The Legal Impact of AI on HR


It’s a fair question considering its growing use in everyday life. It’s also a question that can and should be debated, especially when looking at it through the lens of human resources. Privacy issues. Data issues. Issues of bias. And those are just a few of the big ones. That said, the purpose of this article isn’t to argue for or against the use of AI as an HR tool, but to look at the current state of the legal situation around the technology.

AI and Legality
This year alone the federal government and several state governments have started to take action on issues related to artificial intelligence. In some cases, lawmakers have already legislated artificial intelligence-related technology and how it can be used. None of the laws thus far, save for one, were specific to human resources, but that could certainly change.

Even with the potential legal issues, the use of AI in HR is on the up-and-up. In our 2019 HR Tech Global Report, we asked how companies were using artificial intelligence. In both 2017 and 2018, the majority of respondents said they weren’t using the technology. But those that were using it, mostly, say they’ve applied to their recruiting strategy. Additionally, note the use of chat bots rose from 2017 to 2018; from three percent to 12 percent.

For more findings and to download the full 2019 HR Tech Global Report from the HR Exchange Network, click here.

In a study from Oracle and Future Workplace LLC, about 53 percent of all U.S. businesses are using some type of AI-driven technology. The global average of AI adoption is around the 50 percent mark. That’s up around 18 points from just the previous year when the number was around 32 percent.

There are even some who believe legislation around AI could drive that number up even more and compel more companies to adopt artificial intelligence. Patrick Thibodeau quoted a consultant in his article on the topic who said “laws could create better transparency around AI and help provide an ethical framework for its use.”

Federal AI Laws
So far, not much as really happened regarding AI at the federal level.

In April, a bill was introduced focusing on regulations related to automated decision making systems. The Algorithmic Accountability Act would give the Federal Trade Commission the ability to regulate this particular AI technology. The legislation was filed in the U.S. Senate by New Jersey Democratic Senator Cory Booker and Oregon Democrat Ron Wyden. New York Democratic Representative Yvette Clarke is sponsoring the U.S. House version of the bill. So far, no action has been taken.

State AI Laws
There has been more action on these types of laws at the state level.

Illinois was one of the first states to create a specific HR artificial intelligence-related law. It regulates how AI-enabled video to screen job candidates is to be used. When the law goes into effect next year, businesses using the technology will be required to tell job candidates they are using it, how it works and what it is analyzing from the recorded video.

In California, the state has regulated the use of chat bots. The “Bolstering Online Transparency” or B.O.T. Bill became law on July 1, 2019. According to WIRED, the law “requires all bots that attempt to influence California residents’ voting or purchasing behaviors to conspicuously declare themselves.” In other words, the person interacting with the bot must be told they’re interacting with a bot.

There is no indication, however, the B.O.T. Bill in anyway impacts HR, but there’s no doubt as HR implements the technology more and more there will be some form of legal regulation around its use.

“The most common ways workers prefer to tap AI is to get unbiased information, maintain work schedules and solve specific problems. That could mean launching a chatbot (an AI-powered service that allows users to ask questions and receive answers) to answer questions around company policies, health insurance information, remaining vacation days, conflict resolution and so on…”

Jennifer Liu, Reporter, CNBC

In Summation
HR professionals, at least right now, are waiting to see how the artificial intelligence issue shakes out in the months and years to come. The technology is continuing to learn and change. As it does, so too will human resources’ use of the technology. This article clearly demonstrates companies must be aware and prepared to temper artificial intelligence initiatives within context of the legal system. Knowing what information is being collected and how it’s being used must always be top of mind.

And prepared to be transparent.

There is no doubt new guidelines will need to be developed, not only to determine how companies and organizations use the technology, but to put in place key security and privacy regulations. These will be needed to protect employees AND their employers from data hackers to bias and everything in between.

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