Employers are increasingly using new decision-making tools, including those with artificial intelligence, to assist them in making employment decisions such as hiring, promoting, and firing employees. Recently, the Equal Employment Opportunity Commission (EEOC) issued new guidance to help employers abide by Title VII of the Civil Right Act of 1964 when using algorithmic decision-making technology during the selection process. The full guidance is available here.
The guidance explains how employers can identify and prevent algorithmic decision-making tools from having an unlawful “adverse impact” during the selection process. Adverse impact occurs when the employer’s selection procedure causes a selection rate for individuals in a protected class that is “substantially” less than the selection rate for individuals in another group.
AI Tools May Be Helpful, But Are Their Actions Lawful?
As the guidance explains, algorithmic decision-making tools can be helpful, but solely relying on them may lead to an adverse impact in the selection process. For example, an employer might use resume scanning software that prioritizes applications or resumes that use certain key words that are indicative of the applicants’ likely qualification for the position applied for. However, if the resume scanning software disproportionately excludes employees of a particular race, color, religion, sex, or national origin, use of that screening device is unlawful unless the employer can demonstrate the test or selection procedures is “job related for the position and consistent with business necessity.”
In its recent guidance, the EEOC clarified that the use of algorithmic decision-making tools to make or inform decisions about whether to hire, promote, or terminate applicants or employees would qualify as a selection procedure under the EEOC’s Uniform Guidelines on Employee Selection Procedures under Title VII (the “Guidelines”). These Guidelines set forth the requirements that employers must follow to determine if their tests and selection procedures are lawful for purposes of Title VII’s adverse impact analysis.
Who’s Ultimately Liable, The Employer or the Software Provider?
An employer can be held liable for discriminatory selection procedures under Title VII, even if the selection procedure was developed by an outside vendor. As a result, employers must work carefully with such software vendors to ensure use of algorithmic decision-making tools do not violate the employer’s legal obligation to avoid disparate impact in its selection decisions.
K|W|W attorneys continue to monitor developments in artificial intelligence and their effects on the workplace and employers’ compliance obligations. If you have questions about the EEOC’s latest guidance or need assistance with assessing your employee selection processes, please contact any K|W|W attorney. At K|W|W, your workforce is our priority.