As unemployment rates rise in Connecticut, companies are relying on artificial intelligence (AI) to manage the flood of job applications.
“Generative AI has made it much easier for job seekers to write tailored cover letters and resumes. Coupled with a downturn in the labor market that increases competition for every position, companies are seeing a surge in job applications. In the face of this flood, companies are responding by using AI to screen initial applications and even conduct early-stage interviews,” says the Office of the State Auditor (OSC)’s latest Connecticut Economic Update.
The unemployment rate rose to 5% from 4.8% in April, according to the latest employment report from the Connecticut Department of Labor.
OSC economist Michelle Parlos said Monday during the monthly Connecticut Economic Update presentation that the culprit is not government layoffs or business closures, but rather that new people entering the workforce are having a hard time finding work. The use of AI in the recruitment process has raised concerns that applications may be rejected without proper consideration.
This Congress, lawmakers passed the Online Safety Act. This includes a provision requiring companies to disclose whether they use AI to process applications from October 1, 2027. The law also makes clear that companies can be held liable for employment discrimination even if they use AI to screen applicants.
“Companies are responsible for ensuring that their AI systems (or those of their vendors) are not biased based on classes protected by Connecticut law, such as race, age, gender identity, or religion,” the report states. “This legislation will allow Connecticut job seekers to know when they are interacting with AI, what AI systems are being used for, and who they can contact if they have questions. At the same time, companies can continue to use these productivity tools as long as they are not discriminatory.”
According to State Auditor Sean Scanlon, this is one of the five most “significant” bills passed this Congress.
“In addition to some basic AI regulations, this legislation includes a wide range of initiatives to help Connecticut’s workforce and economy navigate the disruption caused by AI in the coming years,” the report states.
These efforts include expanding existing national workforce training programs to train students and new employees in “in-demand AI skills.”
“College students are graduating into a ‘low-recruitment’ environment with companies looking for technology to help reduce costs,” the report states. “While the AI boom is great for Wall Street investors, it’s unclear whether the full adoption of AI by companies will make the lives of Connecticut’s workers better or worse overall. The reality is likely to be mixed.”
The new law also introduces 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 determine how effective third-party independent verification is in ensuring compliance with state laws on AI and data privacy.
The other four areas of law mentioned in the June Economic Update are: State-run graduate student loan program. $300 million donated to the Early Childhood Fund. Hospital tax changes. Several other tax reforms are also included, including those related to research and development and the caregiver tax credit.
“While we thought this year was a year of kind of a mid-term adjustment, there were also some significant adjustments,” State Comptroller Sean Scanlon said in the monthly Connecticut Economic Update.
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