In 2023, iTutorGroup, an online learning platform based out of China, used an Artificial Intelligence (AI) recruitment software that was programmed to automatically reject all female applicants above the age of 55, and all male candidates above the age of 60. The company was sued for violating the Age Discrimination in Employment Act (ADEA) and paid a fine of $365,000 to more than 200 job applicants. This was the first U.S. bias lawsuit involving AI hiring tools.
As we’ve seen throughout history, societal changes often call for new legislation. In October of 2022, only a year before the iTutorGroup lawsuit, the Equal Employment Opportunity Commission (EEOC) responded to contemporary society’s widespread use of AI by developing a blueprint for an AI Bill of Rights. In 2023, guidance on the use of AI in the workplace was amended to Title VII of the Civil Rights Act of 1964.
There’s no doubt that AI can save HR time and energy. Today, many HR professionals are regularly using AI to help with the following workplace tasks:
As we’ve seen with the iTutorGroup lawsuit, without proper safeguards on the use of AI in the workplace, HR may run the risk of violating the ADEA, The Civil Rights Act of 1964 or other significant discrimination laws.
On May 18, 2023, the EEOC released a technical resource on AI and Title VII called: “Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964.” This document focuses on preventing workplace discrimination.
The document asks the following primary questions:
Does the employer use a particular employment practice that has a disparate impact on the basis of race, color, religion, sex, or national origin?
If so, can the employer show that the selection procedure is job-related and consistent with business necessity?
Is the selection procedure associated with the skills needed to perform the job successfully?
Is there a less discriminatory alternative available?
The “Four-Fifths rule,” published by the EEOC in 1978, states that one rate is substantially different from another if their ratio is less than four-fifths (or 80%). Sometimes, it can be difficult for employers to detect if their processes are biased or discriminatory. The EEOC has developed this rule of thumb to help employers determine if their algorithmic selection processes result in discrimination or involve bias. The technical assistance document uses the following example to explain the rule:
An employer administers a personality test to 80 White applicants and 40 Black applicants. 48 of the White applicants and 12 of the Black applicants advance to the next step. The selection rate is thus 48/80= 60% for White applicants and 12/40 or 30% for black applicants. The ratio of the two rates is 30/60=50%, which is less than 80%, thus failing to meet the requirements of the four-fifths rule. The employer may be able to conclude that the personality test administered discriminates against Black applicants.
Keep in mind that the rule is just a guideline and isn’t applicable in all circumstances. An AI-related employment practice that follows this rule isn’t necessarily lawful.
There has been a push in recent years to ditch the four-fifths rule. According to an AI Bias panel, “The four-fifths rule is a proclamation that practices that keep up to 20% more of a disadvantaged group from being hired should be accepted without further scrutiny.” Thus, the four-fifths rule begs the following question: Is it legal to discriminate by a smaller margin? As an HR pro, you know that it is illegal for a single person to be discriminated against because of the AI tools you use.
The “No Third-Party Shield” states that you could still be held liable for what a platform does on behalf of your employer. Under Title VII, an employer is responsible for its use of algorithmic decision-making tools or AI even if their selection process goes through a third-party entity or software.
So, if I am an HR Party of One at a small business and I decide to outsource my recruitment process to an online recruitment platform, I could still be held liable for any discrimination that occurs on behalf of my employer. That’s why it’s extremely important for HR leaders and hiring managers to analyze, evaluate, and regularly monitor the processes that job sites and recruitment platforms use.
The use of AI in the workplace can also violate requirements under the Americans with Disabilities Act (ADA). According to the EEOC, an employer’s use of algorithmic decision-making tools may violate the ADA by:
As a general rule, screening out an applicant is considered to be a violation of the ADA if the applicant can perform the essential functions of the job, with or without reasonable accommodation.
Lawmakers are focused on the issue of AI as it impacts American society today and aim to protect individual rights, opportunities, and access to resources. This 73 page document titled “The BluePrint for an AI Bill of Rights: Making Automated Systems Work for the American People” was published in October 2022 and highlights the following points:
At our most recent Weekdays with Bernie conference, Meredith Box, a representative from Ford Harrison LLP, urged HR professionals to understand that the responsibility will ultimately fall on them to make ethical choices when using AI.
She shared the following best practices when it comes to protecting your business and implementing AI:
For more information, check out our blog on the implications of using AI during recruitment.
You can stay informed, educated, and up to date with important HR topics using BerniePortal’s comprehensive resources: