Text of IN HB 1421 (2026)

Introduced Version HOUSE BILL No. 1421 _____ DIGEST OF INTRODUCED BILL Citations Affected: IC 22-5-10.4. Synopsis: Ban on employer use of automated decision systems. Prohibits an employer from: (1) relying exclusively on an automated decision system in making an employment related decision with respect to a covered individual; (2) using an automated decision system output in making an employment related decision with respect to a covered individual unless certain conditions are met; and (3) discriminating or retaliating against a covered individual for exercising rights under these provisions. Sets forth disclosure requirements for an employer that uses or intends to use an automated decision system output in making an employment related decision. Allows the department of labor to take certain enforcement actions. Allows a covered individual or labor organization to bring a civil action for a violation. Effective: July 1, 2026. Harris January 8, 2026, read first time and referred to Committee on Employment, Labor and Pensions. 2026 IN 1421—LS 6608/DI 141 Introduced Second Regular Session of the 124th General Assembly (2026) PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type. Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution. Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2025 Regular Session of the General Assembly. HOUSE BILL No. 1421 A BILL FOR AN ACT to amend the Indiana Code concerning labor and safety. Be it enacted by the General Assembly of the State of Indiana: 1 SECTION 1. IC 22-5-10.4 IS ADDED TO THE INDIANA CODE 2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE 3 JULY 1, 2026]: 4 Chapter 10.4. Use of Automated Decision System for 5 Employment Related Decisions 6 Sec. 1. As used in this chapter, "automated decision system" 7 means a system, software, or process, including a system, software, 8 or process derived from machine learning, statistics, or other data 9 processing or artificial intelligence techniques, that: 10 (1) uses computation, in whole or in part, to: 11 (A) determine outcomes; 12 (B) make or aid decisions, including through evaluations, 13 metrics, or scoring; 14 (C) inform policy implementation; or 15 (D) collect data or observations; and 16 (2) is not passive computing infrastructure. 17 Sec. 2. As used in this chapter, "automated decision system 2026 IN 1421—LS 6608/DI 141 2 1 output" means any information, assumption, prediction, score, 2 recommendation, decision, evaluation, metric, conclusion, 3 inference, or profile generated by an automated decision system. 4 Sec. 3. As used in this chapter, "candidate", with respect to an 5 employer, means an individual who applies or has applied to be 6 employed by or otherwise perform work for remuneration for the 7 employer. 8 Sec. 4. As used in this chapter, "covered individual", with 9 respect to an employer, means an individual who is: 10 (1) employed by or otherwise performing work for 11 remuneration for the employer; or 12 (2) a candidate with respect to the employer. 13 Sec. 5. As used in this chapter, "department" refers to the 14 department of labor created by IC 22-1-1-1. 15 Sec. 6. As used in this chapter, "employ" has the meaning set 16 forth in Section 203 of the federal Fair Labor Standards Act of 17 1938, as amended (29 U.S.C. 203). 18 Sec. 7. (a) As used in this chapter, "employer" means the 19 following: 20 (1) A sole proprietor, corporation, partnership, limited 21 liability company, or other entity that: 22 (A) employs; or 23 (B) otherwise engages for the performance of work for 24 remuneration; 25 eleven (11) or more covered individuals. 26 (2) A state agency (as defined in IC 22-2-20-5). 27 (3) A political subdivision (as defined in IC 36-1-2-13). 28 (b) The term includes: 29 (1) any person who acts, directly or indirectly, in the interest 30 of an employer in relation to any covered individual 31 performing work for remuneration for the employer; and 32 (2) any successor in interest of an employer. 33 (c) The term does not include a labor organization (as defined 34 in IC 22-6-6-5), other than when the labor organization acts as an 35 employer, or anyone acting in the capacity of an officer or agent of 36 the labor organization. 37 Sec. 8. As used in this chapter, "employment related decision" 38 means a decision by an employer with regard to: 39 (1) hiring a covered individual, including any decision with 40 regard to recruiting, screening, interviewing, or selecting a 41 candidate; 42 (2) firing, retaining, taking a disciplinary action against, 2026 IN 1421—LS 6608/DI 141 3 1 demoting, or reassigning duties of a covered individual; or 2 (3) any other term, condition, or privilege of employment or 3 work of the covered individual, such as a decision relating to 4 pay, scheduling, health care or long term care coverage, 5 benefits, work hours, or the promotion of a covered 6 individual. 7 Sec. 9. (a) As used in this chapter, "passive computing 8 infrastructure" means any intermediary technology that does not: 9 (1) influence or determine the outcome of a decision; 10 (2) make or aid in a decision, including through evaluations, 11 metrics, or scoring; 12 (3) inform policy implementation; or 13 (4) collect data or observations. 14 (b) The term includes web hosting, domain registration, 15 networking, caching, data storage, or cybersecurity. 16 Sec. 10. An employer may not: 17 (1) rely exclusively on an automated decision system in 18 making an employment related decision with respect to a 19 covered individual; and 20 (2) use an automated decision system output in making an 21 employment related decision with respect to a covered 22 individual unless: 23 (A) the automated decision system used to generate the 24 automated decision system output has had predeployment 25 testing and validation with respect to: 26 (i) the efficacy of the system; 27 (ii) the compliance of the system with applicable 28 employment discrimination laws, including Title VII of 29 the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), the 30 Age Discrimination in Employment Act of 1967 (29 31 U.S.C. 621 et seq.), Title I of the Americans with 32 Disabilities Act of 1990 (42 U.S.C. 12111 et seq.), Title II 33 of the Genetic Information Nondiscrimination Act of 34 2008 (42 U.S.C. 2000ff et seq.), Section 6(d) of the Fair 35 Labor Standards Act of 1938 (29 U.S.C. 206(d)), Sections 36 501 and 505 of the Rehabilitation Act of 1973 (29 U.S.C. 37 791 and 29 U.S.C. 793), and the Pregnant Workers 38 Fairness Act (42 U.S.C. 2000gg); 39 (iii) the lack of any potential discriminatory impact of 40 the system, including discriminatory impact based on 41 race, color, religion, sex (including pregnancy, sexual 42 orientation, or gender identity), national origin, age, or 2026 IN 1421—LS 6608/DI 141 4 1 disability, and genetic information (including family 2 medical history); and 3 (iv) the compliance of the system with the Artificial 4 Intelligence Risk Management Framework released by 5 the National Institute of Standards and Technology on 6 January 26, 2023, or a successor framework; 7 (B) the automated decision system is, not less than 8 annually, independently tested for discriminatory impact 9 described in clause (A)(iii) or potential biases and the 10 results of the test are made publicly available; 11 (C) the employer has provided the disclosures required 12 under section 11 of this chapter with respect to the use of 13 the automated decision system output; 14 (D) the use is designed for purposes of making the 15 employment related decision; 16 (E) the employer independently corroborates, via 17 meaningful oversight by a human with appropriate and 18 relevant experience, the automated decision system output; 19 (F) not later than seven (7) days after making the 20 employment related decision, the employer provides full, 21 accessible, and meaningful documentation in plain 22 language and at no cost to the covered individual on the 23 automated decision system output, including: 24 (i) a description of the automated decision system used to 25 generate the automated decision system output; 26 (ii) a description and explanation, in plain language, of 27 the input date to the automated decision system used to 28 generate the automated decision system output and a 29 machine readable copy of the data; 30 (iii) a description and explanation of how the automated 31 decision system output was used in making the 32 employment related decision; and 33 (iv) the reasoning for the use of the automated decision 34 system output in the employment related decision; and 35 (G) the employer allows the covered individual to, after 36 receiving the documentation described in clause (F): 37 (i) dispute, in a manner that is accessible, equitable, and 38 does not pose an unreasonable burden on the covered 39 individual, the automated decision system output to a 40 human with appropriate and relevant experience; and 41 (ii) appeal the employment related decision to a human 42 with appropriate and relevant experience who is not the 2026 IN 1421—LS 6608/DI 141 5 1 human for purposes of the corroboration under clause 2 (E). 3 Sec. 11. (a) An employer that uses or intends to use an 4 automated decision system output in making an employment 5 related decision with respect to a covered individual shall, in 6 accordance with subsections (b) and (c), disclose to the covered 7 individual: 8 (1) that the employer uses or intends to use an automated 9 decision system output in making an employment related 10 decision; 11 (2) a description and explanation of the automated decision 12 system used or intended to be used to generate the automated 13 decision system output, including: 14 (A) the types of data collected or intended to be collected 15 as inputs to the automated decision system and the 16 circumstances of the collection; 17 (B) the characteristics that the automated decision system 18 measures or is intended to measure, such as the knowledge, 19 skills, or abilities of the covered individual; 20 (C) how the characteristics relate or would relate to any 21 function required for the work or potential work of the 22 covered individual; 23 (D) how the system measures or is intended to measure the 24 characteristics; and 25 (E) how the covered individual can interpret the 26 automated decision system output in plain language; 27 (3) the identity of the covered individual or entity that 28 operates the automated decision system that provides the 29 automated decision system output; 30 (4) how the employer uses or intends to use the automated 31 decision system output in making the employment related 32 decision; and 33 (5) how the covered individual may dispute or appeal an 34 employment related decision made with respect to the covered 35 individual using an automated decision system output. 36 (b) An employer shall provide the disclosures required by 37 subsection (a) to a covered individual as follows: 38 (1) In the case of a covered individual who was hired on or 39 before July 1, 2026, the disclosure must be provided to the 40 covered individual not later than August 1, 2026. 41 (2) In the case of a covered individual who is hired after July 42 1, 2026, the disclosure must be provided to the covered 2026 IN 1421—LS 6608/DI 141 6 1 individual before hiring. 2 (c) Not later than thirty (30) days after: 3 (1) any information provided by an employer to a covered 4 individual through a disclosure required by subsection (a) 5 significantly changes; or 6 (2) any significant new information required to be provided 7 in the disclosure becomes available; 8 the employer shall provide the covered individual with an updated 9 disclosure. 10 Sec. 12. An employer that uses or intends to use an automated 11 decision system output in making an employment related decision 12 with respect to a covered individual shall train any individual or 13 entity that operates the automated decision system or uses the 14 automated decision system output on: 15 (1) the input information used by the automated decision 16 system; 17 (2) the appeals process for the automated decision system 18 output; 19 (3) potential biases in automated decision systems; 20 (4) any limitations of the automated decision system; 21 (5) any potential adverse effects to covered individuals due to 22 the automated decision system; 23 (6) any potential adverse effects to covered individuals due to 24 the automated decision system; 25 (7) any potential errors or problems related to the automated 26 decision system; and 27 (8) examples of inappropriate uses of the automated decision 28 system. 29 Sec. 13. An employer that manages a covered individual through 30 an automated decision system shall allow the covered individual to: 31 (1) opt out of the management through the automated 32 decision system; and 33 (2) be managed through a human manager who is able to 34 make employment related decisions with respect to the 35 covered individual. 36 Sec. 14. An employer may not discriminate or retaliate, 37 including through intimidation, threats, coercion, or harassment, 38 against any covered individual: 39 (1) for exercising or attempting to exercise any right provided 40 under this chapter; or 41 (2) because the covered individual or another individual 42 acting at the request of the covered individual has: 2026 IN 1421—LS 6608/DI 141 7 1 (A) filed a written or oral complaint to the employer or a 2 federal, state, or local government entity of a violation of 3 this chapter; 4 (B) sought assistance or intervention with respect to a 5 worker privacy related concern from the employer, a 6 federal, state, or local government, or a worker 7 representative; 8 (C) instituted, caused to be instituted, or otherwise 9 participated in any inquiry or proceeding under this 10 chapter; 11 (D) given, or is about to give, any information in 12 connection with any inquiry or proceeding relating to any 13 right provided under this chapter; or 14 (E) testified, or is about to testify, in any inquiry or 15 proceeding relating to any right provided under this 16 chapter. 17 Sec. 15. (a) The department may do the following: 18 (1) Receive complaints regarding alleged violations of this 19 chapter. 20 (2) Investigate any facts, conditions, practices, or matters as 21 the department deems necessary or appropriate to determine 22 whether an employer has violated this chapter. 23 (3) Require an employer to file with the department, on a 24 form prescribed by the department, annual or special reports 25 or answers in writing to specific questions relating to the use 26 of an automated decision system for employment related 27 decisions. 28 (b) If the department requires an employer to file a report or 29 answers under subsection (a)(3), the employer shall file the report 30 or answers in the manner and time period required by the 31 department. 32 (c) An employer shall maintain, keep, preserve, and make 33 available to the department records pertaining to compliance with 34 this chapter. 35 Sec. 16. (a) Regardless of whether any action is taken by the 36 department under section 15 of this chapter, a: 37 (1) covered individual; or 38 (2) labor organization; 39 that is adversely affected by an alleged violation of this chapter 40 may bring a civil action against any person that violates this 41 chapter. 42 (b) In a civil action brought under subsection (a) in which the 2026 IN 1421—LS 6608/DI 141 8 1 covered individual or labor organization prevails, the court may 2 award any of the following to the covered individual or labor 3 organization: 4 (1) Damages of: 5 (A) an amount equal to the sum of any actual damages 6 sustained by the covered individual or labor organization; 7 or 8 (B) not more than treble damages. 9 (2) Statutory damages described in subsection (d). 10 (3) Injunctive relief. 11 (4) Equitable relief. 12 (5) For a civil action regarding a violation of section 14 of this 13 chapter, temporary relief while the case is pending, including 14 reinstatement. 15 (c) In a civil action brought under subsection (a) in which the 16 covered individual or labor organization prevails, the court shall 17 award the covered individual or labor organization reasonable 18 attorney's fees and costs. 19 (d) The court may, in accordance with subsection (b)(2) and 20 subject to subsections (e) and (f), award statutory damages against 21 a person in the following amounts: 22 (1) For each violation of sections 10 through 13 of this 23 chapter, the court may award: 24 (A) damages of at least five thousand dollars ($5,000) and 25 not more than twenty thousand dollars ($20,000); or 26 (B) for any willful or repeated violation by an employer, 27 damages of at least ten thousand dollars ($10,000) and not 28 more than forty thousand dollars ($40,000). 29 (2) For each violation of section 14 of this chapter, the court 30 may award: 31 (A) damages of at least five thousand dollars ($5,000) and 32 not more than fifty thousand dollars ($50,000); or 33 (B) for any willful or repeated violation, damages of at 34 least ten thousand dollars ($10,000) and not more than one 35 hundred thousand dollars ($100,000). 36 (e) In determining the amount of statutory damages assessed 37 under subsection (d), the court shall consider any relevant 38 circumstances presented by the parties to the action, including: 39 (1) the nature and seriousness of the violation; 40 (2) the number of violations; 41 (3) the persistence of the misconduct; 42 (4) the length of time over which the misconduct occurred; 2026 IN 1421—LS 6608/DI 141 9 1 (5) the willfulness of the misconduct; and 2 (6) the assets, liabilities, and net worth of the employer. 3 (f) The amounts referred to in subsection (d) must be increased 4 annually, for fiscal year 2027 and every fiscal year thereafter, by 5 the percent increase, if any, in the Consumer Price Index for All 6 Urban Consumers for the most recent twelve (12) month period for 7 which applicable data is available. 8 Sec. 17. (a) Before a covered individual or labor organization 9 brings an action under section 16 of this chapter, the covered 10 individual or labor organization shall, in writing, notify the 11 department of the intent to commence the civil action. 12 (b) Upon receiving notice under subsection (a), the department 13 shall, not later than sixty (60) days after receiving the notice: 14 (1) decide whether to intervene in the action; and 15 (2) notify the covered individual or labor organization of the 16 department's decision under subdivision (1). 17 (c) If the department decides to intervene in an action, the court 18 shall allow the department to do the following upon intervening: 19 (1) Be heard on all matters arising in the action. 20 (2) File petitions for appeal of a decision in the action. 21 Sec. 18. The department may adopt rules under IC 4-22-2 to 22 implement this chapter. 2026 IN 1421—LS 6608/DI 141