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TOOLKITS

Using Artificial Intelligence for

Employment Purposes

Overview

Feedback
Artificial intelligence (AI) is the use of machines and software to perform tasks that
typically have required human intelligence to complete. These machines can range from Overview (www.shrm.org#overview)

a laptop or cellphone to computer-controlled robotics. Software programs, which give How Is AI Used by HR?

directions to control the behavior of the machine, are specialized to mimic human (www.shrm.org#how-ai-is-used)

intelligence and capabilities. The coupling of hardware and this software brings about Legal Issues (www.shrm.org#legal-

artificial intelligence. issues)

Global Considerations
A workplace run by AI is not a futuristic concept. Such technology is already a part of the
(www.shrm.org#global-
workplace and will continue to shape the labor market. Nearly 1 in 4 organizations
considerations)
reported using automation or AI to support HR-related activities, according to a 2022
Transparency
survey by SHRM. The report found that 85 percent of employers using automation or AI
(www.shrm.org#transparency)
said it saves time or increases efficiency.
Vendor Selection

See: (www.shrm.org#vendor-selection)

Mitigating Bias in AI
The Promise and Peril of Artificial Intelligence (www.shrm.org/hr-today/news/all-things-
(www.shrm.org#mitigating-ai-bias)
work/pages/the-promise-and-peril-of-artificial-intelligence.aspx)
Additional Resources

What is artificial intelligence and how is it used in the workplace? (www.shrm.org#additional-resources)

(www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/what-is-artificial-
intelligence-and-how-is-it-used-in-the-workplace.aspx)

SHRM Research: AI Use on the Rise, Ethics Questions Remain (www.shrm.org/resourcesandtools/hr-topics/technology/pages/shrm-

research-ai-use-rise-ethics-questions-remain.aspx)

Not All AI Is Really AI: What You Need to Know (www.shrm.org/resourcesandtools/hr-topics/technology/pages/not-all-ai-is-really-ai-

what-you-need-to-know.aspx)

How Is AI Used by HR?

AI is being used in the workplace to manage the full employee life cycle, from sourcing and recruitment to performance management
and employee development. Recruitment and hiring are by far the most popular areas where AI is used for employment-related
purposes. However, AI can be utilized in almost any human resource discipline. See Bringing Artificial Intelligence into Pay Decisions
(www.shrm.org/resourcesandtools/hr-topics/compensation/pages/bringing-artificial-intelligence-into-pay-decisions.aspx) and The Role
of AI in Retaining Top Talent (www.shrm.org/resourcesandtools/hr-topics/technology/pages/the-role-of-ai-in-retaining-top-talent.aspx).

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Feedback
Source: SHRM survey of 1,688 active SHRM members, February 2022.

AI, however, won't replace the need for human involvement in most scenarios. As this toolkit discusses, human intervention is
necessary to audit AI outcomes. And, in some cases, human interaction is preferred. While a chatbot may be sufficient to screen
candidates for entry-level jobs in, say, retail or fast food, no organization is going to leave the selection of a C-suite executive to a robot.

AI in HR also presents an opportunity for new roles, such as developing the software programs that power the humanlike intelligence,
or training AI programs with efficient prompts. Though these roles may not seem like traditional HR, bringing HR expertise to these
emerging fields will help shape the future of workplaces.

Legal Issues

While technology can make processes better and faster, employers should be aware of some areas of concern when utilizing AI.

There are currently no federal laws specific to the use of AI in employment decisions; however, nondiscrimination laws such as Title VII
of the Civil Rights Act, the Americans with Disabilities Act (ADA) and the Age Discrimination in Employment Act (ADEA) apply. The use
of AI can also trigger compliance issues with other employment laws, such as the Fair Credit Reporting Act (FCRA) when using a third
party to conduct a background check, or global requirements for employers with a multinational workplace. See Regulations Ahead on
AI (www.shrm.org/hr-today/news/all-things-work/pages/regulations-ahead-on-artificial-intelligence.aspx).

STATE LAWS

Currently, there are a few state and local law requirements specific to AI. Illinois (https://www.ilga.gov/legislation/ilcs/ilcs3.asp?
ActID=4015&ChapterID=68), Maryland (https://mgaleg.maryland.gov/2020RS/chapters_noln/Ch_446_hb1202T.pdf) and New York City
(https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=4344524&GUID=B051915D-A9AC-451E-81F8-
6596032FA3F9&Options=ID%7cText%7c&Search=) are examples of jurisdictions with such laws, and it is likely that more states and
municipalities will follow.

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See:

Employers, Vendors Plan Ahead of NYC's AI Law Enforcement Date (www.shrm.org/resourcesandtools/hr-

topics/technology/pages/employers-vendors-plan-ahead-nyc-ai-law-enforcement-date.aspx)

Illinois Employers Must Comply with Artificial Intelligence Video Interview Act (www.shrm.org/resourcesandtools/legal-and-
compliance/state-and-local-updates/pages/illinois-artificial-intelligence-video-interview-act.aspx)

Legislation Related to Artificial Intelligence (https://www.ncsl.org/technology-and-communication/legislation-related-to-artificial-

intelligence)

TITLE VII DISCRIMINATION

AI can be biased (or in the case of machine learning applications, become biased), creating concerns of illegal discrimination
depending on how the technology and data are used. Understanding how machine learning works and how data is used by AI tools is
necessary to identify and correct any outcome that negatively impacts certain groups of people. See How to Avoid Discrimination
When Using AI (www.shrm.org/resourcesandtools/hr-topics/technology/pages/how-to-avoid-discrimination-when-using-ai.aspx)

Feedback
and EEOC Issues Guidance on Use of AI (www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/eeoc-ai-
artificial-intelligence-title-vii.aspx).

Amazon's automated applicant rating tool is a prime example of adverse impact (www.shrm.org/ResourcesAndTools/tools-and-
samples/toolkits/pages/avoidingadverseimpact.aspx) when using AI. The algorithm Amazon used was based on the number of resumes
submitted over the past decade, most of which were from men. This resulted in the tool being trained to favor men over women.
Amazon abandoned the AI recruiting tool after discovering that it discriminated against women.

Instead of avoiding AI altogether, employers can take measures to prevent bias and illegal discrimination. Understanding the algorithms
that are used and how individuals are screened in, or out, is important when implementing AI tools. Regular review of this information
and the subsequent results is necessary to ensure that the tool isn't learning bias or illegal selection criteria over time.

The Uniform Guidelines on Employee Selection Procedures (UGESP) (https://www.govinfo.gov/content/pkg/CFR-2014-title29-

vol4/xml/CFR-2014-title29-vol4-part1607.xml) are intended to provide a framework for determining the proper use of tests and other
selection procedures in the workplace, to avoid adverse impact. These guidelines can also be applied to the use of AI tools. Employers
can also refer to other professional guidelines, such as the Society for Industrial and Organizational Psychology's Principles for the
Validation and Use of Personnel Selection Procedures (https://www.apa.org/ed/accreditation/about/policies/personnel-selection-
procedures.pdf).

AMERICANS WITH DISABILITIES ACT

There is also a significant concern that the use of AI may disadvantage job applicants and employees with disabilities. The federal
Equal Employment Opportunity Commission (EEOC) has issued guidance (https://www.eeoc.gov/laws/guidance/americans-disabilities-
act-and-use-software-algorithms-and-artificial-intelligence) on avoiding adverse impact under the ADA when using AI for employment
purposes.

Reasonable accommodations must be provided to individuals with disabilities when their medical condition will make the use of the
technology difficult or result in less than favorable results. The EEOC provides the following examples of AI technology that may
negatively impact an individual with a disability:

Video interviewing software that analyzes applicants' speech patterns to reach conclusions about their ability to solve
problems can score an applicant unfairly if the applicant has a speech impediment that causes significant differences in speech
patterns.
A chatbot that is programmed with an algorithm that rejects all applicants with significant gaps in their employment history
could screen out an applicant with a disability if the applicant had a gap in employment caused by a disability (for example, if

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the individual needed to stop working to undergo treatment).

A gamified assessment of memory that has been shown to be an accurate measure of memory for most people in the general
population could screen out individuals who have good memories but are blind, and who therefore cannot see the computer
screen to play the games.

Employers should clearly communicate that reasonable accommodations, including alternative formats and alternative tests, are
available to people with disabilities and provide clear instructions for requesting reasonable accommodations.

AGE DISCRIMINATION

Age bias is another problem employers must watch for when using AI. Consider the example of Amazon's applicant rating tool that
discriminated against women, and imagine instead that the machine learned to identify candidates who graduated from school after a
particular date, or who had .edu e-mail addresses. Either of those possibilities could have an adverse impact on older workers and
violate the ADEA. See EEOC Sues iTutorGroup for Age Discrimination (https://www.eeoc.gov/newsroom/eeoc-sues-itutorgroup-age-
discrimination).

Feedback
BACKGROUND CHECKS

Many background check vendors utilize AI to gather information on an individual's criminal history and other personal information.
Employers may use AI to sort through these background check results. The same biases and discrimination issues found in other
selection procedures can arise and run afoul of the Fair Credit Reporting Act (FCRA) or Title VII.

Avoiding bias and ensuring the technology being used has been carefully vetted are necessary when complying with the FCRA.
Another consideration is the requirement under Title VII for employers to make an "individualized assessment" of a candidate's criminal
history when determining if the information is job-related and consistent with business necessity. This is not something that employers
can leave to technology. This assessment requires employers to consider factors that may not be identified by an algorithm and often
requires a human conversation with the candidate.

Global Considerations

As in the United States, around the world countries are evaluating and regulating the use of AI in the workplace. While the benefits and
concerns of the use of technology in employment decisions are often the same, the regulatory requirements are likely to vary greatly.
Employers should ensure understanding and compliance with laws in all locations where they have employees.

See:

EU: Proposed Artificial Intelligence Law Could Affect Employers Globally (www.shrm.org/resourcesandtools/hr-topics/global-
hr/pages/eu-proposed-artificial-intelligence-law.aspx)

AI's Potential Role in Employee Discipline Draws Attention in Europe (www.shrm.org/resourcesandtools/hr-topics/global-

hr/pages/europe-ai-employee-discipline.aspx)

The Impact of Artificial Intelligence on the Future of Workforces in the European Union and The United States of America
(https://www.whitehouse.gov/wp-content/uploads/2022/12/TTC-EC-CEA-AI-Report-12052022-1.pdf)

Transparency

Some state laws require an employer to disclose to individuals when AI is used in employment decisions, and the EEOC encourages
this practice. The EEOC guidance indicates that employers should provide job applicants and employees who will undergo assessment
by an AI tool with as much information about the tool as possible, including the following:

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Which traits or characteristics the tool is designed to measure.

The methods by which those traits or characteristics are to be measured.
The disabilities, if any, that might potentially lower the assessment results or cause screen-out.

For example, an online assessment could include a what-to-expect screen for job candidates that includes this information, as well as
instructions on how to request a reasonable accommodation.

It is recommended that employers not only be transparent, but also obtain consent from individuals before using AI technology for
employment decisions.

See Report Recommends Transparency When Using AI in Hiring (www.shrm.org/resourcesandtools/hr-topics/technology/pages/report-

recommends-transparency-when-using-ai-hiring.aspx).

Vendor Selection

Employers must vet providers carefully (www.shrm.org/resourcesandtools/hr-topics/technology/pages/hr-gets-help-vetting-ai-

Feedback
tools.aspx) when selecting an AI vendor. Employers can be liable for discrimination claims even when a third party developed the tool.

The following are examples of some possible inquiries about the development of a tool that an employer might consider asking a
vendor:  

What kinds of statistical analysis do you perform to test your products, and how and why did you select those methods?
What were the results of your analysis? Can we have a copy?
Do you retest for disparate impact over time? How frequently?
Can you give references for companies that have used your services or tools?
Do you have diversity consultants or similar staff with whom you consult regarding your tools?
Are the materials presented to job applicants or employees in alternative formats? If so, which formats? Are there any kinds of
disabilities for which you will not be able to provide accessible formats?

Mitigating Bias in AI

Employers that are considering using AI-powered tools in their workplace should consider taking the following actions:

Develop multidisciplinary innovation teams that include legal and human resource staff.
Continue human review of AI-assisted decision-making.
Implement disclosure and informed consent when necessary and appropriate.
Audit what is being measured before implementing the program, and on an ongoing basis.
Impose tight controls on data access.
Engage in careful external vendor contract reviews.
Work with vendors that take an inclusive approach to design. Consider whether the designers and programmers
come from diverse backgrounds and have diverse points of view.
Insist on the right to review external validation studies.

Additional Resources

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Generative Artificial Intelligence (AI) Chatbot Usage Policy (www.shrm.org/ResourcesAndTools/tools-and-

samples/policies/Pages/chatgpt-generative-ai-usage.aspx)

SHRM Resource Page: ChatGPT and AI in the Workplace (www.shrm.org/resourcesandtools/hr-topics/behavioral-competencies/global-

and-cultural-effectiveness/pages/how-chatgpt-could-discriminate-against-applicants.aspx)

Data & Trust Alliance: Algorithmic Safety: Mitigating Bias in Workforce Decisions (https://dataandtrustalliance.org/our-
initiatives/algorithmic-safety-mitigating-bias-in-workforce-decisions)

EEO and DEI&A Considerations in the Use of Artificial Intelligence in Employment Decision Making
(https://www.theinstitute4workplaceequality.org/download-ai-tac-files)

FTC: Using Artificial Intelligence and Algorithms (https://www.ftc.gov/business-guidance/blog/2020/04/using-artificial-intelligence-and-

algorithms)

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