AI Hiring Regulations Are Coming: How Virginia’s HB 2094 Could Set A National Standard

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Artificial intelligence is transforming hiring, enabling employers to process applications faster and make data-driven decisions. But as AI’s influence in employment grows, so does regulatory scrutiny. Virginia’s HB 2094, the High-Risk Artificial Intelligence Developer and Deployer Act, represents one of the most significant state-level efforts to regulate AI in employment decisions. If enacted, the law would impose transparency requirements, mandate AI impact assessments, and introduce safeguards against algorithmic discrimination.

The Bill’s Path and Political Landscape

HB 2094 narrowly cleared the Virginia legislature, with the House passing it 51-47 and the Senate following at 21-19—both along party lines. Supporters argue that AI regulation is necessary to prevent bias and ensure fairness in hiring, while opponents warn of compliance challenges and potential disruptions for businesses.

The bill has now landed on Governor Glenn Youngkin’s desk, where its future remains uncertain. A former private equity executive, Youngkin has prioritized business-friendly policies and often resists regulatory measures that impose new compliance burdens. Given his track record, a veto is possible. However, regardless of what happens next, Virginia’s move underscores a broader shift: state lawmakers are increasingly focused on AI’s role in hiring, a trend employers cannot afford to ignore.

How HB 2094 Would Change AI Use in Hiring

For employers, the bill’s most significant impact would be on AI-driven hiring tools. The law defines high-risk AI as any system that autonomously makes—or is a substantial factor in making—employment decisions, such as hiring, promotions, terminations, or compensation. Tools that simply assist human decision-making, such as grammar checkers or scheduling software, would not be subject to the law.

If enacted, employers using high-risk AI would need to disclose its use to job candidates and employees when AI influences a consequential decision. If AI contributes to an adverse employment decision, the affected individual must be given an explanation of the AI’s role, the ability to correct inaccuracies in their data, and an opportunity for human review of the decision.

The bill also introduces risk management requirements, requiring businesses to conduct impact assessments before deploying high-risk AI systems and whenever they undergo significant modifications. These assessments would evaluate whether the system produces biased or discriminatory outcomes and ensure that companies document their mitigation efforts. Employers would also need to retain records of these assessments for three years.

Enforcement and Compliance Risks

The Virginia Attorney General would be responsible for enforcing the law, with civil penalties ranging from $1,000 to $10,000 per violation. Employers found in violation would have 45 days to correct compliance issues before facing enforcement action.

These penalties highlight the risks for businesses that fail to establish clear AI oversight policies. Companies relying on AI in hiring should be prepared to demonstrate compliance, monitor AI outcomes for bias, and maintain proper documentation—best practices that will become increasingly essential as AI regulations expand across jurisdictions.

Preparing for the Future of AI Regulation

Even if Youngkin vetoes HB 2094, Virginia’s effort is part of a larger national trend. States like Colorado and Illinois have already enacted AI hiring regulations, and federal efforts to establish AI governance frameworks are gaining momentum. Employers using AI in hiring should assume more regulations are coming—if not in Virginia this year, then in other states soon.

Rather than waiting for laws to pass, companies should take proactive steps now:

• Audit AI-driven hiring tools to assess whether they meet the definition of high-risk AI under emerging legislation.
• Ensure AI decisions are explainable and that affected candidates or employees have recourse to human review.
• Implement bias monitoring to prevent discriminatory outcomes and document compliance efforts.
• Engage with AI vendors to understand how their systems function and whether they align with regulatory expectations.

While HB 2094’s fate remains undecided, one thing is clear: AI oversight in employment is no longer a question of if, but when. Employers that take steps now to enhance transparency and fairness in their AI-driven hiring processes will be far better positioned for the regulatory landscape ahead.