Michigan’s New Bill Takes Aim at AI Employee Surveillance

Most of the AI-in-HR conversation has focused on hiring—résumé screeners, candidate matching, automated interviews, etc. But if you ask employees where they actually feel AI at work, it’s not in the application process.

It’s in the keystroke tracker running in the background. The screen recording software capturing everything they do. The idle-time monitor that flags them when their mouse hasn’t moved for two minutes.

In response, Michigan legislators introduced a bill to regulate this kind of workplace surveillance. If you manage remote or hybrid teams or use any kind of employee monitoring software, this one is worth paying attention to.

What the bill would do

The Responsible AI Security for Employees Act, or RAISE Act, covers the full range of AI-powered workplace monitoring: screen recording, keystroke and mouse-movement tracking, break monitoring, facial recognition, and idle-time detection.

Employers would need to provide written notice and get employee consent before implementing monitoring. Employees could opt out of certain tracking, and they’d have the right to challenge AI-generated performance assessments, so a low productivity score from a monitoring algorithm wouldn’t be the final word.

The bill also draws some hard lines. It would:

• Prohibit using automated decision tools to set wages or make disciplinary decisions.
• Cap data retention at three years.
• Ban selling data collected on employees and applicants.
• Prohibit surveillance in bathrooms, locker rooms, and similar private spaces.

Employee monitoring has become commonplace

About three out of four U.S. employers now use some form of online monitoring or tracking tool, including real-time screen tracking, web browsing logs, application usage monitoring, and email scanning. For remote workers specifically, the rate is around 70%. The market for these tools is projected to hit $4.6 billion this year.

These tools went mainstream during the pandemic. When everyone went remote, employers bought monitoring software to replace the in-office visibility they lost. But the tools stuck around. And they’ve evolved well past time clocks and web filters. We’re talking about systems that analyze facial expressions during video calls, dock pay automatically when a mouse goes idle, and generate performance scores from activity data that employees may never see.

If you’re in HR, there’s a decent chance your organization is running one of these tools right now. And there’s a better-than-decent chance your employees know about it, even if nobody told them formally.

The retention problem you might already have

The surveillance data cuts both ways. Nearly half of employees say they’d consider leaving their job if monitoring increased. One in six is already thinking about quitting because of their employer’s current monitoring practices. Almost a quarter say they take fewer breaks to avoid appearing idle, and a third report feeling pressured to work faster because they know they’re being watched.

If you deployed monitoring tools and saw engagement or retention numbers soften afterward, this might be part of the answer. These tools were sold as productivity solutions. But from the employee’s side of the screen, being tracked keystroke by keystroke reads as distrust. And people leave environments where they feel distrusted and micromanaged.

This is especially relevant if you’re managing hybrid or remote teams. The employees who value the autonomy that remote work provides are often the same employees who react most strongly to surveillance. If your monitoring policy is driving your best performers toward the door, the productivity data you’re collecting won’t show you that.

What HR and employers should do now

While the RAISE Act isn’t law yet, the legislative trend is moving in one direction. Connecticut and Delaware already require written notice before electronic monitoring. California and Massachusetts have introduced broader restrictions. Even if Michigan’s bill stalls, the regulatory pressure on employee surveillance tools is building at the state level.

If you’re using monitoring tools or evaluating them, a few things are worth doing regardless of what Michigan’s legislature decides:

• Step 1: Know what’s running. Many organizations adopted monitoring software in 2020 and 2021, and the tools have remained active on employees’ machines without anyone in HR actively managing them. Find out what’s deployed, what data it collects, and who has access to the reports.
• Step 2: Review employee communications. Written notice and consent are already required in Connecticut and Delaware, but even where they’re not legally required, employees who discover monitoring they weren’t told about react badly. The trust damage from undisclosed surveillance is real, and it’s hard to repair.
• Step 3: Evaluate the broader performance management strategy. If your monitoring tools track activity, keystrokes, idle time, and screen captures, but your performance reviews are based on output and results, something is disconnected. In my experience, that gap creates confusion at best and resentment at worst.

Employee monitoring isn’t going away, but the regulatory environment around it is tightening, and the workforce’s tolerance for undisclosed surveillance is lower than ever. The organizations that get ahead of this are the ones that can clearly explain three things: here’s what we track, here’s why, and here’s what we do with it.