How Can You—and How Shouldn’t You—Use AI in the Hiring Process?

To begin with, employers thinking about using AI such as ChatGPT during hiring and selection need to familiarize themselves with the technology at a conceptual level, and then look closely at—and understand well enough so they can explain to others—how AI integrates with their recruiting tools and practices.

A key piece of state legislation in Illinois pertaining to the use of AI is the Artificial Intelligence Video Interview Act (820 ILCS 42/1), which lays down various stipulations for the recording of video interviews and subsequent use of AI while evaluating said recordings.

To pursue this path in evaluating potential applicants, the employer must disclose prior to each interview that AI might be used to parse the interview and help to evaluate how strong a candidate the applicant might be. Each interviewee also must receive an explanation beforehand how the AI works, and what attributes and features it will employ in its evaluation. And each applicant’s consent must then be obtained for the use of AI in this manner.

At the federal level, the Equal Employment Opportunity Commission (EEOC) has expressed concerns about the potential bias of AI algorithms, promulgating an agency-wide dictum in 2021 to make sure that “artificial intelligence (AI), machine learning, and other emerging technologies used in hiring and other employment decisions comply with the federal civil rights laws.”

The EEOC issued further guidance in 2022 about how AI and machine learning intertwine with—and potentially could violate—the Americans with Disabilities Act. The pronouncement noted that employers are responsible for ensuring—and may be liable if they don’t ensure—that third-party vendors contracted to create and/or use AI tools do not create potentially discriminatory algorithmic processes. The EEOC held a public hearing in January on this matter, and that seems unlikely to be its last word on the topic.

Other jurisdictions have weighed in or could soon pass legislation or publish regulations on the use of AI in hiring. Maryland passed a law in 2020 that required obtaining consent from applicants before using facial recognition services in pre-employment interviews. New York City passed a law that took effect July 5, called the Automated Employment Decision Tools Law, which mandates employers audit their AI tools for potential biases, informs candidates such tools will be used, and publish online information about the tools, and the data they will collect. And California is examining (but has not yet passed any) laws or regulations on the topic.

Bottom line, small businesses need to keep abreast of ongoing developments in the use of artificial intelligence, and the laws and regulations governing same.  There will be many opportunities for small business owners to capitalize on the benefits of AI, but there will be unseen perils arising which may create pitfalls.