AI and Compliance, Employers Brace for a Brave New World

Over the last decade, more and more companies have utilized automated tools to aid in hiring, training, retaining. Common examples of this include HR departments using AI tools to screen applications or resumes and managers using AI or other automated tools to monitor worker productivity. Historically, when practices and technologies are adopted rapidly, the law takes time to catch up and this is no different, with 2023 looking to be a year where companies are going to come under more detailed regulatory and compliance regimes focused on AI.

In California, for example, people applying for jobs now have newly granted data and privacy rights, and employers must fall into compliance with the new laws which came into effect at the beginning of the year. In New York City, meanwhile, Local Law 144 will require companies using automated tools and software in the hiring process to give notice to applicants. The same is true of companies that use these tools in promotion. These requirements go into effect in April 2023.

State legislatures in Washington, New Jersey and New York are also considering laws that would define new digital and privacy rights for residents in those states, which would include regulating the use of AI for hiring and requiring employers to notify applicants about the use of such tools. 

At the Federal level, the EEOC has become increasingly involved in addressing AI while the National Labor Relations Board is staking out a position skeptical of the use of automated tools to hire and monitor workers.