By Ty Hyderally, Esq. and Kenny Delgado

November 26, 2024

Artificial Intelligence (AI) is becoming omnipresent in every aspect of our lives. Companies have turned over portions of their processes to AI to lower costs and increase efficiency. However, implementing new technology does not exempt employers from anti-discrimination guidelines and protections. Although many states, including New Jersey and New York, have yet to pass laws fully establishing the guardrails around AI, the Equal Employment Opportunity Commission (EEOC) has released guidelines to ensure that AI is compliant with previous efforts to prevent discrimination.

AI hiring and the companies that utilize algorithm-based programs must comply with the protections of Title VII of the Civil Rights Act of 1964. Title VII prohibits employment discrimination based on race, color, religion, sex, or national origin. This protection extends to practices that have been automated via AI software, including HR responsibilities.

EEOC Guidance on AI and Algorithm-Based Hiring Practices

AI is an algorithm-based decision-making tool, making it part of an employer’s “selection procedure.” Therefore, employers using AI must apply guidelines designed to prevent discrimination. AI needs to be evaluated to ensure it is not causing discriminatory evaluations. This is done by assessing if there is a group receiving substantially less selection than individuals from another group. If this occurs, then the use of AI violates Title VII.

Employers are responsible for the results of using AI hiring software. Often, employers use outside software from a vendor to develop hiring practices. However, employers are responsible for the actions of their agents and contractors, including software vendors. It is up to the employer to evaluate and take steps to assess the software being used. If the employer finds bias in the software, it is their responsibility to correct the usage of a product that is creating biased outcomes.

The Four-Fifths Rule

A general rule of thumb set forth by the EEOC to establish whether there are substantially lower hiring rates is the four-fifths rule. This guidance states that if the selection rate of a minority group is less than 80% of the majority group, there may be a substantial issue with the hiring process of a company. This guidance can be used to evaluate the biases of AI software and initiate investigations into the practices used by a company. AI is not excluded from this evaluation. The four-fifths rule is not definitive proof of discrimination but is a quick way to determine if more investigation is needed.

Employer Responsibility

It is up to the employer to evaluate the software they use and to be vigilant for issues that may arise from using AI software. Choosing software prone to selection process biases instead of a program with a stronger algorithm can open an employer to liability. An employer may not be immediately aware of biases within an algorithm used by a contracted software, but upon discovering such an issue, it is vital that the employer take action to replace the software and correct the issue.

As technology and AI gain more prominence in all aspects of business, it is important to protect employees from falling victim to less obvious, algorithm-based discrimination.

And here was a utilization of AI to turn the above into a poem

Guarding Fairness in the Digital Age

In the realm where algorithms reign,

Where data flows through every vein,

AI steps in, a modern sage,

Yet bias lurks, a hidden cage.

From New York’s streets to Jersey’s shore,

Laws evolve, but there’s still more,

To shield the workforce, keep them free,

From unseen chains of AI’s decree.

Title VII stands tall and bright,

Against the shadows, it sheds light,

No race, no color, creed, or sex,

Shall face the bias AI projects.

The EEOC, with guidance clear,

Ensures that fairness perseveres,

The four-fifths rule, a beacon true,

To check the paths that AI drew.

Employers bear the weighty role,

To vet the software, keep control,

For in their hands, the power lies,

To break the chains, to clear the skies.

So as we march through tech’s embrace,

Let’s guard each worker, every race,

For in this age of code and steel,

Humanity’s heart we must reveal.

En nuestra firma hablamos español. This blog is for informational purposes only. It does not constitute legal advice and may not reasonably be relied upon as such. If you face a legal issue, you should consult a qualified attorney for independent legal advice regarding your particular set of facts. This blog may constitute attorney advertising. This blog is not intended to communicate with anyone in a state or other jurisdiction where such a blog may fail to comply with all laws and ethical rules of that state or jurisdiction.