Workforce Waivers and State AI Preemption
By Jennifer Butler, December 10, 2025
Congress remains consumed by year-end negotiations, with lawmakers scheduled to stay in Washington through next week to complete a short list of “must-pass” items—most notably the annual defense policy bill. At the same time, Republicans continue to battle internally over health care. A group of Senate Republicans is circulating a proposal to extend the enhanced ACA premium tax credits for two years, with an expected vote tomorrow. House Republicans have drawn a very public line that they will not consider any extension. That standoff is unlikely to be resolved quickly and will carry into next week.
But for this edition, we step outside the congressional gridlock and focus on two major developments emerging from the executive branch: new Department of Labor guidance giving states far greater flexibility to redesign workforce programs, and a looming executive order from President Trump that could significantly limit states’ ability to regulate artificial intelligence. Let’s jump in.
DOL Opens the Door for States to Redesign Workforce Programs
Last month, the U.S. Department of Labor’s Employment and Training Administration issued guidance encouraging states to use waiver authority under the Workforce Innovation and Opportunity Act (WIOA) to modernize how services are delivered and to remove barriers that limit innovation.
For context, WIOA is the nation’s primary federal workforce statute. It governs how states administer job training, adult and dislocated worker programs, youth programs, and the network of American Job Centers. States must submit multi-year WIOA plans, adhere to federal performance metrics, and follow specific funding and governance structures.
DOL is urging states to strategically use waivers to redesign their workforce systems around local needs and employer demand rather than rigid federal prescriptions. This push comes in light of a long history of concerns that the federal job-training system has been plagued by poor outcomes, including minimal earnings gains, weak alignment with employer needs, and high rates of non-completion. States have also noted that some local workforce boards are dominated by unions or other entrenched interests that steer training dollars toward their own programs, regardless of performance or employer relevance..
Under the new guidance, states are encouraged to pursue waivers that would:
Redesign workforce board structures, including designating the state board as the local board
Pilot AI-related training models using existing WIOA funds
Align WIOA with state higher education and apprenticeships strategies
Reduce administrative overhead and compliance burdens
Test performance-based funding approaches to drive better accountability and outcomes
Additional Resources
Interested in learning more? Contact Jennifer Butler to connect with policy experts that can assist with state-level waivers.
Trump Executive Order to Preempt State AI Regulations
Earlier this week President Trump announced that he intends to issue an executive order to block state-level artificial intelligence regulations, asserting that the U.S. needs “one rulebook” for AI to maintain global competitiveness. The move aligns with long-standing Silicon Valley requests for federal preemption and follows two recent failed attempts to include similar language in major legislation: the One Big Beautiful Bill and the National Defense Authorization Act (NDAA). Both chambers ultimately stripped preemption language after bipartisan objections.
This expected EO is also consistent with the Administration’s broader AI agenda. Since January, the White House has issued multiple AI-related executive orders and released America’s AI Action Plan in July 2025, a sweeping blueprint for accelerating AI innovation, deregulating barriers to deployment, and expanding AI infrastructure. The Action Plan explicitly calls for reviewing state “burdensome AI regulations” when federal agencies distribute grant funding and directs agencies to consider limiting funding to states whose AI rules “hinder innovation.”
Provisions in the Executive Order
Based on public statements and draft text circulated over the past month, the EO is expected to:
Preempt state AI statutes and establish a federal approval and oversight framework for certain AI systems
Create a DOJ AI Litigation Task Force and direct the Attorney General to sue states to overturn existing AI laws
Allow agencies to withhold broadband and other federal grants from states that enforce their own AI rules
Administration officials argue that the U.S. cannot lead globally if companies must navigate 50 different regulatory regimes.
State Action on AI
States have moved aggressively to fill the gap left by the absence of federal AI legislation. In 2025:
All 50 states and territories introduced AI-related bills
38 states enacted roughly 100 AI laws, including:
Colorado: required safety testing and transparency for “high-risk” AI systems, including hiring tools
California: enacted deepfake election protections and an AI safety evaluation framework
Texas: passed restrictions on sexually explicit AI-generated content involving minors
Utah: adopted broad AI disclosure requirements for consumer-facing tools
New York: expanded hiring and workplace discrimination protections related to automated decision systems
Virginia: created a voluntary AI governance program for companies building high-risk systems
Legal Background and Concerns
The Administration’s ability to nullify state AI laws through executive order rests on very shaky ground. Federal courts have long held that preemption is a legislative, not executive, function. The expected EO also intrudes into areas traditionally reserved to the states, including consumer protection, child safety, and employment discrimination. Even Republican officials are raising alarms: Florida Governor Ron DeSantis called the proposal clear federal overreach and several GOP senators have expressed discomfort with forcing states to repeal AI safety or privacy laws.
As always, we’ll continue tracking these developments closely. Since our next edition falls on Christmas Eve, we’ll be taking a brief pause—you won’t hear from us again until the New Year.
Wishing you a wonderful holiday season and a very Happy New Year.
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