The continued rise of artificial intelligence in employment law

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As 2024 begins, the use of artificial intelligence (AI) by employers shows no sign of slowing down. Rather, employers should prepare for an increased use and presence of AI in employment decision-making, as well as employee engagement with their employers.

Throughout 2023, an increasing number of states and cities began limiting the use of AI in employment decision-making, and the EEOC’s draft Strategic Enforcement Plan likewise outlined the EEOC’s intended approach with respect to employers’ use of AI. As the year progressed, both states and the federal government continued to crack down on the use of AI in employment in cases where its use resulted in intentional discrimination or discriminatory impact.

More specifically, multiple states proposed legislation in 2023 addressing individuals’ data privacy rights, with some of this legislation including provisions addressing the use of AI in the employment context. In Washington, for example, the People’s Privacy Act sought to prohibit covered entities from, among other things, “the use of artificial intelligence-enabled profiling to make decisions that produce legal effects or similarly significant effects concerning individuals” (including with respect to employment opportunities). Although this specific legislation has not passed through committee, this governmental activity signals that states are increasingly primed to legislate this intersection of technology and employment law.

Similarly, the EEOC’s finalized Strategic Enforcement Plan for 2024-2028 included six “subject matter priorities,” with the first being “eliminating barriers in recruitment and hiring.” Within this subject matter priority, the EEOC stated it will focus on “the use of technology, including artificial intelligence and machine learning, to target job advertisements, recruit applicants, or make or assist in hiring decisions where such systems intentionally exclude or adversely impact protected groups.” The SEP likewise advises that the EEOC will focus on “the use of screening tools or requirements that disproportionately impact workers on a protected basis, including those facilitated by artificial intelligence or other automated systems, pre-employment tests, and background checks.”

EEOC pursuing AI discrimination claims

The EEOC’s Strategic Enforcement Plan was not the end of its involvement with respect to AI and employment decision-making in 2023; rather, the EEOC made headlines when it settled its first case involving AI discrimination in the workplace. As previously addressed in the article “EEOC targeting discriminatory use of artificial intelligence,”  in EEOC v. iTutorGroup, Inc., et al., Civil Action No. 1:22-cv-02565, the EEOC asserted claims of age and gender discrimination against three integrated companies providing English-language tutoring services to students in China. According to the EEOC, the companies’ tutor application software automatically rejected female applicants, applicants over the age of 55, and male applicants over the age of 60. The defendant companies settled the lawsuit with the EEOC for $365,000, along with their agreement to adopt anti-discrimination policies, conduct training, and more.

Increased employee use of AI in the employment context

Significantly, AI in the employment context is not only used by employers. Employers should expect employees to continue to utilize this technology moving forward. For example, “Moms First,” a national non-profit organization, partnered with other philanthropic entities and AI research/development companies (including OpenAI) to create PaidLeave.ai, a website that explains New York’s paid leave laws and helps those seeking such leave to obtain it. According to its website, PaidLeave.ai was “designed to simplify [an individual’s] journey, providing clear answers and support every step of the way—from understanding [the individual’s] eligibility to navigating paperwork and planning [his/her] leave.” Critically, the website intends to help provide documents and supporting resources that the individual “can bring to [his/her] HR manager.” Although this resource is currently set to support only those seeking paid leave in New York, the potential for similar resources to arrive with respect to other state leave laws (or even federal leave laws, such as the Family and Medical Leave Act) is not out of the question.

Tips for employers in 2024

How should employers prepare for AI’s role in the employment context in 2024? Here are a few tips to keep in mind:

  • If you are an employer that uses (or intends to use) AI in employment decision-making, ensure that these processes comply with any applicable state law, as well as the guidance from the EEOC’s Strategic Enforcement Plan. Employers should be aware that failure to follow these laws and EEOC guidance can lead to costly litigation, as exemplified by the iTutorGroup
  • Prepare for more sophisticated requests for leave and accommodation, as well as potential complaints of discrimination, from employees using AI to draft such documentation/requests.
  • Ensure policies/procedures address the use of AI by employees (e.g., the submission of the company’s or its customers’ confidential information to AI platforms).
  • Consult with counsel regarding any questions related to the use of AI in the employment context, whether such use occurs from the employer or the employee.