. 25 2. A notice provided pursuant to subsection 1 shall contain 26 all of the following information: 27 a. The type of employment-related decisions potentially 28 affected by the automated decision system. 29 b. A general description of the categories of employee-input 30 data the automated decision system will use, the sources of 31 employee input data, and how employee input data will be 32 collected. 33 c. Any key parameters known to disproportionately affect the 34 output of the automated decision system. 35 -3- LSB 6736XS (3) 91 je/js 3/ 9

S.F. 2414 d. The individuals, vendors, or entities that created the 1 automated decision system. 2 e. If applicable, a description of each quota set or 3 measured by an automated decision system to which the employee 4 is subject, including the quantified number of tasks to be 5 performed or products to be produced, and any potential adverse 6 employment action that could result from failure to meet the 7 quota, as well as whether those quotas are subject to change 8 and if any notice is given of changes in quotas. 9 f. A description of the employee’s right to access and 10 correct the employee’s data used by the automated decision 11 system. 12 g. That the employer is prohibited from retaliating against 13 employees for exercising the rights provided in this chapter. 14 3. A written notice required by subsection 1 shall 15 be written in plain language as a separate, stand-alone 16 communication. The notice shall be in the language in which 17 routine communications and other information are provided to 18 employees. The notice shall be provided via a simple and 19 easy-to-use method, including but not limited to an email, 20 electronic link, or other written format. 21 4. If an employer will use an automated decision system 22 in making hiring decisions for a position, the employer shall 23 notify an applicant for the position, upon receiving the 24 application, that the employer utilizes an automated decision 25 system when making hiring decisions. The employer may make the 26 notification using an automatic reply mechanism or on a job 27 posting. 28 5. An employer shall maintain an updated list of all 29 automated decision systems currently in use by the employer to 30 facilitate implementation of this section. 31 Sec. 5. NEW SECTION . 91F.3 Employer requirements. 32 1. An employer shall not use an automated decision system to 33 do any of the following: 34 a. Prevent compliance with or violate any federal, state, 35 -4- LSB 6736XS (3) 91 je/js 4/ 9

S.F. 2414 or local labor, occupational health and safety, employment, or 1 civil rights laws or regulations. 2 b. Infer an employee’s protected status under chapter 216. 3 c. Identify, profile, predict, or take adverse action 4 against an employee for exercising the employee’s legal rights, 5 including but not limited to rights guaranteed by state and 6 federal employment and labor laws. 7 d. Collect employee data for a purpose that is not disclosed 8 pursuant to the notice requirements in section 91F.2. 9 e. Rely solely on an automated decision system when making a 10 discipline, termination, or deactivation decision. 11 2. When an employer relies primarily on output from an 12 automated decision system to make a discipline, termination, or 13 deactivation decision, the employer shall use a human reviewer 14 to review the automated decision system output and compile and 15 review other information that is relevant to the decision, if 16 any. For purposes of this subsection, “other information” may 17 include but is not limited to any of the following: 18 a. Supervisory or managerial evaluations. 19 b. Personnel files. 20 c. Work product of employees. 21 d. Peer reviews. 22 e. Witness interviews, which may include relevant online 23 customer reviews. 24 3. An employer shall not use customer ratings as the only 25 or primary input data for an automated decision system to make 26 employment-related decisions. 27 Sec. 6. NEW SECTION . 91F.4 Automated decision systems —— 28 notice after decision. 29 1. An employer that primarily relied on an automated 30 decision system to make a discipline, termination, or 31 deactivation decision shall provide the affected employee with 32 a written notice at the time the employer informs the employee 33 of the decision. 34 2. A notice provided pursuant to subsection 1 shall contain 35 -5- LSB 6736XS (3) 91 je/js 5/ 9

S.F. 2414 all of the following information: 1 a. The individual to contact for more information about the 2 decision. 3 b. That the employer used an automated decision system to 4 assist the employer in one or more discipline, termination, or 5 deactivation decisions with respect to the employee. 6 c. That the employee has the right to request a copy of the 7 employee’s data used by the automated decision system. 8 d. That the employer is prohibited from retaliating against 9 the employee for exercising the rights provided in this 10 chapter. 11 3. A written notice required by subsection 1 shall 12 be written in plain language as a separate, stand-alone 13 communication. The notice shall be in the language in which 14 routine communications and other information are provided to 15 employees. The notice shall be provided via a simple and 16 easy-to-use method, including but not limited to an email, 17 electronic link, or other written format. 18 Sec. 7. NEW SECTION . 91F.5 Employee access to data. 19 An employee has the right to request a copy of the most 20 recent twelve months of the employee’s own data primarily 21 used by an automated decision system to make a discipline, 22 termination, or deactivation decision. An employer shall 23 provide a copy upon request. An employee is limited to one 24 such request every twelve months. 25 Sec. 8. NEW SECTION . 91F.6 Privacy of personal information. 26 For purposes of safeguarding the privacy rights of 27 consumers, employees, and individuals, when an employer is 28 required to provide employee data pursuant to this chapter, the 29 employer shall provide the data in a manner that anonymizes 30 the personal information of any customer, employee, or other 31 individual. 32 Sec. 9. NEW SECTION . 91F.7 Retaliation prohibited. 33 An employer shall not discharge, threaten to discharge, 34 demote, suspend, or in any manner discriminate or retaliate 35 -6- LSB 6736XS (3) 91 je/js 6/ 9

S.F. 2414 against any employee for using or attempting to exercise the 1 employee’s rights under this chapter, filing a complaint 2 with the department alleging a violation of this chapter, 3 cooperating in an investigation or prosecution of an alleged 4 violation of this chapter, or taking any action to invoke or 5 assist in any manner the enforcement of this chapter. 6 Sec. 10. NEW SECTION . 91F.8 Enforcement —— penalties. 7 1. The department shall enforce this chapter. Such 8 enforcement may include but is not limited to investigating 9 alleged violations, ordering appropriate temporary relief to 10 mitigate a violation, issuing a citation against an employer 11 who violates this chapter, conducting contested case hearings 12 if requested, and bringing a civil action in district court for 13 enforcement. 14 2. An employer who violates this chapter shall be subject 15 to a civil penalty of five hundred dollars, collectible by the 16 department pursuant to subsection 1. 17 3. A person subject to a violation of this chapter may 18 bring an action in district court for appropriate temporary 19 or preliminary injunctive relief, including punitive damages, 20 and reasonable attorney fees and court costs. The department 21 may bring such an action on the person’s behalf pursuant to 22 subsection 1 with the person’s consent. 23 Sec. 11. NEW SECTION . 91F.9 Rules. 24 The department shall adopt rules pursuant to chapter 17A to 25 administer this chapter. 26 Sec. 12. NEW SECTION . 91F.10 Construction of chapter. 27 This chapter shall not be construed to prohibit any employer 28 from complying with regulatory or contractual requirements 29 in the provision of products or services to the federal 30 government. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 This bill relates to automated decision systems used by 35 -7- LSB 6736XS (3) 91 je/js 7/ 9

S.F. 2414 employers. 1 The bill requires an employer to provide a written notice 2 that an automated decision system, as defined in the bill, is 3 in use for the purpose of making employment-related decisions, 4 other than hiring decisions, at the workplace to an employee 5 who will foreseeably be directly affected by the automated 6 decision system. The bill specifies the time period, content, 7 and format of such notices. 8 If an employer will use an automated decision system in 9 making hiring decisions for a position, the bill requires 10 the employer to notify an applicant for the position, upon 11 receiving the application, that the employer utilizes an 12 automated decision system when making hiring decisions. 13 The bill specifies various prohibited uses of automated 14 decision systems by employers relating to employee rights. 15 When an employer relies primarily on output from an 16 automated decision system to make a discipline, termination, 17 or deactivation decision, the bill requires the employer to 18 use a human reviewer to review the automated decision system 19 output and compile and review other specified information that 20 is relevant to the decision, if any. 21 The bill prohibits an employer from using customer ratings 22 as the only or primary input data for an automated decision 23 system to make employment-related decisions. 24 The bill requires an employer that primarily relied on an 25 automated decision system to make a discipline, termination, 26 or deactivation decision to provide the affected employee with 27 a written notice at the time the employer informs the employee 28 of the decision. The bill specifies the content and format of 29 the notice. 30 The bill provides that an employee shall have the right to 31 request a copy of the most recent 12 months of the employee’s 32 own data primarily used by an automated decision system to 33 make a discipline, termination, or deactivation decision. An 34 employer shall provide a copy upon request. An employee is 35 -8- LSB 6736XS (3) 91 je/js 8/ 9

S.F. 2414 limited to one such request every 12 months. 1 For purposes of safeguarding the privacy rights of 2 consumers, employees, and individuals, when an employer is 3 required to provide employee data pursuant to the bill, the 4 employer is required to provide the data in a manner that 5 anonymizes the personal information of any customer, employee, 6 or other individual. 7 The bill prohibits an employer from discharging, threatening 8 to discharge, demoting, suspending, or in any manner 9 discriminating or retaliating against any employee for using 10 or attempting to exercise the employee’s rights under the 11 bill, filing a complaint alleging a violation of the bill, 12 cooperating in an investigation or prosecution of an alleged 13 violation, or taking any action to invoke or assist in any 14 manner the enforcement of the bill. 15 The bill is enforced by the department of inspections, 16 appeals, and licensing (department). Such enforcement may 17 include but is not limited to investigating alleged violations, 18 ordering appropriate temporary relief to mitigate a violation, 19 issuing a citation against an employer who violates the bill, 20 conducting contested case hearings if requested, and bringing a 21 civil action for enforcement. 22 An employer who violates the bill shall be subject to a civil 23 penalty of $500, collectible by the department. 24 A person subject to a violation of the bill may bring 25 an action in district court for appropriate temporary or 26 preliminary injunctive relief, including punitive damages, and 27 reasonable attorney fees and court costs. The department may 28 bring such an action on the person’s behalf with the person’s 29 consent. 30 The bill shall not be construed to prohibit any employer from 31 complying with regulatory or contractual requirements in the 32 provision of products or services to the federal government. 33 -9- LSB 6736XS (3) 91 je/js 9/ 9