Trump Moves to Pre-empt State AI Laws with Executive Order

President Donald Trump on Dec. 11 issued an executive order, challenging state laws regulating artificial intelligence.

The order directs the attorney general to establish a task force within 30 days focused on litigation against state AI laws.

It also empowers the secretary of Commerce to publish a review of “onerous” state AI laws within 90 days and restrict federal broadband funds to states whose AI laws are found to be objectionable. It directs the Federal Trade Commission to issue within 90 days a policy clarifying how the agency’s prohibition on unfair or deceptive practices applies to AI systems.

The Federal Communications Commission must within 90 days initiate proceedings to consider creating a federal reporting and disclosure regime for AI models that would pre-empt conflicting state requirements.

The White House Special Advisor for AI and Crypto and the Assistant to the President for Science and Technology shall jointly prepare a legislative recommendation establishing a uniform federal policy framework for AI that pre-empts state AI laws that conflict with the policy set forth in the order. And all federal agencies must evaluate their grant programs and determine whether states have enacted AI laws that contradict federal policy, putting those grant dollars at risk.

Trump has argued that state regulations threaten to undermine investment in AI and the U.S. economy. “United States AI companies must be free to innovate without cumbersome regulation,” the order reads. “But excessive state regulation thwarts this imperative. My administration must act with the Congress to ensure that there is a minimally burdensome national standard — not 50 discordant state ones.”

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SHRM supports a regulatory framework that protects workers, promotes ethical innovation, and gives employers the clarity they need to implement AI responsibly.

If the federal government moves to a nationwide AI governance strategy, SHRM believes it must fully assume responsibility for establishing national workplace AI standards that are actionable, predictable, and grounded in real business and workforce realities.

To ensure fairness, innovation, and regulatory consistency, SHRM calls on the federal government to:

• Establish clear and comprehensive workplace AI standards.
• Center HR expertise in policymaking.
• Provide consistent, harmonized rules across federal agencies.
• Support employers with implementation tools, timelines, and guidance.
• Balance worker protection with space for innovation.

Legal challenges to the executive order are expected. Some legal experts argue that the president doesn’t have the legal authority to pre-empt state laws through an executive order. Other opponents of the executive order view it as an attempt to block meaningful regulation on AI and don't see a federal standard appearing anytime soon.

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In a vacuum of federal regulation, a handful of states have enacted laws relating to the use of AI in employment, with additional proposals from more states on the way. The executive order does not invalidate these state laws, and they remain enforceable until blocked by a court or pre-empted by Congress.

“I’m not aware of any executive order that pre-empts state law without the force of Congress behind it,” said Niloy Ray, an attorney in the Minneapolis office of Littler.

The question of whether the order lawfully overrides state AI laws in the absence of congressional action is one thing, but the practical confusion and operational risks this action creates for employers trying to deploy AI responsibly is the bigger story, Ray said.

“Employers’ goal is to avoid regulatory turbulence,” he said. “I think employers would prefer a less complex, burdensome regulatory environment that comes from eliminating the growing patchwork of laws, but this executive action instead causes unwelcome turmoil. It needs to be resolved quickly.”

Companies with multistate operations already face fragmentation, inconsistent timelines, and overlapping obligations, said Ben Ebbink, a partner in the Sacramento and Washington D.C., offices of Fisher Phillips. Companies are dealing with divergent definitions, conflicting notice and transparency rules, varying approaches to AI-assisted hiring and monitoring, and expanding obligations around bias testing and documentation, he said.

Ebbink recommended employers prepare for whatever happens to AI laws by:

• Mapping AI tools, especially for high-risk use cases. “Create a centralized inventory covering hiring and promotion systems, performance monitoring, and productivity scoring,” among other areas, he said.
• Track obligations in key jurisdictions. 
• Prepare for bias-testing requirements. “Even if federal pre-emption moves forward, workplace-related outcomes are likely to remain protected carve-outs,” he said.
• Update vendor contracts, making sure to consider disclosure of training-data sources, audit rights, risk mitigation commitments, and adherence to accepted standards frameworks.
• Build a cross-functional AI governance team involving HR, legal, IT, security, and others.

The executive order comes after a failed push to enact similar policy in Congress in late November, which followed a similar unsuccessful attempt in July.