Automated Hiring Tools: Are Yours Subject to AI Regulation?

Automated technologies are playing an increasing role in the hiring process at many companies, but as this Orrick memo points out, there comes a point where the amount of AI used in hiring tools may subject them to regulation.  When do those automated hiring tools cross the line? This excerpt provides some insights:

Lawmakers around the world are targeting varied uses of automated hiring tools, but the threshold for triggering additional regulation generally requires:

– Autonomy: The tool operates with a degree of autonomy, such that it is not entirely or substantially reliant on human involvement to facilitate its processing. Certain laws, like the EU AI Act, place a greater emphasis on the capacity of the tool to infer how to generate outputs to bring about this autonomy.

– Influence: The tool replaces or has a substantial influence over a traditionally human decision-making process.

– Impact: The decision made by the tool, or based on the tool’s output, has a legal or similarly significant effect on an individual’s life, including in relation to their access to or the terms of employment or job opportunities (such as hiring, promotion, termination, task allocation or pay).

The memo offers a list of seven questions companies should ask to determine whether their hiring processes are subject to AI-related regulation.  It also recommends that in order to meet compliance obligations or put in place guardrails to avoid using the kind of automated tools that would trigger regulation, companies should consider adopting an AI Recruiting, Hiring & Human Resources Policy that addresses their approach to the use of automated tools in the employment context.