Even just a few years ago, the concept of using artificial intelligence (AI) in everyday life was a novel, even if it was a somewhat scary concept. But from Google’s AI overview to Microsoft’s co-pilot, many of us use AI every day to increase efficiency and streamline certain processes. Being an employer using AI, you need to organize your job postings and resumes, make decisions based on background check information, and sort the criteria for your promotion or termination decision to take into account the legal implications of increasingly involved federal and state laws.
State and local legal landscapes
Some state legislatures and local governments have begun reviewing or issuing guidance or laws aimed at preventing employment discrimination caused by the use of AI tools in attempting to preempt any issues. For example, New Jersey has issued guidance that shows that the use of AI in employment decisions is subject to the same anti-discrimination laws as non-AAI decisions, and is responsible for discrimination caused by AI tools that employers have not designed. Both Colorado and Illinois passed laws in effect in 2026, prohibiting employers from using AI in discriminatory ways and prohibiting certain disclosures when using AI in certain employment decisions. New York City passed local laws in July 2023, regulating the use of AI in employment decisions. Maryland and California have proposed AI laws, but they have not yet been passed, and many more states are in the early stages of considering laws regulating the use of AI employers in employment decisions.
Where is the federal government on this issue?
It is unlikely that federal law is approaching right now, but it may change over the next few years. In 2023 and 2024, the Equal Employment Opportunity Commission and the Ministry of Labor issued guidance on the use of AI in employment decisions. The guidance was rescinded after President Trump’s January 2025 executive order rescinded and rescinded the directive that acted as a “barrier” to “AI innovation.”
What now?
Although this is an evolving field, employers, particularly those with remote employees across the United States, must remain up to date with state or local laws regarding the use of AI in employment decisions. As a general rule, make sure the AI you use complies with the federal anti-discrimination laws. Other best practices include:
I have a policy on how to use and how to use AI. Please reject AI vendors and make sure you are considering potential negative effects of your product. Notify employees or prospective employees that they are using AI for employment decision-making. Periodically audit AI results to see if protected groups are disproportionately affected. Make sure that the employees responsible for implementing AI tools are properly trained and using such tools properly. Consult with a subject expert or attorney if necessary.
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