Prepare for the Rise of AI in the Workplace

Artificial Intelligence (AI) is rapidly changing how we live and work. To keep up with this technological revolution, both federal and state governments are introducing new rules to ensure AI is used responsibly in the workplace. Here’s an overview of what you need to know about recent federal, state, and local AI developments.

The White House’s Executive Order

In October 2023, President Biden issued a groundbreaking executive order on the “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.” This order pushed federal agencies to create guidelines ensuring AI is used responsibly, especially at work. The goal is to make sure AI helps improve workplaces without causing unfair treatment or discrimination.

Department of Labor’s New Guidelines

Wage and Hour Division’s Bulletin: On April 29, the Department of Labor (DOL) Wage and Hour Division released a bulletin explaining the risks of using AI at work. This bulletin emphasizes the inherent risks associated with AI use and underscores that AI should not replace human oversight. According to the guidelines outlined in FAB, employers must ensure that responsible human oversight accompanies the deployment of AI technologies.

Given the various challenges associated with AI technologies, it is crucial for employers to navigate the complexities while adhering to laws like the Fair Labor Standards Act (FLSA) and others, which stipulate that employers remain accountable for legal issues arising from the use of AI. Even if AI systems autonomously take adverse actions against employees, such actions could potentially constitute retaliation under FLSA and related statutes.

Guidance of Federal Contractors: On April 29, the DOL Office of Federal Contract Compliance Programs issued guidelines aimed at federal contractors utilizing AI, which are valuable for all employers to consider.

These guidelines emphasize several critical practices for the ethical and effective deployment of AI tools in the workplace. Employers are advised to ensure that AI technologies are not only fair and job-related, but also regularly monitored for biases that could inadvertently impact decision-making processes. Additionally, keeping employees well-informed about the use and implications of AI systems fosters transparency and helps mitigate potential concerns or misunderstandings.

These proactive measures not only enhance compliance with federal regulations, but also promote a more inclusive and equitable work environment where AI technologies are used responsibly to benefit both employers and employees alike.

AI Principles for Employers: On May 16, the DOL introduced a comprehensive set of principles aimed at guiding the development and implementation of AI technologies in the workplace. These principles underscore the importance of ethical considerations and employee welfare in AI deployment. They stress the need to keep workers informed about how AI is utilized, ensure transparency in AI decision-making processes, and safeguard worker data throughout the entire AI life cycle.

These guidelines aim to foster a fair and secure work environment where AI enhances operations while upholding privacy and ethical standards. Adhering to these principles helps employers build trust, mitigate risks, and integrate AI technologies responsibly for the benefit of all stakeholders.

State-level Developments

New York: Since July 5, 2023, New York city has a law regulating automated employment decision tools (AEDTs). Employers must conduct annual audits to check for bias, publish the results, and let applicants know when AEDTs are used. In addition, a new bill introduced this past February aims to regulate AEDTs across New York State. This bill requires annual bias analyses and public summaries of the findings.

New Jersey: In February, two bills were introduced in New Jersey to manage AI in hiring. One bill requires annual bias audits for AEDTs. The other regulates AI-enabled video interviews, demanding transparency and consent from applications.

Other States: California is working on regulations to prevent algorithmic discrimination and ensure AI tools are used transparently and responsibly. Starting Feb. 1, 2026, Colorado will require AI developers and users to protect against discrimination with high-risk AI systems. And both Illinois and Maryland have laws in place requiring employers to notify and get consent from applicants before using AI in hiring.

What Should Employers Do?

To navigate these new regulations and ensure compliance, employers should:

• Stay informed. Regularly review federal and state guidelines on AI use in the workplace.

• Conduct regular audits of AI tools to detect and mitigate bias or inequitable outcomes.

• Ensure transparency by clearly communicating to employees and applicants about the use of AI in employment decisions and their rights related to AI.

• Provide training to HR and management teams on the ethical and responsible use of AI tools.

• Consult with legal experts to say ahead of regulatory changes and implement best practices tailored to your organization.

Conclusion

As AI continues to evolve and integrate into the workplace, new and expanded laws will emerge to govern its use. Employers must proactively adapt to these changes to harness AI’s benefits while ensuring compliance with legal standards. If you have questions about any of these developments, it is prudent to consult with labor and employment counsel.

Sabba Salebaigi-Tse is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

Sabba Salebaigi-Tse wrote this article which was featured in Businesswest. Click here to visit their website.