by Alex Appel, Inside Investigator
June 2, 2026
As unemployment rises in Connecticut, companies are relying on artificial intelligence (AI) to manage a flood of job applications.
“Generative AI has made it far easier for job applicants to write tailored cover letters and resumes. Combined with a weaker labor market that is driving competition for every position, this has led to a surge in job application volume for companies. Faced with this deluge, companies are responding by using AI to initially screen applications and even conduct early round interviews,” the Office of the State Comptroller (OSC)’s most recent Connecticut Economic Update states.
Unemployment rose from 4.8% to 5% in April, according to the Connecticut Department of Labor’s most recent employment report.
The culprit isn’t government layoffs or businesses closing—it’s that new people entering the workforce are struggling to find jobs, OSC Economist Michelle Parlos said at the monthly Connecticut Economic Update presentation on Monday. The use of AI in the job hiring process has led to concerns about applications being dismissed without proper consideration.
This legislative session, lawmakers passed “An Act Concerning Online Safety,” which includes a provision that would require companies to disclose if they are using AI to process applications, starting on October 1, 2027. This act also clarifies that companies can still be held liable for discrimination in hiring, even if they are using AI to sort through applicants.
“The onus is on companies to ensure their AI systems (or those of their vendors) are not biased based on any classes protected under Connecticut law (e.g., race, age, gender identity, religion),” the report states. “The law ensures that Connecticut job applicants will know when they’re interacting with AI, what the AI systems are being used for, and who they can contact with questions. At the same time, companies can continue using these productivity-enhancing tools, as long as they are not discriminatory.”
This was one of the five most “consequential” pieces of legislation that were passed this session, according to State Comptroller Sean Scanlon.
“In addition to some basic AI regulations, the law includes a wide range of initiatives to support Connecticut’s workforce and economy as we navigate disruptions caused by AI in the years ahead,” the report states.
These initiatives include expanding on existing state-run workforce training programs to train students and new employees in “in-demand AI skills.”
“College students are graduating into a “low hire” environment of businesses looking to technology to help reduce costs,” the report states. “While the AI boom is great for Wall Street investors, it’s uncertain whether full AI adoption by companies will make Connecticut workers broadly better or worse-off. The reality is likely to be mixed.”
The new law also implemented whistleblower protections for AI developers who report “catastrophic safety risks,” limits how social media algorithms can interact with minors, and creates a pilot program to see how effective third-party independent verifications are in ensuring compliance with state laws about AI and data privacy.
The other four areas of legislation that were mentioned in the June Economic Update were: a state-run graduate student loan program; the $300 million placed in the Early Childhood Endowment Fund; changes to the Hospital Tax; and a handful of other tax changes, including ones related to research and development, and a Caregiver Tax Credit.
“While we saw this as sort of a mid-term adjustment year, there were some significant adjustments that were made,” State Comptroller Sean Scanlon said at the monthly Connecticut Economic Update.
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