S4458 — Establishes five-year "New Jersey Artificial Intelligence Workforce Transition Act."

SENATE, No. 4458

STATE OF NEW JERSEY

222nd LEGISLATURE

INTRODUCED JUNE 15, 2026

Sponsored by:

Senator ANDREW ZWICKER

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

SYNOPSIS

Establishes five-year "New Jersey Artificial Intelligence Workforce Transition Act."

CURRENT VERSION OF TEXT

As introduced.

An Act establishing the "New Jersey Artificial Intelligence Workforce Transition Act" and amending P.L.1992, c.43.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) This act shall be known and may be cited as the "New Jersey Artificial Intelligence Workforce Transition Act."

2. (New section) The Legislature finds and declares that:

a. Artificial intelligence (AI) technologies are rapidly transforming the labor market across all industries, occupations, and wage levels, creating significant risk of structural unemployment affecting millions of New Jersey workers;

b. History demonstrates that technological disruption without adequate public-private transition infrastructure produces lasting economic harm to workers, communities, and the broader social fabric as evidenced by deindustrialization episodes in the latter half of the twentieth century;

c. The appropriate response to artificial intelligence-driven labor disruption is not to slow innovation, which would reduce New Jersey's economic competitiveness, but to build modern, data-driven workforce transition systems;

d. A new compact between employers, educational institutions, and State government, in which each sector assumes defined responsibilities, is necessary to prepare New Jersey's workforce for an AI-integrated economy;

e. The goal of public policy should be to incentivize augmentation of human workers by AI rather than replacement of human workers by AI, and to ensure that the productivity gains from AI are reinvested in the workforce;

f. Public investment in workforce preparation must be held accountable to measurable labor market outcomes, not merely enrollment figures;

g. AI exposure and AI vulnerability are not the same thing:

(1) research published by the Brookings Institution in January 2026 found that while higher-income, white-collar workers in roles such as software development, financial management, and law face the highest AI exposure rates, they also possess the greatest capacity to adapt to displacement through financial savings, transferable skills, professional networks, and access to dense labor markets;

(2) conversely, the workers most at risk of lasting harm from AI displacement are those with both high exposure and low adaptive capacity, approximately 6.1 million workers nationally, concentrated in clerical and administrative roles including office clerks, secretaries, administrative assistants, receptionists, and medical secretaries, of whom approximately 86 percent are women; and

(3) effective public policy must therefore target support not at exposure alone but at the intersection of exposure and vulnerability;

h. The four factors most predictive of a worker's capacity to adapt to job displacement are:

(1) liquid financial savings, which determine whether a worker can weather a period of unemployment without accepting an inferior job under duress;

(2) age, with workers aged 55 and older facing significantly lower reemployment rates and larger earnings losses following displacement;

(3) geographic labor market density, with workers in smaller and more rural labor markets facing fewer alternative employment opportunities; and

(4) skill transferability, with workers whose skills apply across many occupations experiencing smaller earnings losses following displacement than those with highly specialized, occupation-specific skills; and

i. It is in the public interest of this State to act proactively and establish the institutional frameworks, data infrastructure, funding mechanisms, and employer incentives necessary to prevent foreseeable workforce crises, with particular attention to workers whose combination of high AI exposure and low adaptive capacity makes them most vulnerable to lasting economic harm.

3. (New section) As used in this act:

"Adaptive capacity index" means the annual index published by the commissioner pursuant to subsection c. of section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill) measuring workers' estimated capacity to navigate job displacement by occupation and zip code, based on liquid financial savings, age distribution, geographic labor market density, and skill transferability.

"AI-displaced worker" means any New Jersey resident who has experienced involuntary separation from employment where an employer's adoption, expansion, or material modification of an artificial intelligence system was a but-for cause or a substantial contributing cause of the elimination, reduction, or restructuring of the worker's position.

"AI displacement account" means the dedicated account to fund AI workforce transition programs established within the New Jersey Workforce Development Partnership Fund created pursuant to section 9 of P.L.1992, c.43 (C.34:15D-9).

"Artificial intelligence system" or "AI system" means any machine-based system that processes inputs using algorithms, statistical models, or neural networks to generate outputs such as predictions, recommendations, decisions, or content that materially influence or replace human judgment in performing a job function. The term includes machine learning systems, large language models, generative AI tools, robotic process automation systems, and automated decision-making platforms. The term does not include general-purpose software, standard database management systems, or basic rule-based automation that does not incorporate learning or adaptive capabilities.

"Apprenticeship program" means an earn-while-you-learn training program registered with the Department of Labor and Workforce Development meeting standards equivalent to those established under the National Apprenticeship Act of 1937 (29 U.S.C. s.50 et seq.).

"Commissioner" means the Commissioner of Labor and Workforce Development.

"Department" means the Department of Labor and Workforce Development.

"Director" means the Director of the Division of Taxation.

"Division" means the Division of Wage and Hour Compliance in the Department of Labor and Workforce Development.

"Employer" means any person, firm, corporation, partnership, or other entity employing 100 or more employees, including full-time and part-time employees, in the State, consistent with the employee counting methodology of the "Millville Dallas Airmotive Plant Job Loss Notification Act," P.L.2007, c.212 (C.34:21-1 et seq.), commonly referred to as the State "WARN Act."

"Economic opportunity zone" means a geographic designation pursuant to subsection e. of section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill) that triggers targeted economic development incentives in response to artificial intelligence-driven displacement exceeding defined thresholds.

"High-automation industry" means any industry sector designated by the commissioner pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill) as having experienced artificial intelligence-driven workforce displacement at a rate of five percent or greater of sector employment within any rolling 24-month period.

"High-demand credential" means a certificate, license, or degree, of 18 months or less in duration, in a field designated by the State Employment and Training Commission as experiencing acute labor shortages.

"High-vulnerability occupation" means an occupation designated by the adaptive capacity index established pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill) as combining above-median AI exposure with below-median adaptive capacity.

"Wage insurance" means a temporary income supplement paid to a displaced worker who accepts reemployment at a lower wage than the worker's prior position.

4. (New section) a. Any employer that adopts, expands, or materially modifies an artificial intelligence system that the employer reasonably anticipates will result in the elimination, reduction, or material restructuring of 25 or more positions within a 12-month period shall notify the Division of Wage and Hour Compliance in the Department of Labor and Workforce Development no less than 90 days prior to implementation. The notice shall include:

(1) the number and job classification of positions expected to be affected;

(2) a timeline for implementation of the AI system;

(3) the employer's plan for affected workers, including any retraining, redeployment, severance, or other transition assistance the employer commits to provide; and

(4) identification of new or evolving roles within the employer's organization for which displaced workers may be suitable with training.

b. Failure to provide timely notice pursuant to subsection a. of this section shall subject the employer to a civil penalty to be collected by the commissioner, as follows:

(1) $500 per affected employee for notice provided 60 to 89 days prior to implementation;

(2) $1,000 per affected employee for notice provided 30 to 59 days prior to implementation;

(3) $2,000 per affected employee for notice provided less than 30 days prior to implementation; and

(4) $3,000 per affected employee for no notice provided.

Penalties shall not be cumulative and a single penalty per affected employee shall apply based on the notice timing tier at the time of implementation.

c. Notices filed under this section shall be made publicly available on the department website in a searchable, machine-readable format within 30 days of receipt.

d. No penalty shall be imposed under subsection b. of this section where an employer demonstrates that:

(1) the employer provided notice in good faith based on the reasonable projection of affected positions at the time of filing;

(2) the actual number of affected positions or implementation timeline deviated from the notice due to circumstances that arose after filing and were not reasonably foreseeable; and

(3) the employer filed an amended notice within 15 days of becoming aware of the material change.

This subsection shall not apply where the employer's original notice was materially inaccurate due to reckless disregard for the accuracy of the information provided.

5. (New section) a. The commissioner shall assign staff within the Division of Wage and Hour Compliance in the Department of Labor and Workforce Development to carry out all enforcement functions under P.L. , c. (C. ) (pending before the Legislature as this bill), including notice intake, complaint processing, investigations, penalty assessment and collection, and compliance auditing. A new organizational unit shall not be required to be established for this purpose.

b. Any worker who has reason to believe that an employer has violated the notice requirements established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) may file a written complaint with the division. The division shall:

(1) acknowledge receipt of the complaint within 10 business days;

(2) complete a preliminary assessment within 45 days of receipt and notify the complainant of its findings;

(3) initiate a formal investigation where the preliminary assessment identifies a reasonable basis to believe a violation occurred; and

(4) issue a final determination within 180 days of initiating a formal investigation.

c. An employer shall not discharge, demote, suspend, threaten, harass, or in any manner discriminate against a worker on the basis that the worker filed a complaint, participated in an investigation, or testified in any proceeding under P.L. , c. (C. ) (pending before the Legislature as this bill). A worker subjected to retaliation shall be entitled to reinstatement, back pay, compensatory damages, and reasonable attorneys' fees, recoverable in a civil action in the Superior Court of New Jersey.

d. The identity of a worker who filed a complaint shall be kept confidential by the division to the extent practicable and consistent with the requirements of a fair investigation.

e. (1) The division may, on a periodic basis, cross-reference the notice required pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) filed with the department against unemployment insurance claims data held by the department.

(2) The division may initiate a compliance inquiry where the division identifies an employer in a high-automation industry that has generated a pattern of unemployment insurance claims consistent with the simultaneous separation of 25 or more employees within a 12-month period but has not filed a notice required under section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill). The employer shall have 20 business days to demonstrate that:

(a) the notice required pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) was filed;

(b) the separations did not result from AI system adoption; or

(3) Failure to respond or demonstrate compliance shall constitute a rebuttable presumption of violation and shall subject the employer to penalties pursuant to subsection b. of section of 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).

(4) An employer may rebut this presumption by demonstrating through evidence that the separation was caused solely by factors independent of AI adoption, including documented performance issues, voluntary resignation, or a general economic reduction in force unrelated to AI deployment.

f. The requirements of P.L. , c. (C. ) (pending before the Legislature as this bill) are in addition to, and not in lieu of, the notice and severance obligations established under the "Millville Dallas Airmotive Plant Job Loss Notification Act," P.L.2007, c.212 (C.34:21-1 et seq.). An employer's compliance with P.L. , c. (C. ) (pending before the Legislature as this bill) shall not be construed as satisfying its obligations under the "Millville Dallas Airmotive Plant Job Loss Notification Act," P.L.2007, c.212 (C.34:21-1 et seq.), and compliance with that act shall not be construed as satisfying the employer's obligations under P.L. , c. (C. ) (pending before the Legislature as this bill). Where a layoff triggers the "Millville Dallas Airmotive Plant Job Loss Notification Act," P.L.2007, c.212 (C.34:21-1 et seq.) and P.L. , c. (C. ) (pending before the Legislature as this bill), the employer shall comply with all requirements under each.

6. (New section) a. Any employer that has filed one or more notices pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) in the preceding 24 months shall annually submit to the State Employment and Training Commission a skills forecast report containing:

(1) an inventory of positions the employer has already committed to creating, modifying, or eliminating due to AI adoption, based on investment decisions already made, contracts already signed, or systems already in implementation;

(2) the technical and non-technical skills the employer identifies as essential to new or AI-adjacent roles arising from AI system deployment; and

(3) the employer's apprenticeship, internship, and on-the-job training capacity and commitments for affected workers.

b. The forecast report required under subsection a. of this section shall be limited to workforce changes attributable to AI systems for which the employer has already made a commitment. Speculative or contingent future deployments are not required to be reported.

c. The State Employment and Training Commission shall aggregate anonymized data from these reports and annually publish a Statewide AI Labor Market Dashboard, accessible free of charge to educational institutions, workforce development organizations, workers, and the public.

7. Section 9 of P.L.1992, c 43 (C.34:15D-9) is amended to read as follows:

9. a. A restricted, nonlapsing, revolving Workforce Development Partnership Fund, to be managed and invested by the State Treasurer, is hereby established to: provide employment and training services to qualified displaced, disadvantaged and employed workers by means of training grants or customized training services; provide for the other costs indicated in subsection a. of section 4 of P.L.1992, c.43 (C.34:15D-4); provide for the New Jersey Innovation and Research Fellowship Program as provided for in section 3 of P.L.2015, c.235 (C.34:15D-26); provide for the Talent Network Program as provided for in section 2 of P.L.2019, c.125 (C.34:15D-29); provide employment transition services, extended unemployment benefits, wage insurance, and training grants for workers displaced by artificial intelligence systems under the "New Jersey Artificial Intelligence Workforce Transition Act" P.L. , c. (C. ) (pending before the Legislature as this bill); and facilitate the provision of education and training to youth by means of grants provided by the Youth Transitions to Work Partnership pursuant to the provisions of P.L.1993, c.268 (C.34:15E-1 et al.). All appropriations to the fund, all interest accumulated on balances in the fund and all cash received for the fund from any other source shall be used solely for the purposes specifically delineated by this act.

b. During any fiscal year beginning after June 30, 2001, of the total revenues dedicated to the program during any one fiscal year:

(1) [25%] 12% shall be deposited in an account of the Workforce Development Partnership Fund reserved to provide employment and training services for qualified displaced workers, and through fiscal year 2023, not less than 10% of the revenues deposited in that account shall be reserved to provide employment and training services to qualified displaced workers in the pursuit of industry-valued credentials under the pilot program established pursuant to P.L.2019, c.252 (C.34:15D-30 et al.); and during any fiscal year beginning after June 30, 2019, 0.5% shall be deposited in an account of the Workforce Development Partnership Fund reserved for an appropriated to the Department of Labor and Workforce Development for the Apprenticeship Start-Up Grant Program created pursuant to section 3 of P.L.2019, c.417 (C.34:15D-6.1);

(2) 6% shall be deposited in an account of the Workforce Development Partnership Fund reserved to provide employment and training services for qualified disadvantaged workers, and through fiscal year 2023, not less than 10% of the revenues deposited in that account shall be reserved to provide employment and training services to qualified disadvantaged workers in the pursuit of industry-valued credentials under the pilot program established pursuant to P.L.2019, c.252 (C.34:15D-30 et al.);

(3) 37% prior to July 1, 2022, and 35% after June 30, 2022 shall be deposited in an account of the Workforce Development Partnership Fund reserved for and appropriated to the Office of Customized Training;

(4) 5% prior to July 1, 2022, and 7% after June 30, 2022 shall be deposited in an account of the Workforce Development Partnership Fund reserved for the Youth Transitions to Work Partnership created pursuant to P.L.1993, c.268 (C.34:15E-1 et seq.);

(5) 3% shall be deposited in an account of the Workforce Development Partnership Fund reserved for occupational safety and health training;

(6) 5% shall be deposited in an account of the Workforce Development Partnership Fund reserved for and appropriated to the Talent Network Program established pursuant to section 2 of P.L.2019, c.125 (C.34:15D-29);

(7) 3% shall be deposited in an account of the Workforce Development Partnership Fund reserved for the New Jersey Innovation and Research Fellowship Program established pursuant to section 3 of P.L.2015, c.235 (C.34:15D-26);

(8) 10% shall be deposited in an account of the Workforce Development Partnership Fund reserved for administrative costs as defined in section 3 of P.L.1992, c.43 (C.34:15D-3);

(9) 0.5% shall be deposited in an account of the Workforce Development Partnership Fund reserved for the State Employment and Training Commission to design criteria and conduct an annual evaluation of the program; [and]

(10) [5%] 3% shall be deposited in an account of the Workforce Development Partnership Fund to be used, at the discretion of the commissioner, for any of the purposes indicated in subsection a. of section 4 of P.L.1992, c.43 (C.34:15D-4); and

(11) 15% shall be deposited in an account of the Workforce Development Partnership Fund reserved for the AI Displacement Account to be used for any of the purposes indicated in subsection g. of this section.

c. Beginning January 1, 1995, through June 30, 2002, the balance in the fund as of the previous December 31, as determined in accordance with generally accepted accounting principles, shall not exceed 1.5 times the amount of contributions deposited for the calendar year then ended. If the balance exceeds this amount, the excess shall be deposited into the unemployment compensation fund within seven business days of the date that the determination is made.

d. Beginning July 1, 2002, and for any subsequent fiscal year, if the unexpended cash balance in any of the accounts indicated in subsection b. of this section, except for the account reserved for the Talent Network Program and the AI Displacement Account, less any amount awarded in grants but not yet disbursed from the account, is determined to exceed 20% of the amount of contributions collected for deposit in the account pursuant to this subsection during the fiscal year then ended, the excess shall be regarded as an unemployment compensation contribution and deposited into the unemployment compensation fund within seven business days of the date that the determination is made. If the unexpended cash balance in the account reserved for the Talent Network Program, less any amount awarded in grants but not yet disbursed from the account, is determined to exceed 20% of the amount of contributions collected for deposit in the account pursuant to this subsection during the fiscal year then ended, the excess shall be deposited into the Workforce Development Partnership Fund account reserved for the Office of Customized Training.

e. $250,000 shall be allocated to the Apprentice Assistance and Support Services Pilot Program established pursuant to section 1 of P.L.2019, c.419 (C.34:15D-6.2) from the $29,690,000 which was appropriated pursuant to the annual appropriations act for State fiscal year 2019 from the Workforce Development Partnership Fund for the purpose of funding Work First New Jersey Work Activities and Work First New Jersey-Training Related Expenses, and, $1,100,000 shall be allocated to the pilot program in each of fiscal years 2020, 2021, 2022, 2023, and 2024 from the amounts appropriated pursuant to the annual appropriations act in those fiscal years from the Workforce Development Partnership Fund for the purpose of funding Work First New Jersey Work Activities and Work First New Jersey-Training Related Expenses. Of the funds allocated to the pilot program pursuant to this subsection, 90% shall be dedicated to the Child Care Stipend program and 10% to transportation reimbursement.

f. Upon the effective date of P.L.2022, c.89 (C.34:15E-6 et al.) and notwithstanding the provisions of any law or regulation to the contrary, in addition to the amount deposited in an account of the Workforce Development Partnership Fund reserved for the Youth Transitions to Work Partnership pursuant to subsection b. of this section, $1,000,000 shall be allocated to the Youth Transitions to Work Partnership from the $22,500,000 which was appropriated pursuant to the annual appropriations act for State fiscal year 2022 from the Workforce Development Partnership Fund for the purpose of funding the NJ Apprenticeship Network, the Career Accelerator Internship Program, the Workforce Development Policy and Evaluation Lab, the NJ Career Network, and such other priority workforce initiatives recommended by the Commissioner of Labor and Workforce Development.

g. A restricted, nonlapsing, revolving AI Displacement Account, to be managed by the State Treasurer, in consultation with the Commissioner of Labor and Workforce Development, is established within the Workforce Development Partnership Fund to be used exclusively for the programs established under P.L. , c. (C. ) (pending before the Legislature as this bill).

(1) Any interest accumulated on balances in the account shall remain in the account.

(2) The State Treasurer shall structure the AI Displacement Account in a manner that qualifies the account for treatment consistent with the nonlapsing accounts designated under subsection f. of section 9 of P.L.1992, c.43 (C.34:15D-9), such that unexpended balances are not subject to automatic sweep into the unemployment compensation fund under subsection d. of section 9 of P.L.1992, c.43 (C.34:15D-9). If the treatment requires a statutory exemption, the commissioner shall seek the necessary legislative authorization as part of the first appropriations act following enactment of P.L. , c. (C. ) (pending before the Legislature as this bill).

(3) Civil penalties collected under subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be deposited into the AI Displacement Account.

(4) If AI Displacement Account revenue is insufficient to fully fund all programs under P.L. , c. (C. ) (pending before the Legislature as this bill), disbursements shall be prioritized in the following order:

(a) extended unemployment insurance benefits under section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill);

(b) wage insurance benefits under section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill); and

(5) If the unexpended cash balance in the AI Displacement Account falls below 20 percent of annual program obligations in any fiscal year, the commissioner shall notify the Governor and Legislature within 30 days. Upon notification, the commissioner shall be authorized, without further legislative action, to implement one or more of the following emergency adjustments to restore solvency:

(a) reduce the weekly wage insurance benefit under section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill) by up to 20 percent for new awards;

(b) reduce individual training grant awards under section 11 of P.L. , c. (C. ) (pending before the Legislature as this bill) by up to 20 percent;

(d) request an emergency appropriation from the Legislature.

(6) An emergency adjustment implemented by the commissioner under this subsection shall take effect no sooner than 30 days after notification to the Governor and Legislature, during which time the Legislature may, by concurrent resolution, direct the commissioner to implement alternative measures. Emergency adjustments shall expire automatically at the end of the fiscal year in which they are implemented unless the Legislature enacts permanent modifications.

(cf: P.L.2022, c.89, s.2)

8. (New section) a. The commissioner shall designate staff within the Office of Research and Information in the Department of Labor and Workforce Development to carry out the data tracking, measurement, and publication functions established under P.L. , c. (C. ) (pending before the Legislature as this bill). The commissioner may, in the alternative or in addition, contract with an independent research institution to develop, maintain, and annually update the adaptive capacity index described in subsection c. of this section. A new organizational office or unit shall not be required to be established for this purpose.

b. The department shall, on a quarterly basis:

(1) measure and publish artificial intelligence-driven job displacement rates by industry sector, occupation type, county, and ZIP code, drawing on existing unemployment insurance claims data, mass layoff statistics, and employer notices filed under section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill);

(2) update the designation of high-automation industries as defined in section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill); and

(3) publish the AI Labor Market Dashboard, incorporating employer forecast data submitted under section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill), accessible free of charge to educational institutions, workforce development organizations, workers, and the public.

c. The commissioner shall annually publish, or cause to be published through contract with an independent research institution, an adaptive capacity index measuring, by occupation and ZIP code, workers' estimated capacity to navigate job displacement based on liquid financial savings, age distribution, geographic labor market density, and skill transferability. The adaptive capacity index shall:

(1) identify occupations that combine above-median AI exposure with below-median adaptive capacity, designating these as high-vulnerability occupations;

(2) identify ZIP codes where high-vulnerability occupations represent a disproportionately large share of total employment;

(3) disaggregate findings by gender, race, and age to ensure that concentrations of vulnerable workers in feminized or historically underrepresented occupations are visible to policymakers and the public; and

(4) be used to inform the prioritization of training grants under section 11 of P.L. , c. (C. ) (pending before the Legislature as this bill), the community college credential program development under section 20 of P.L. , c. (C. ) (pending before the Legislature as this bill), and the apprenticeship targeting program under section 22 of P.L. , c. (C. ) (pending before the Legislature as this bill).

d. If the commissioner determines that artificial intelligence-driven displacement in any defined industry sector reaches or exceeds 15 percent of sector employment within any rolling 24-month period, the following responses shall be automatically triggered without requiring further legislative or executive action:

(1) the affected sector shall be designated a Tier I high-automation industry;

(2) workers in the affected sector shall become immediately eligible for extended unemployment insurance benefits under section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill); and

(3) the commissioner shall, within 60 days of the threshold being reached, publish an emergency high-demand credential list specific to the displaced sector.

e. If a geographic area defined at the ZIP code level experiences aggregate artificial intelligence-driven job displacement exceeding 10 percent of its employed workforce within any rolling 24-month period, the commissioner shall recommend to the Governor and Legislature that the area be designated an artificial intelligence economic opportunity zone. Upon designation of an artificial intelligence economic opportunity zone:

(1) the area shall receive priority consideration for State economic development incentives, including New Jersey Economic Development Authority programs;

(2) businesses establishing or expanding operations in an economic opportunity zone that creates net new human employment shall receive enhanced tax credits under sections 18 or 19 of P.L. , c. (C. ) (pending before the Legislature as this bill);

(3) community colleges serving an economic opportunity zone shall receive a 1.35 multiplier on all performance-based supplements under section 21 of P.L. , c. (C. ) (pending before the Legislature as this bill), applied in the Secretary of Higher Education's annual budget recommendation.

f. The commissioner shall submit an annual report to the Governor, the President of the Senate, and the Speaker of the General Assembly by March 1 of each year detailing displacement trends, adaptive capacity findings, program utilization, and recommendations for statutory or regulatory modifications.

9. (New section) a. An AI-displaced worker who is otherwise eligible for State unemployment insurance benefits shall receive an extended benefit period of an additional 26 weeks beyond the standard maximum benefit duration, provided that the worker:

(1) has been certified as AI-displaced through the process established under subsection b. of this section; and

(2) is actively enrolled in an approved high-demand credential program, registered apprenticeship program, or employer-sponsored retraining program for each week of extended benefits claimed.

b. The Division of Wage and Hour Compliance shall establish an AI displacement certification process under which workers may apply for AI-displaced status.

(1) The division shall issue a determination within 30 days of a complete application.

(2) A rebuttable presumption of AI displacement shall arise where the employer:

(a) filed a notice under section of 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) identifying the worker's job classification as affected; or

(b) adopted an artificial intelligence system performing functions substantially identical to those of the worker's position within 24 months prior to separation.

(3) Workers denied certification may appeal to the commissioner within 30 days of denial.

c. Extended benefits under this section shall be funded exclusively from the AI Displacement Account established under section 9 of P.L.1992, c.43 (C.34:15D-9) and shall not affect an employer's standard unemployment insurance experience rating.

d. A worker who voluntarily withdraws from an approved program for reasons other than documented medical necessity, caregiving emergency, or program closure shall forfeit extended benefits for the weeks of non-enrollment but may re-establish eligibility upon re-enrollment.

10. (New section) a. An AI-displaced worker who obtains new employment at a wage lower than the worker's prior employment shall be eligible for wage insurance as follows:

(1) payments equal to 50 percent of the weekly wage differential between prior employment and new employment;

(2) a maximum weekly benefit of $400; and

(3) a maximum benefit duration of 52 weeks.

b. To qualify for the wage insurance benefits under subsection a. of this section, the AI-displaced worker shall:

(1) have earned no more than $250,000 in annualized wages in the prior position;

(2) have been employed in the prior position for at least 12 consecutive months;

(3) accept new employment within 26 weeks of separation; and

(4) file a claim with the department within 60 days of accepting new employment.

c. Wage insurance payments shall not be counted as income for purposes of New Jersey Earned Income Tax Credit eligibility.

d. An AI-displaced worker whose wage insurance claim is denied may appeal to the commissioner within 30 days of receiving written notice of denial. The commissioner shall issue a final determination on the appeal within 60 days of receipt. The procedures and standards governing appeals under this subsection shall be established by the commissioner through interim guidance or rulemaking pursuant to section 26 of P.L. , c. (C. ) (pending before the Legislature as this bill).

11. (New section) a. An AI-displaced worker shall be eligible for an individual training grant of up to $6,000 per fiscal year, for a maximum of two fiscal years, to cover the cost of tuition, fees, and materials for:

(1) high-demand credentials at New Jersey public or nonprofit educational institutions;

(2) registered apprenticeship programs; or

(3) industry-recognized certifications approved by the State Employment and Training Commission.

b. Priority in grant awards shall be determined by reference to the adaptive capacity index published pursuant to subsection c. of section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill). Workers in occupations designated as high-vulnerability occupations shall receive first priority, and within that category, priority shall be further determined by the following adaptive capacity factors, weighted in the order listed:

(1) workers aged 55 and older shall receive highest priority, reflecting research showing that older workers face significantly lower reemployment rates and larger earnings losses following displacement;

(2) workers with limited liquid savings as evidenced by eligibility for means-tested public benefits programs shall receive elevated priority, reflecting that financial insecurity forces workers into inferior jobs under duress;

(3) workers in counties or ZIP codes designated as low-density labor markets by the department shall receive elevated priority, reflecting that workers in smaller markets face fewer alternative employment opportunities;

(4) workers in occupations with low skill transferability scores on the adaptive capacity index shall receive elevated priority, reflecting that narrowly specialized workers face greater difficulty moving across occupations.

c. Nothing in this section shall preclude an AI-displaced worker who does not meet priority criteria from receiving a training grant if funds remain available after priority applicants are served.

12. (New section) a. A taxpayer that employs and maintains a full-time equivalent employee headcount at or above a baseline headcount while implementing an artificial intelligence system shall be allowed a credit against the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to $3,000 per full-time equivalent employee retained above the baseline headcount, up to a maximum of $750,000 per taxable year.

b. To claim the credit established pursuant to subsection a. of this section, a taxpayer shall apply and submit certified payroll records and an attestation that the taxpayer has deployed an artificial intelligence system during the applicable taxable year in a form and manner determined by the director.

c. (1) The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the corporation business tax for a privilege period shall be as prescribed by the director.

(2) The amount of the credit applied pursuant to this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), shall not reduce a taxpayer's tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).

(3) Credit allowed pursuant to this section shall be available for the five consecutive taxable years beginning with the first full taxable year following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).

(4) The director shall promulgate rules within 18 months of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) establishing certification procedures, and the Commissioner of Labor and Workforce Development may issue interim guidance pursuant to section 26 to enable employers to claim the credit before final rules are in place.

d. A tax credit allowed pursuant to this section shall be the amount provided in sections 12 and 13 of P.L. , c. (C. ) (pending before the Legislature as this bill) against the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

e. As used in this section:

"Baseline headcount" means an employer's employee count, including both full-time and part-time employees, as of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) or, for employers not in operation on that date, the employee count as of the date of the employer's first AI system deployment after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).

13. (New section) a. A taxpayer that employs and maintains a full-time equivalent employee headcount at or above a baseline headcount while implementing an artificial intelligence system shall be allowed a credit against the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to $3,000 per full-time equivalent employee retained above the baseline headcount, up to a maximum of $750,000 per taxable year.

(2) The amount of the credit applied pursuant to this section against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq., shall not reduce a taxpayer's tax liability to an amount less than zero.

e. As used in this section:

14. (New section) a. A taxpayer that retrains an existing employee for a new role within the same firm, including roles created by or adjacent to an artificial intelligence system deployment, shall be allowed a credit against the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to 100 percent of the direct costs of employee retraining, including tuition, fees, instructor costs, and the cost of approved training materials, up to a maximum of $1,000,000 per taxable year. The purpose of the tax credit is to encourage employers to invest in their existing workforce rather than displacing employees through AI systems.

b. To claim the credit established pursuant to subsection a. of this section, a taxpayer shall apply and submit, in a form and manner determined by the director, information demonstrating that:

(1) the employee undergoing retraining has held a position with the taxpayer for at least 12 consecutive months prior to the start of retraining;

(2) the retraining will result in the employee assuming a materially different role with the taxpayer within 18 months of the start of retraining; and

(3) the retraining program is approved by the State Employment and Training Commission or will result in an industry-recognized credential.

d. A tax credit allowed pursuant to this section shall be the amount provided in sections 14 and 15 of P.L. , c. (C. ) (pending before the Legislature as this bill) against the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

e. As used in this section, "artificial intelligence system" or "AI system" means any machine-based system that processes inputs using algorithms, statistical models, or neural networks to generate outputs such as predictions, recommendations, decisions, or content that materially influence or replace human judgment in performing a job function. The term includes machine learning systems, large language models, generative AI tools, robotic process automation systems, and automated decision-making platforms. The term does not include general-purpose software, standard database management systems, or basic rule-based automation that does not incorporate learning or adaptive capabilities.

15. (New section) a. A taxpayer that retrains an existing employee for a new role within the same firm, including roles created by or adjacent to an artificial intelligence system deployment, shall be allowed a credit against the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 100 percent of the direct costs of employee retraining, including tuition, fees, instructor costs, and the cost of approved training materials, up to a maximum of $1,000,000 per taxable year. The purpose of the tax credit is to encourage employers to invest in their existing workforce rather than displacing employees through AI systems.

b. To claim the credit established pursuant to subsection a. of this section, a taxpayer shall apply and submit, in a form and manner determined by the director, information demonstrating that:

(1) the employee undergoing retraining has held a position with the taxpayer for at least 12 consecutive months prior to the start of retraining;

(2) the retraining will result in the employee assuming a materially different role with the taxpayer within 18 months of the start of retraining; and

(3) the retraining program is approved by the State Employment and Training Commission or will result in an industry-recognized credential.

16. (New section) a. A taxpayer that provides qualifying on-the-job training to a State resident who is an AI-displaced worker or a participant in a registered apprenticeship program shall be allowed a credit against the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to:

(1) 30 percent of wages paid to the qualifying trainee during the first 12 months of training; and

(2) an additional 10 percent credit if the trainee was unemployed for more than six months prior to hiring.

b. The total value of the tax credit claimed by a taxpayer under this section shall not exceed $500,000 in a taxable year.

c. A taxpayer shall apply in a form and manner to be determined by the director for the tax credit provided pursuant to this section.

d. (1) The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the corporation business tax for a privilege period shall be as prescribed by the director.

e. A tax credit allowed pursuant to this section shall be the amount provided in sections 16 and 17 of P.L. , c. (C. ) (pending before the Legislature as this bill) against the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

f. As used in this section:

17. (New section) a. A taxpayer that provides qualifying on-the-job training to a State resident who is an AI-displaced worker or a participant in a registered apprenticeship program shall be allowed a credit against the corporation business tax imposed pursuant to "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to:

(1) 30 percent of wages paid to the qualifying trainee during the first 12 months of training; and

(2) an additional 10 percent credit if the trainee was unemployed for more than six months prior to hiring.

b. The total value of the tax credit claimed by a taxpayer under this section shall not exceed $500,000 in a taxable year.

c. A taxpayer shall apply in a form and manner to be determined by the director for the tax credit provided pursuant to this section.

d. (1) The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. for a privilege period shall be as prescribed by the director.

f. As used in this section:

18. (New section) a. A taxpayer that establishes or expands business operations within a designated artificial intelligence economic opportunity zone and creates net new full-time human employment in that zone shall be allowed a credit against the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to $5,000 per net new full-time position created and maintained for at least 12 consecutive months, up to a maximum of $2,000,000 per business per taxable year.

b. A taxpayer shall apply in a form and manner to be determined by the director for the tax credit provided pursuant to this section.

c. (1) The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. for a privilege period shall be shall be given to businesses in fields designated as high-growth and human-centric by the Commissioner of Labor and Workforce Development, including, but not limited to biotechnology, green energy, healthcare services, and advanced manufacturing.

d. A tax credit allowed pursuant to this section shall be the amount provided in sections 18 and 19 of P.L. , c. (C. ) (pending before the Legislature as this bill) against the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

e. As used in this section, "economic opportunity zone" means a geographic designation pursuant to subsection e. of section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill) that triggers targeted economic development incentives in response to artificial intelligence-driven displacement exceeding defined thresholds.

19. (New section) a. A taxpayer that establishes or expands business operations within a designated artificial intelligence economic opportunity zone and creates net new full-time human employment in that zone shall be allowed a credit against the corporation business tax imposed pursuant to "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to $5,000 per net new full-time position created and maintained for at least 12 consecutive months, up to a maximum of $2,000,000 per business per taxable year.

b. A taxpayer shall apply in a form and manner to be determined by the director for the tax credit provided pursuant to this section.

d. A tax credit allowed pursuant to this section shall be the amount provided in sections 15 and 16 of P.L. , c. (C. ) (pending before the Legislature as this bill) against the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

20. (New section) a. The New Jersey Council of County Colleges, in consultation with the Secretary of Higher Education, shall, within 18 months of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), work with member institutions to develop and implement a modular credential framework under which:

(1) county community colleges are encouraged to offer stackable, stand-alone credentials of four to 18 months in high-demand fields identified by the State Employment and Training Commission;

(2) credits earned in any stackable credential program may be counted toward an associate or bachelor's degree at any State public institution of higher education; and

(3) programs are designed to accommodate working adults, including hybrid and evening scheduling.

b. The modular credential framework shall prioritize fields where the AI Labor Market Dashboard, published pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill), identifies acute current or projected labor shortages, including, but not limited to advanced manufacturing, healthcare technology, cybersecurity, data analysis, AI systems oversight, and green infrastructure.

c. The New Jersey Council of County Colleges shall report to the Governor, the Secretary of Higher Education, and the Legislature within 24 months of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) on the status of modular credential framework implementation, including which institutions have adopted new credential programs, which fields are being prioritized, and any barriers to implementation that require legislative or regulatory action.

21. (New section) a. The Secretary of Higher Education shall, beginning with the State budget request for fiscal year 2028, recommend to the Governor and Legislature an annual performance-based supplement to existing State aid for county community colleges, to be funded through the regular higher education appropriations process. The supplement shall be calculated as follows:

(1) a base performance supplement of $3,000 per graduate who completes a high-demand credential and obtains employment in the credentialed field within 12 months of completion; and

(2) an additional supplement of $1,500 per graduate who was an AI-displaced worker prior to enrollment.

b. A county community college serving economically disadvantaged populations shall adjust the performance-based supplement as follows:

(1) an institution whose enrolled students in a given program have a median household income below 200% of the federal poverty level shall receive a multiplier of 1.25 applied to all base performance supplements for that program;

(2) an institution located in a county with an unemployment rate exceeding the statewide average by more than two percentage points, or in a designated artificial intelligence economic opportunity zone, shall receive a multiplier of 1.15 applied to all base performance supplements; and

(3) where the conditions of paragraphs (1) and (2) of this subsection are met, the higher multiplier shall apply.

c. The Secretary of Higher Education and the Commissioner of Labor and Workforce Development shall jointly develop outcome measurement standards and data-sharing agreements necessary to calculate the performance-based supplement and verify employment outcomes. The Secretary of Higher Education shall publish annual data on supplement awards by institution, credential field, and student demographic.

d. Nothing in this section shall be construed to reduce base operating appropriations to any community college below the fiscal year 2027 appropriation level.

e. The performance-based supplement established under this section shall not be funded through the AI Displacement Account established under section 9 of P.L.1992, c.43 (C.34:15D-9). The performance-based supplement shall be subject to the annual appropriations process and shall be presented as a distinct line item in the Secretary of Higher Education's annual budget submission.

22. (New section) a. The Commissioner of Labor and Workforce Development shall, within 12 months of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), designate artificial intelligence-adjacent occupations as priority sectors under the existing Growing Apprenticeship in Nontraditional Sectors (GAINS) grant program.

b. Priority artificial intelligence-adjacent occupations shall include, but not be limited to, AI systems oversight, data quality assurance, human-artificial intelligence workflow coordination, cybersecurity, and advanced manufacturing roles incorporating artificial intelligence-driven equipment.

c. The commissioner shall direct the Office of Apprenticeship in the department to develop, within 18 months of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), model registered apprenticeship program templates for designated AI-adjacent occupations. The templates shall be made available to employers, labor organizations, and community colleges at no cost and shall meet U.S. Department of Labor standards for registration as registered apprenticeship programs.

d. The commissioner shall ensure that existing Growing Apprenticeship in Nontraditional Sectors (GAINS) program reporting is enhanced to disaggregate apprenticeship capacity, participation, and completion data by whether programs serve workers in high-vulnerability occupations as designated under subsection c. of section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill). The enhanced disaggregation shall be incorporated into the department's existing annual apprenticeship reporting and shall not constitute a separate reporting obligation.

e. A startup grant awarded under the GAINS program to employers establishing apprenticeship programs in designated AI-adjacent occupations shall be eligible for a funding priority and shall not be subject to a per-employer cap lower than $100,000.

23. a. The State Employment and Training Commission shall designate and annually update the list of high-demand credential fields for the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill), consistent with the existing mandate to identify in-demand occupations and high-growth industries in the State.

b. In making designations, the State Employment and Training Commission shall give priority to fields identified in the AI Labor Market Dashboard, published pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill), as experiencing acute current or projected labor shortages attributable to artificial intelligence-driven workforce transformation.

c. The State Employment and Training Commission shall, consistent with its existing evaluation function under section 9 of P.L.1992, c.43 (C.34:15D-9), review and approve the methodology used by the commissioner to produce the adaptive capacity index established pursuant to subsection c. of section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill) and the AI Labor Market Dashboard established pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill). The State Employment and Training Commission shall conduct the review established under this subsection not less than once every two years and publish the findings on the commission's Internet website.

24. a. No later than March 1 of each year, the commissioner shall annually submit to the President of the Senate, the Speaker of the General Assembly, and the Governor a comprehensive report on the implementation of P.L. , c. (C. ) (pending before the Legislature as this bill) containing:

(1) artificial intelligence-driven displacement rates by sector, occupation, county, and ZIP code, and the current list of designated high-automation industries;

(2) the current adaptive capacity index findings, including the list of high-vulnerability occupations and high-concentration ZIP codes;

(3) the number of AI-displaced workers certified, and the number served under each program established by P.L. , c. (C. ) (pending before the Legislature as this bill);

(4) training completion and employment outcome data, disaggregated by age, gender, race, county, and prior industry;

(5) tax credit utilization and estimated fiscal impact, compiled in coordination with the Director of the Division of Taxation;

(6) AI Displacement Account revenues, expenditures, and solvency projections for the next three fiscal years;

(7) the status of the community college credential program development established under section 20 of P.L. , c. (C. ) (pending before the Legislature as this bill), based on the Council of County Colleges implementation report;

(8) apprenticeship program expansion data established under section 22 of P.L. , c. (C. ) (pending before the Legislature as this bill), based on existing GAINS program reporting; and

(9) recommendations for statutory or regulatory modifications.

The annual report under this subsection shall be made publicly available on the department's website within 30 days of submission.

b. No later than three years after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the commissioner shall conduct a comprehensive interim review of all programs established under P.L. , c. (C. ) (pending before the Legislature as this bill) and submit a report to the Governor, the President of the Senate, and the Speaker of the General Assembly containing:

(1) an assessment of whether the AI Displacement Account revenues are sufficient, excessive, or require adjustment based on actual displacement rates and program utilization, including whether a supplemental appropriation or additional revenue source is warranted;

(2) an assessment of whether the wage insurance benefit levels, weekly cap, and duration under section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill) remain appropriate given actual wage gap data for AI-displaced workers;

(3) an assessment of whether the training grant amounts under section 11 of P.L. , c. (C. ) (pending before the Legislature as this bill) are adequate to cover the actual cost of high-demand credentials and registered apprenticeships, and whether the performance-based supplement under section 21 of P.L. , c. (C. ) (pending before the Legislature as this bill) is being funded at levels sufficient to incentivize credential program development;

(4) an assessment of whether the 15 percent Workforce Development Partnership Fund reallocation has produced unintended adverse effects on existing programs previously funded through the displaced worker or discretionary accounts;

(5) an assessment of whether the definition of artificial intelligence system, the employer threshold, and the 25-position trigger remain appropriately calibrated to actual artificial intelligence deployment patterns in the State; and

(6) specific recommended statutory amendments, if any, necessary to improve program effectiveness, equity, or fiscal sustainability.

The interim review under this subsection shall be made publicly available on the department's website within 30 days of submission.

25. a. The Legislature shall consider the annual report and interim review submitted pursuant to section 24 of P.L. , c. (C. ) (pending before the Legislature as this bill) and any additional testimony or evidence the Legislature deems relevant to the reauthorization of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. The Legislature may modify any provision of P.L. , c. (C. ) (pending before the Legislature as this bill) as part of reauthorization, including adjustment of benefit levels, employer thresholds, and program eligibility criteria.

c. If P.L. , c. (C. ) (pending before the Legislature as this bill) expires:

(1) new applications for benefits, training grants, or wage insurance shall not be accepted after the expiration date;

(2) benefits, wage insurance payments, and training grants awarded prior to expiration shall continue to be paid until the authorized duration expires;

(3) the AI Displacement Account within the Workforce Development Partnership Fund shall revert to the general displaced worker account allocation under section 9 of P.L.1992, c.43 (C.34:15D-9) as it existed prior to amendment by P.L. , c. (C. ) (pending before the Legislature as this bill), effective on the expiration date.

d. The Legislature acknowledges that the pace of AI development and its labor market effects are sufficiently uncertain and that a mandatory reauthorization process serves the public interest by ensuring that the programs under P.L. , c. (C. ) (pending before the Legislature as this bill) remain calibrated to actual conditions rather than projections made at the time of initial enactment.

26. The Commissioner of Labor and Workforce Development, the Secretary of Higher Education, the State Treasurer, and the Director of the Division of Taxation shall each promulgate rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the provisions of this act within 18 months of the effective date. Notwithstanding the foregoing, the commissioner may issue interim guidance, directives, and administrative procedures prior to the completion of formal rulemaking to the extent necessary to implement the programs established under this act without undue delay. The interim guidance shall be clearly identified as interim, made publicly available on the department's Internet website, and remain in effect only until superseded by final rules promulgated pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

27. This act shall take effect immediately except that:

(1) section 4 shall take effect 180 days after enactment;

(2) section 7 shall take effect on the first day of the State fiscal year beginning after enactment; and

(3) shall expire on the fifth year after the effective date unless reauthorized by the Legislature prior to that date.

STATEMENT

This bill establishes a five-year "New Jersey Artificial Intelligence Workforce Transition Act."

The bill establishes a comprehensive framework to prepare New Jersey workers for artificial intelligence driven labor disruption built upon cooperation between the public sector, employers, and educational institutions.

Under the bill, companies with 100 or more employees are required to give 90 days' advance notice before artificial intelligence (AI) driven layoffs that would affect 25 or more workers, with tiered penalties ranging from $500 to $3,000 per affected employee. A good faith safe harbor protects compliant employers. The Division of Wage and Hour Compliance is to carry out enforcement functions under the bill. The division may cross-reference notices against unemployment insurance claims data to identify non-filers. Requirements under the bill are cumulative with and do not displace existing notice and severance obligations under the "Millville Dallas Airmotive Plant Job Loss Notification Act."

The bill amends the Workforce Development Partnership Fund to establish a dedicated 15 percent AI Displacement Account. The fund is a constitutionally protected, nonlapsing revolving fund carrying approximately $188 million. The 15 percent is sourced by reducing the general displaced worker account from 25 percent to 12 percent and the commissioner discretionary account from five percent to three percent. Civil penalties under the bill are to be deposited into the account. The bill establishes disbursement and emergency adjustment provisions in the event that AI Displacement Account funds are constrained.

Drawing on Brookings Institution research published in January 2026, the bill distinguishes between AI exposure and AI vulnerability. The most vulnerable workers are the 6.1 million nationally, concentrated in clerical and administrative roles, of whom approximately 86 percent are women, who combine high exposure with low adaptive capacity. The bill operationalizes this distinction through the adaptive capacity index, published annually by the Commissioner of Labor and Workforce Development using existing Department of Labor and Workforce Development research infrastructure or a contracted research partner, which directly drives training grant prioritization, credential program targeting, and apprenticeship focus.

The bill establishes numerous tax credits that prioritize keeping workers employed rather than replacing them. A human retention tax credit rewards employers who maintain worker headcount while deploying AI. A same-firm retraining tax credit provides 100 percent of retraining costs to reward companies that retrain an existing employee into a new internal role rather than displacing them. An on-the-job training tax credit supports hiring displaced workers from outside the firm. An AI economic opportunity zone investment tax credit incentivizes business operation and expansion in designated AI economic opportunity zones

The bill provides several worker safety nets for certified AI-displaced workers:

(1) extended unemployment insurance benefits for an additional 26 weeks for certified AI-displaced workers enrolled in an approved training program;

(2) wage insurance covering 50 percent of the weekly wage differential between prior employment and new employment, up to $400 a week for 52 weeks with no income floor and a $250,000 ceiling; and

(3) training grants of up to $6,000 per year for two years.

Under the bill, the New Jersey Council of County Colleges is to work with member institutions to develop short, stackable credentials tied to real labor demand. The Secretary of Higher Education is to recommend outcome-based performance supplements through the normal appropriations process with equity multipliers protecting institutions serving lower-income students. The bill also expands existing Growing Apprenticeship in Nontraditional Sectors (GAINS) program infrastructure into AI-adjacent occupations with model program templates developed by Office of Apprenticeship in the Department of Labor and Workforce Development.

The bill is designed to be self-correcting with the Workforce Development Partnership Fund reallocation providing a constitutionally protected funding base. The commissioner has emergency adjustment authority if the account becomes constrained. Further, an annual report, three-year interim review, and five-year sunset provision ensures that the Legislature retains active oversight and that programs remain calibrated to actual AI displacement conditions.