A state law, known as the LOADinG Act, is facing criticism for its potential to exacerbate New York City's budget deficit by limiting the adoption of artificial intelligence in government operations. Initially enacted in 2023 as a bill to promote transparency and accountability in the use of AI by state agencies, the law has been amended to include significant protections for government employees.
The current iteration of the LOADinG Act, which was extended to cover city employees in February 2026, effectively prohibits public agencies from using AI in ways that could displace employees, reduce their hours, cut pay or benefits, or transfer tasks currently performed by workers to automated systems. This broad protection applies to nearly all public employers in New York State, including school districts, SUNY, CUNY, and various levels of local government.
While the law does not outright ban AI, its provisions are seen as preventing agencies from reorganizing bureaucracies or automating routine, high-volume tasks. Critics argue that this hinders the potential for AI to boost government productivity and reduce costs. The law creates a statutory basis for public-sector unions to file grievances or improper-practice charges if an agency's AI implementation impacts unionized jobs. This could lead to disputes similar to one in Nassau County, where a union challenged the introduction of automated systems that affected members' overtime.
The lack of clear definitions for key terms like "displacement" and "duties and functions currently performed" places the burden on agencies to interpret the law broadly, potentially leading to a cautious approach that avoids any automation impacting union jobs. This risk aversion could prevent agencies from realizing significant savings and weaken the case for investing in AI technology. Agencies may incur costs for AI software and training but be unable to reorganize work in ways that would offset these expenses or generate savings.
The law's job protections are currently set to expire in July 2028, unless renewed by the state legislature. Critics contend that the statute, which began as a measure for public trust in AI, has evolved into a mechanism that effectively requires organized labor's approval for AI adoption in government, potentially costing New York City and the state significant financial benefits.