Navigating The Legal Landscape of AI In Employment Decisions

by | Feb 15, 2024 | Compliance

Emerging technologies have reshaped the workplace and transformed the way we approach hiring decisions. At ACI Background Checks, we delve into the realm of automated employment decision tools and the legal aspects surrounding AI and hiring. Our focus lies in striking the perfect balance between innovation and compliance as we skillfully navigate the legal landscape of AI in employment decisions and background checks.

The prevalence of artificial intelligence (AI) in the employment lifecycle has led to the widespread integration of automated tools in decision-making. However, the use of these tools raises concerns about potential bias introduced by algorithms. From filtering job applications to making hiring, retention, promotion, and termination choices, employers heavily rely on these AI-driven tools. While the promise of technology streamlining decision-making is appealing, it also brings significant risks and may impose compliance requirements on employers who opt to incorporate AI into their processes.
Algorithmic bias is a pressing issue in the AI-driven employment landscape. Similar to humans, algorithms are susceptible to bias, and lawmakers and regulators have been paying increasing attention to this matter. President Biden recently took action by signing an Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. This order establishes new standards to ensure the safety and security of AI, safeguard privacy for Americans, promote equity and civil rights, support consumers and workers, stimulate innovation and competition, and position the United States as a leader in AI worldwide.

The focus on AI in relation to employment has gained momentum, as evidenced by a statement issued by the Consumer Financial Protection Bureau (CFPB), Equal Employment Opportunity Commission (EEOC), Federal Trade Commission (FTC), and Department of Justice (DOJ) addressing issues of discrimination and bias.

The EEOC has taken the initiative to focus on artificial intelligence and algorithmic fairness. EEOC stresses the importance of safeguarding against discrimination through technological advancements.

EEOC assessing adverse impact in software, algorithms, and artificial intelligence used in employment selection procedures under Title VII of the Civil Rights Act of 1964

On the federal front, numerous bills were introduced during the 2023 legislative session, but only a few made progress. One such bill aimed to enforce certain obligations on employers in California regarding the evaluation of automated employment decision tools. While it did not pass, there is a possibility of reintroduction in future sessions, highlighting the importance of employers keeping a close eye on developments in this area. A similar bill has resurfaced in Washington, D.C., with less severity compared to previous versions, focusing on preventing discriminatory actions by AI tools in employment decisions. It is expected that similar bills will emerge in statehouses across the nation in 2024.

As these state and local measures continue to develop, employers must proactively and attentively navigate the AI-driven landscape when making employment decisions. While we have provided information on existing and emerging guidance, regulations, and laws, it is crucial for employers to comprehend the practical implications and adopt best practices in this rapidly evolving field.

Employers recognize that AI has the power to greatly improve the efficiency and accuracy of different aspects of the employment process. It holds the promise of significant advancements in terms of speed and precision, ultimately benefiting employers in their pursuit of optimal results.
AI has immense potential to enhance employment decisions by using scoring and predictive analysis. Employers often have an abundance of factual data about their workforce but struggle to effectively synthesize and make sense of this valuable information.
The background check industry is finding new ways to use AI in order to enhance the employment screening process, in addition to scoring and predictive analysis.
AI has the potential to greatly improve background checks. It can be used to confirm identities by comparing personal information, validate credentials, and analyze locations to narrow down someone’s whereabouts during a suspected crime.
One valuable use of AI in background checks is analyzing disputed candidate information. AI helps identify trends and areas for improvement, resulting in higher-quality background reports.

The use of AI in employment decisions is constantly changing. Employers need to adjust and comply with legal requirements, while also recognizing the role of technology in shaping how we make employment decisions in the future. Contact us to discuss how we can assist with your organization employee background checks.