H.262 is a proposed bill designed to regulate the electronic monitoring of employees and the use of automated decision systems in employment-related decisions. It introduces a new section, 21 V.S.A. 495q, which defines important terms such as "algorithm," "automated decision system," and "electronic monitoring." The bill sets forth strict requirements for employers engaging in electronic monitoring, including the necessity of providing advance notice to employees, limiting monitoring to specific purposes, and safeguarding the collected data. It also prohibits monitoring practices that violate labor laws or infringe on employees' rights, as well as restricts the use of automated decision systems that could lead to discrimination or privacy violations.

Furthermore, the bill mandates that employers cannot require employees to use personal devices for monitoring unless essential for job functions and limits tracking to necessary times. It prohibits reliance solely on outputs from automated decision systems without human oversight and requires employers to conduct impact assessments to ensure compliance with notice requirements regarding the system's purpose and data usage. The legislation also emphasizes employee privacy by mandating reasonable security measures for personal data, granting employees the right to access and correct their data, and prohibiting retaliation against those exercising these rights. The bill is set to take effect on July 1, 2025, aiming to promote transparency and fairness in workplace monitoring and decision-making processes.