HR Policy Association

CHROs Navigating AI Risks in Employment Practices

While AI offers efficiency, accuracy, and innovation, its application in the workplace is not without compliance challenges. CHROs are at the forefront of grappling with the complex intersection of technology and employment laws as they lead its implementation in their workplaces. 

AI tools utilized in employment practices hold immense potential, but they also present a myriad of legal concerns, ranging from biased training data to discrimination and lack of transparency. These tools can trigger compliance issues with multiple labor and employment laws designed to safeguard employee rights and ensure fair treatment in the workplace. 

The use of AI tools in employment practices implicates various anti-discrimination and wage and hour laws, including Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Genetic Information Nondiscrimination Act; the Fair Labor Standards Act, the National Labor Relations Act and the Fair Credit Reporting Act. 

To aid our member companies and provide guidance, the Association commissioned Littler Mendelson, P.C. to develop a new resource which outlines current AI tools, how they are used in the workplace, and potential labor and employment risks that CHROs and their teams should be aware of. For example, an AI tool designed to measure productivity but inadvertently monitors the productivity of one protected class could run afoul of EEO or violate the FLSA if wages are improperly withheld based on improper monitoring.  

Outlook: While AI presents transformative opportunities for enhancing efficiency and effectiveness in employment practices, CHROs must carefully navigate this landscape to mitigate risks and ensure compliance with labor and employment laws. This is especially important at a time when policymakers at the federal and state level of governments are looking to regulate the use of AI in workplaces. By proactively addressing issues of bias, discrimination, and transparency, companies can stay ahead of potential legal landmines while harnessing the potential of AI and fostering inclusive and equitable workplaces for employees. 

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Authors: Chatrane Birbal



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