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By Alonzo Martinez, Senior Contributor
Forbes contributors publish independent expert analyses and insights. Alonzo Martinez reports on employment laws and trends in HR tech.
Readers can follow the author for ongoing coverage of employment law and HR technology developments.
Published on August 10, 2026, at 08:00 AM EDT.
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Lawmakers are broadening their focus beyond the final outcome of hiring decisions. Increasingly, regulatory attention is directed at the upstream side of employment decisions—specifically, how information is created, maintained, and processed before it reaches an employer. This trend touches a variety of policy concerns, including criminal history, credit reports, and potential bias in artificial intelligence.
Several state initiatives illustrate the pattern:
California’s pending AI legislation reinforces the same direction. If enacted, it would require human corroboration and accuracy safeguards for automated hiring tools, ensuring that algorithmic outputs are dependable before they influence hiring decisions.
This upstream shift has broad implications. Because legal interventions now happen earlier in the information lifecycle, they affect which data employers receive and how that data may be used. As a result, the regulatory landscape is being reshaped long before any individual employment decision is made.
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From artificial intelligence to criminal records and consumer credit, seemingly unrelated laws reveal a broader shift in how lawmakers regulate employment decisions.getty
Artificial intelligence. Criminal history. Consumer credit reports. Clean Slate laws. Privacy. At first glance, these subjects appear to have little in common. They arise under different statutes, pursue different policy objectives and often fall within different areas of law.
Viewed together, however, they reveal a broader pattern.
Across recent legislation, lawmakers have responded to very different policy concerns through a similar regulatory method. They are reaching further upstream in the decision-making process, addressing how employment-related information is created, maintained, disclosed, evaluated and processed before an employer ultimately acts on it.
This development builds on another change already underway in employment law. Simple compliance may no longer be enough when the rules themselves demand that employers use their own judgment.
In concrete terms, employers may need to:
Yet the exercise of informed judgment depends on the information available to the decision-maker. Increasingly, that information comes from somewhere else.
Illinois begins its approach at the earliest point in the information lifecycle. The state's Clean Slate legislation focuses on the criminal records system itself, establishing procedures for identifying missing dispositions and correcting incomplete criminal history information, while also expanding the mechanisms available for sealing eligible records. In doing so, Illinois targets two separate issues that can affect employment screening: whether the underlying information is accurate and complete, and whether it should remain publicly available.
Missouri's SB 1421 addresses the second of those questions more directly. Signed into law in July, the legislation creates an automated expungement process for certain qualifying drug offenses and makes the corresponding records confidential. It also requires the state to provide consumer reporting agencies with the information needed to identify and delete affected records. Rather than telling employers how much weight to give an old conviction, Missouri changes whether that conviction continues to appear in the information available to them.
New York moved even further downstream when it enacted restrictions on the use of consumer credit history. The sponsor of S.3072 pointed to two concerns: there is little evidence linking credit history to job performance, and consumer credit reports may contain material errors. As a result, the law generally prohibits employers from requesting or using consumer credit history for employment purposes, subject to specified exceptions. It also limits the inclusion of that information in consumer reports furnished for employment purposes.
The policy choice is significant. Lawmakers did not create a framework directing employers on how to weigh credit history against other qualifications. Instead, they largely removed that category of information from the employment process.
Washington’s expanded Fair Chance Act brings the legal analysis closer to the actual employment decision. The law restricts when employers may obtain criminal history and establishes a process for evaluating certain conviction records after they are received.
Before an employer can take adverse action based on an adult conviction, the law requires:
This approach goes beyond whether criminal record information is available. It also examines how that information is connected to the employment outcome. A criminal record alone does not answer the relevant legal question. The employer must consider the record in relation to the particular position and other surrounding context before acting.
California’s SB 947 raises many of the same questions in the context of artificial intelligence. The pending legislation responds to concerns that automated systems may generate inaccurate, biased, or opaque outputs that affect workers.
Among its provisions, the bill would:
Although these examples address different policy concerns and use different legal mechanisms, together they trace much of the path information takes toward an employment decision. That path runs from the integrity and availability of the underlying records to the way information is evaluated, processed, and ultimately relied upon.
Employment decisions are now typically the final step in a far wider information ecosystem.
A large share of the information that shapes hiring and other employment decisions begins outside the employer's own organization. It often travels through multiple hands before it reaches the decision-maker. Court and government records form the basis of criminal history checks, consumer reporting agencies assemble data from a variety of sources, and HR technology vendors now play a growing role in organizing, analyzing, and even interpreting that data before an employer sees it.
This expanding chain of custody gives lawmakers more points at which to intervene.
A legislature that wants to affect an employment outcome has several options. It can regulate the employer's final decision. Alternatively, it can focus on the accuracy of the underlying records, remove information that is no longer appropriate to circulate, limit access to data with little relevance to employment, require context before information can support a decision, or regulate the technology that handles the data.
The idea of regulating information that influences employment decisions is not new. What is changing is the scope of regulation, which now reaches different stages of the information lifecycle. Artificial intelligence is the most recent and prominent example, but the underlying pattern existed long before AI.
For decades, the Fair Credit Reporting Act has required that information compiled for employment purposes be accurate and used with care. Fair chance laws have progressively limited when employers may ask about or rely on criminal history. Clean Slate laws change what appears in background checks over time, making certain old records unavailable. Privacy laws, in turn, regulate how personal information is collected and transferred.
This perspective can also help assess what lies ahead. A newly introduced bill that affects employment might appear to focus on AI, privacy, criminal history, or another discrete subject. But one of the most revealing questions is where in the information lifecycle lawmakers have chosen to intervene.
None of these developments creates a new legal doctrine, and the examples do not converge on a single policy objective. What they do reveal is a recurring legislative approach across areas of law that are often examined separately.
Employment law has always regulated the decisions employers make and the conduct surrounding those decisions. What appears to be changing is how far upstream lawmakers are willing to act. The information an employer receives, the information that is kept from an employer, the context needed to interpret that information, and the technology used to process it are all increasingly woven into the regulatory framework around the final decision.
Viewed this way, AI regulation, fair chance laws, Clean Slate reforms, consumer reporting requirements, and privacy protections begin to look less like separate legal developments and more like different points of intervention in the same decision-making process.
The employment decision may still be where the consequences are felt. Increasingly, though, the law is doing its work before that decision is ever made.
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