Potential legal issues to be aware of when using AI in the workplace

May 7, 2021

Artificial Intelligence (AI) is becoming increasingly more commonplace in the workplace. Largely, the law is playing catch-up with the advances in AI. There are plenty of bills dealing with AI issues being introduced but, more often than not, the bills fail to pass (see more here).

While we must wait to see how state and federal governments manage the developments in AI and the use of AI in the workplace, there are still plenty of pitfalls you may encounter when using emerging technologies.

Potential legal pitfalls of AI in Hiring

The potential uses for artificial intelligence in hiring are significant. CV assessments and job board scraping, for instance, promise better candidates and faster, cheaper hiring processes. For instance,

  • AI is routinely used to scan thousands of CVs online to find qualified candidates for hirers.
  • AI tools are being used in finance and hospitality to analyze ‘employability’ based on facial movements, speaking voice, and other factors. Leading software, HireVue is used by Hilton, Goldman Sachs, and hundreds of other companies.
  • Chatbots are being used to conduct screening interviews.
  • Read more examples of AI in hiring processes here.

AI in hiring poses significant risk for discrimination claims.

AI tools work by learning to observe patterns in past hiring trends. In hiring, they look at the CVs of past successful and unsuccessful candidates and learn to identify patterns that predict success. This can easily lead to preferential treatment of candidates from certain genders or ethnicities.

Manipulating AI tools to simply remove consideration of certain traits, like gender or name, doesn’t resolve the issues entirely either. Because the way humans use language reveals a lot about them. Men, for instance, are more likely to use words like ‘engineer’ and ‘captured’ on their CV. Women are more likely to use ‘community’ and ‘assist. So, even where an AI is directed to ignore gender, the AI tool may still exhibit bias (see more here).

To compound the issue, many AI providers contract out of their liability via non-liability clauses in their service contracts. Therefore, employers need to approach the use of AI in hiring with eyes wide open to potential issues.

You need to be certain about how your AI hiring tools work and mitigate against any potential biases – perceived or actual. Your HR team should be equipped to manage the risk against AI bias in hiring. You can achieve this by:

  • Ensuring hiring processes and policies are documented and followed,
  • Training the HR team on the risk of bias in AI, and
  • Continuing to rely on human assessment of candidates and using AI as an auxiliary tool, not a replacement.

Potential privacy concerns when using AI in the workplace

Artificial intelligence tools rely on access to historical and current data to function. Any personal information that is collected, stored, accessed and/or used by the AI tool must be kept secure. Moreover, you need to be certain that you have consent to share it with the AI tool in the first place. Read more about cybersecurity considerations when choosing third-party providers (like an AI tool software-as-a-service) here.

AI & Employee Surveillance

The employee surveillance technologies available today often sound like something out of 1984: wristbands that track employee movements, glasses that allow employers to see what the employee sees, and click-tracking tech that monitors internet activity.

Employers should be cautious about implementing AI surveillance tools – particularly if you intend to base performance reviews and/or disciplinary action on the insights gleaned by those tools. These tools open a legal quagmire, with potential implications under labor law, privacy law, human rights law, union protections, discrimination laws, and unfair dismissal protections.

Be sure to speak with your legal counsel before implementing any AI-enhanced employee surveillance tools to ensure you aren’t breaching any workplace laws.

If you need help navigating legal compliance issues when implementing AI at your workplace, reach out. We’re here to help.


The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this website or any of the e-mail links contained within the site do not create an attorney-client relationship between CGL and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

Other Articles

May Developments in California Privacy Law
3 Tips to Aid Strategic Deal Making During COVID-19
Privacy Shield Framework ruled invalid by EU Court with massive consequences for US businesses

    Ready to Talk?
    Contact Us

    We would to hear from you

    Please take a moment to tell us a few things about your needs and someone from our team will reach out to you as soon as possible.

    We would to hear from you

    Thank you for reaching out!

    Someone from our team will get back to you shortly

    We would to hear from you