Texas Embraces AI Regulation: Essential Insights for Employers from the Texas Responsible Artificial Intelligence Governance Act | Sheppard

The Texas Responsible Artificial Intelligence Governance Act (TRAIGA), enacted on June 22, 2025, by Governor Greg Abbott, is poised to transform AI governance in the workplace. Set to take effect on January 1, 2026, TRAIGA applies to any entity doing business in Texas or developing AI systems impacting Texas residents. It prohibits the deployment of AI systems for discriminatory purposes, emphasizing intent over disparate impact. This mandates rigorous monitoring and documentation to ensure compliance and mitigate penalties, which range from $10,000 to $200,000 per violation. Enforcement lies solely with the Texas Attorney General, intensifying regulatory scrutiny. Employers must conduct internal risk assessments, document oversight intentions, and adopt NIST-aligned compliance frameworks. Critical “do’s and don’ts” for employers include maintaining AI inventory, ensuring ongoing monitoring, providing human oversight, and consulting legal counsel. TRAIGA marks a significant shift in AI regulation, compelling Texas employers to proactively assess and document their AI usage to navigate legal complexities effectively.

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