FinCEN Delays BOI Filing Enforcement: What Businesses Need to Know
Businesses scrambling to meet the Beneficial Ownership Information (BOI) filing deadlines under the Corporate Transparency Act (CTA) can breathe a little easier. The Financial Crimes Enforcement Network (FinCEN) has announced that it will not enforce BOI filing deadlines or issue penalties until new deadlines are formally established. Key Takeaways: No Immediate Penalties: FinCEN will not impose fines or enforcement actions against businesses that miss the current BOI filing deadlines. New Deadlines on the Horizon: An interim final rule is expected by March 21, 2025, which will extend filing deadlines and provide clearer guidance on compliance. Public Input Matters: FinCEN will seek public input on future revisions to BOI reporting requirements, offering businesses an opportunity to voice concerns and suggest improvements. What This Means for Businesses For companies navigating the complexities of BOI reporting, this delay provides much-needed time to ensure compliance without the immediate threat of penalties. However, businesses should still prepare for the eventual enforcement of the rules and stay updated on the forthcoming changes. At Luchansky Law, we understand the evolving landscape of regulatory compliance and are here to help businesses stay ahead of their obligations. If you have questions about BOI filings, corporate transparency requirements, or other regulatory matters, our team can provide the guidance you need. Stay tuned for updates as FinCEN refines its approach to BOI compliance. In the meantime, if you need assistance navigating these changes, contact Luchansky Law today.
Maryland Delays Paid Family and Medical Leave Insurance Program: What Employers Need to Know
In a significant development, the Maryland Department of Labor has proposed delaying the implementation of the state’s Family and Medical Leave Insurance (FAMLI) program. This postponement aims to provide additional time for businesses and employees to prepare for the program’s rollout, especially in light of recent federal workforce reductions and funding shifts impacting Maryland’s economy. Background on FAMLI Enacted in 2022, the FAMLI program is designed to offer Maryland workers up to 12 weeks of paid leave to care for themselves or family members facing serious health conditions, welcome a new child, or address needs related to a family member’s military deployment. The program ensures job protection and provides a portion of the employee’s wages during the leave period. Proposed Changes Originally, the FAMLI program was set to begin payroll contributions on July 1, 2025, with benefits becoming available on July 1, 2026. However, the Maryland Department of Labor has recommended the following adjustments: Payroll Deductions Start Date: Postponed to January 1, 2027. Benefits Availability Date: Deferred to January 1, 2028. This proposed delay is intended to grant businesses and employees more time to adapt to the new system, especially considering the economic uncertainties arising from recent federal decisions. Maryland Labor Secretary Portia Wu emphasized the state’s commitment to supporting its residents during these challenging times, stating, “State agencies like MD Labor are laser-focused on supporting Marylanders as we all respond in real time to the cascading impacts of federal decisions.” Legislative Actions In response to the proposed delay, Maryland state Senator Stephen Hershey introduced Senate Bill 355, seeking to officially extend the FAMLI program’s effective dates by two years. During a Senate Finance Committee hearing on February 5, 2025, concerns were raised about the readiness of the program’s implementation and its potential economic impact on the business community. Implications for Employers and Employees If the proposed delay is enacted, employers will have until January 1, 2027, to begin payroll deductions for the FAMLI program, with employees becoming eligible for benefits starting January 1, 2028. This extension provides additional time for businesses to adjust their payroll systems and for employees to plan for the upcoming changes. The Moore-Miller administration remains dedicated to implementing a robust paid family and medical leave program that benefits workers while maintaining the state’s economic competitiveness. The Maryland Department of Labor continues to develop the necessary digital infrastructure for claims processing and financial management to ensure a seamless transition once the program is launched. Stay Informed As the situation evolves, it’s crucial for both employers and employees to stay informed about legislative developments related to the FAMLI program. For the most current information and updates, visit the Maryland Department of Labor’s official FAMLI page. Luchansky Law is committed to keeping you updated on this and other legislative matters that impact your business and employment rights. For personalized legal guidance regarding the FAMLI program and its implications, please contact our office at: (410) 522-1020 | info@luchanskylaw.com | www.luchanskylaw.com About Luchansky Law Luchansky Law is a preeminent labor and employment law firm committed to providing exceptional legal representation and client service. Founded in 2004 by Bruce Luchansky, the firm offers a wide range of legal services to businesses and individuals, focusing on workplace issues, employment disputes, and compliance. Luchansky Law is dedicated to upholding the highest standards of diligence, professionalism, and compassion in its practice. Resources OHS Online paidleave.maryland.gov
EEOC Policy Shift Under the New Administration: Key Changes Employers Must Know
The U.S. Equal Employment Opportunity Commission (EEOC) has recently announced several changes under the leadership of Acting Chair Andrea Lucas. These actions are part of an effort to refocus the agency’s mission on protecting women from sexual harassment and sex-based discrimination by rolling back certain gender identity policies from the previous administration. The specific measures implemented by Acting Chair Lucas include: Prioritizing the Defense of Biological Sex: Emphasizing compliance, investigations, and litigation that uphold the recognition of biological and binary definitions of sex, including advocating for women’s rights to single-sex spaces in the workplace. Removing the Pronoun Feature: Eliminating the agency’s “pronoun app,” a feature in employees’ Microsoft 365 profiles that allowed the display of chosen pronouns alongside employee names across platforms like Outlook and Teams. Ending the Use of the “X” Gender Marker: Discontinuing the option to select an “X” gender marker during the intake process for filing a charge of discrimination. Modifying Forms to Remove “Mx.” Prefix: Updating the charge of discrimination and related forms to exclude “Mx.” from the list of available prefix options. Reviewing the “Know Your Rights” Poster: Initiating a review of the EEOC’s “Know Your Rights” poster, which employers are legally required to display in workplaces, with potential revisions forthcoming. Removing Materials Promoting Gender Ideology: Conducting an ongoing review and removal of materials on the EEOC’s website and training programs that promote gender ideology. It’s important to note that certain documents, such as the EEOC’s Enforcement Guidance on Harassment in the Workplace (issued by a 3-2 vote in 2024), the EEOC Strategic Plan 2022-2026, and the EEOC Strategic Enforcement Plan for Fiscal Years 2024-2028, cannot be unilaterally modified or removed by the Acting Chair without a majority vote from the full Commission. In her statement, Acting Chair Lucas emphasized, “Sex is binary (male and female) and immutable. It is not harassment to acknowledge these truths—or to use language like pronouns that flow from these realities, even repeatedly.” She also highlighted that “women have … safety interests, that warrant certain single-sex facilities at work and other spaces outside the home. It is neither harassment nor discrimination for a business to draw distinctions between the sexes in providing single-sex bathrooms or other similar facilities which implicate these significant privacy and safety interests.” These actions represent a significant shift in the EEOC’s approach to issues of sex and gender identity under the current administration. If your business needs guidance on how these EEOC changes impact your workplace policies, Luchansky Law is here to help. Our team stays ahead of evolving employment laws to ensure your company remains compliant and protected. Contact us today to discuss your specific needs and safeguard your workplace. (410) 522-1020 | info@luchanskylaw.com | www.luchanskylaw.com About Luchansky Law Luchansky Law is a premier labor and employment law firm committed to providing exceptional legal representation and client service. Founded in 2004 by Bruce Luchansky, the firm offers a wide range of legal services to businesses and individuals, focusing on workplace issues, employment disputes, and compliance. Luchansky Law is dedicated to upholding the highest standards of diligence, professionalism, and compassion in its practice. Sources eeoc.gov https://www.eeoc.gov/newsroom/removing-gender-ideology-and-restoring-eeocs-role-protecting-women-workplace?utm_source=chatgpt.com https://www.jdsupra.com/legalnews/eeoc-acting-chair-issues-statement-on-8534448/
New DOL Rule: What Employers Need to Know About Worker Classification Under the FLSA
The U.S. Department of Labor (“DOL”) recently published its final rule (89 FR 1638) addressing how to determine whether a worker is classified as an employee or an independent contractor under the Fair Labor Standards Act (“FLSA”). This rule has significant implications for employers, as it refines the criteria used to evaluate worker classifications and underscores the importance of compliance. The original rule, published during the prior administration, focused on two core factors: the degree of control over the work and the worker’s opportunity for profit or loss. It aimed to simplify the classification process but was criticized for potentially making it easier to classify workers as independent contractors. The new rule departs from that approach by reinstating a broader “totality of the circumstances” analysis, incorporating six factors to assess economic dependence. This approach provides a more comprehensive framework, emphasizing the full scope of the working relationship rather than prioritizing a few key factors. Resource: U.S. Department of Labor – Final Rule on Independent Contractor Classification Key Aspects of the Rule The DOL’s final rule emphasizes a “totality of the circumstances” approach, with the ultimate question being whether a worker is economically dependent on the employer or is in business for themselves. While the rule retains the “economic reality” test, it outlines six core factors that employers must evaluate: Opportunity for profit or loss depending on managerial skill Investment by the worker and the employer Degree of permanence of the work relationship Nature and degree of control exercised by the employer Extent to which the work is an integral part of the employer’s business Skill and initiative required for the work No single factor is determinative; rather, they are weighed collectively to assess whether the worker operates as an independent contractor or is economically dependent on the employer and thus classified as an employee. Implications for Employers 1. Increased Scrutiny Employers should expect increased scrutiny of worker classifications under the revised framework. Misclassifying workers can lead to significant legal and financial consequences, including liability for back wages, overtime pay, and penalties. With the DOL’s heightened focus on enforcement, businesses should carefully evaluate their existing classifications. 2. Review of Contractor Agreements Businesses that rely on independent contractors should review their agreements and operational practices to ensure they align with the new rule’s criteria. Factors such as the contractor’s investment in tools or equipment, the permanence of the working relationship, and the level of control over work hours and tasks should be documented and defensible. 3. Operational Adjustments Employers may need to adjust operational practices to reflect the independent status of contractors. For example, allowing greater autonomy in how and when work is performed or reevaluating the permanence of relationships with contractors could help demonstrate compliance with the rule. 4. Proactive Compliance Measures To mitigate risks, employers should conduct internal audits of worker classifications and consult legal counsel to ensure adherence to the updated standards. Employee misclassification lawsuits are costly and time-consuming, making proactive compliance a wise investment. Conclusion The DOL’s final rule underscores the need for employers to exercise diligence when classifying workers. By thoroughly understanding and applying the “economic reality” test, businesses can reduce the risk of misclassification and its associated penalties. Employers should stay informed of any future developments in this area, as worker classification continues to be a priority for federal and state labor agencies. For more information on how the DOL’s rule may affect your business, or to conduct a worker classification audit, contact the experienced attorneys at Luchansky Law. About Luchansky Law Luchansky Law is a premier labor and employment law firm committed to providing exceptional legal representation and client service. Founded in 2004 by Bruce Luchansky, the firm offers a wide range of legal services to businesses and individuals, focusing on workplace issues, employment disputes, and compliance. Luchansky Law is dedicated to upholding the highest standards of diligence, professionalism, and compassion in its practice. Please call (410) 522-1020, email us at info@luchanskylaw.com, or stop by our office at 606 Bosley Avenue, Suite 3B, Towson, Maryland, 21204. Resources U.S. Department of Labor – Final Rule on Independent Contractor Classification Fair Labor Standards Act (FLSA) Overview DOL Compliance Assistance Toolkit Worker Classification Under the FLSA Fact Sheet
Understanding the Intersection of FMLA and State Paid Family Leave Programs
LThe Family and Medical Leave Act (FMLA) of 1993 grants eligible employees up to 12 weeks of unpaid, job-protected leave annually for specific family and medical reasons. While FMLA leave is typically unpaid, employees may choose—or employers may require—the substitution of accrued paid leave to cover this period. This means that an employee’s accrued paid leave, such as vacation or sick leave, can run concurrently with FMLA leave, providing income during what would otherwise be an unpaid absence. In recent years, several states have implemented their own Paid Family and Medical Leave (PFML) programs, offering paid leave benefits to employees for qualifying family and medical reasons. These state programs are designed to complement federal provisions, providing wage replacement during leave periods. States like Maryland, California, New York, and Washington have enacted PFML laws, each with unique provisions regarding eligibility, duration, and funding. Do FMLA Substitution Rules Apply to State or Local Paid Family Leave Programs? A key question for employers and employees alike is whether FMLA regulations on the substitution of paid leave apply when employees take leave under state or local paid family leave programs. The answer lies in understanding the distinct nature of these benefits: FMLA Substitution of Paid Leave:Under FMLA, “substitution” refers to the practice of using accrued employer-provided paid leave (like vacation or sick leave) concurrently with FMLA leave. Importantly, FMLA’s substitution provisions apply to accrued paid leave provided by the employer, not to benefits from external sources like state PFML programs. State PFML Programs:State PFML benefits are typically funded through state-administered insurance programs, financed by payroll taxes paid by employees, employers, or both. These benefits are not considered accrued paid leave under an employer’s policies but are instead state-provided wage replacements. As such, FMLA substitution provisions do not apply to these benefits. Practical Implications for Employers and Employees When an employee takes leave that qualifies under both FMLA and a state PFML program, the two types of leave generally run concurrently. During this period, the employee receives wage replacement through the state program while being protected under FMLA’s job security provisions. Employers cannot require employees to substitute accrued paid leave for the period covered by state PFML benefits, as these are separate entitlements. However, employers and employees may agree to allow accrued paid leave to supplement state PFML benefits—such as where state benefits provide partial wage replacement—to achieve full salary coverage during the leave period. Key Takeaways FMLA substitution provisions apply only to employer-provided accrued paid leave, not to state PFML benefits. Employers and employees should familiarize themselves with the specific provisions of their state PFML program and its interaction with FMLA. Clear communication of leave policies and updates is critical to ensuring compliance and informed decision-making. For More Resources on FMLA and PFML Luchansky Law has previously explored topics related to FMLA and Maryland’s Family and Medical Leave Insurance (FAMLI) program. For additional insights, please see: Maryland is Preparing to Implement the Family and Medical Leave Insurance (FAMLI) Program—Are You Prepared?This post details Maryland’s FAMLI program, which offers paid family leave benefits, and its implications for employers. Employers Can Challenge FMLA Certifications Without Obtaining Additional Medical OpinionsThis post discusses the rights of employers to challenge FMLA medical certifications and the regulatory framework for doing so. Stay informed about federal and state developments at employmentattorneymd.com to navigate the complexities of FMLA and PFML compliance while supporting employees during critical life events. Sign up for more content from Luchansky Law here. About Luchansky Law Luchansky Law is a premier labor and employment law firm committed to providing exceptional legal representation and client service. Founded in 2004 by Bruce Luchansky, the firm offers a wide range of legal services to businesses and individuals, focusing on workplace issues, employment disputes, and compliance. Luchansky Law is dedicated to upholding the highest standards of diligence, professionalism, and compassion in its practice. Please call (410) 522-1020, email us at info@luchanskylaw.com, or stop by our office at 606 Bosley Avenue, Suite 3B, Towson, Maryland, 21204.
Nationwide Injunction Halts Corporate Transparency Act Enforcement
The injunction comes in response to legal challenges raised by business groups, which argued that the CTA’s requirements posed undue burdens on small businesses. While this ruling provides temporary relief, it is important to note that it is a preliminary measure and subject to change as the case proceeds.
Major Shift: DOL’s FLSA Salary Threshold Rule Vacated
Earlier this year, the U.S. Department of Labor (DOL) issued a final rule under the Fair Labor Standards Act (FLSA) that significantly increased the salary thresholds for exempt employees. This change, which aimed to extend overtime eligibility to an estimated 4 million workers, was expected to reshape workforce classifications nationwide. However, a recent court decision has vacated the rule, effective November 15, 2024, leaving employers with questions about compliance and next steps. A Closer Look at the FLSA Final Rule The DOL’s final rule increased the annual salary thresholds as follows: Standard Salary Level: From $684 per week ($35,568 annually) to $1,059 per week ($55,068 annually). Highly Compensated Employees (HCE): From $107,432 to $143,988 annually. These adjustments marked one of the most significant updates to the FLSA overtime regulations in years. The changes aimed to address wage growth and provide millions of employees with overtime protections under federal law. The Court’s Decision: What Happened? On November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated the Department of Labor’s (DOL) final rule that increased the salary thresholds for exempt employees under the Fair Labor Standards Act (FLSA). The court determined that the DOL exceeded its statutory authority by placing undue emphasis on salary levels rather than job duties when defining exemptions for executive, administrative, and professional employees. This ruling effectively nullifies the planned salary thresholds of $684 per week for exempt employees and $107,432 for HCEs and maintains the previous standards. This decision has disrupted compliance plans for many businesses that had already implemented salary adjustments or reclassified employees in anticipation of the rule’s enforcement. Implications for Employers The vacatur creates several challenges for employers, including: Reevaluation of Employee Classifications: Businesses may need to reassess exempt vs. non-exempt classifications to align with the prior salary thresholds. Payroll Adjustments: Employers who raised salaries to meet the now-vacated thresholds must decide whether to maintain the increases or revert to previous levels. Communication with Affected Employees: Clear and transparent communication is essential to address potential employee concerns arising from reclassification or payroll adjustments. Compliance Risks: Employers should ensure their practices align with the court’s decision to avoid exposure to wage and hour claims. What’s Next? While the court’s decision halts the implementation of this specific rule, employers should remain vigilant. Regulatory developments in wage and hour law are likely to continue, and the DOL may pursue alternative strategies to achieve its policy goals. Key Takeaways from the Ruling Review and update employee classifications and pay structures to ensure compliance with current salary thresholds. Monitor developments from the DOL and federal courts that may signal further changes to the FLSA. Seek legal guidance to address compliance challenges and mitigate risks. We will closely monitor developments regarding this rule, as the DOL may choose to appeal the court’s decision. In the meantime, we recommend reviewing employee classifications and thoughtfully evaluating any potential adjustments to compensation plans or exemption statuses. About Luchansky Law At Luchansky Law, we understand the complexities of wage and hour compliance in a rapidly evolving regulatory environment. For assistance with navigating these changes or addressing specific concerns, please contact us today. Please call (410) 522-1020, or email us at info@luchanskylaw.com, or stop by our office at 606 Bosley Avenue, Suite 3B, Towson, Maryland, 21204. Resources https://www.reuters.com/world/us/us-judge-strikes-down-biden-overtime-pay-rule-2024-11-15/ https://www.dol.gov/newsroom https://www.federalregister.gov/
LUCHANSKY LAW ENFORCEMENT ALERT: Maryland Trucking Company Ordered to Pay $46K in Back Wages and Damages; Driver Reinstated After Whistleblower Investigation
TrueStart Transport LLC, a Maugansville-based freight and heavy-haul trucking provider, has been ordered by the U.S. Department of Labor to pay $46,094 in back wages and damages to an employee wrongfully terminated for refusing to drive an oversized load without the required safety precautions. This decision follows an investigation by the Occupational Safety and Health Administration (OSHA), which found that TrueStart Transport violated the whistleblower protections under the Surface Transportation Assistance Act (STAA). Key Findings: The employee raised safety concerns after being directed to transport an oversized load without the legally required escort vehicle. After refusing to drive the load under unsafe conditions, the company terminated the employee and left them stranded at a Tennessee truck stop, forcing them to pay for their return home to Texas. OSHA determined the company’s actions were retaliatory, violating the employee’s federally protected right to refuse unsafe work. Penalties Imposed: $9,698 in back wages and interest. $10,000 in punitive damages. $26,396 in compensatory damages for the wrongful termination and financial losses incurred. Additionally, OSHA ordered TrueStart Transport to reinstate the driver to their previous position, emphasizing that an employee’s right to raise safety concerns is protected under federal law. Employer Takeaways: Employers must understand the critical importance of complying with federal whistleblower protection laws. Firing or retaliating against employees who raise safety concerns is not only illegal but can result in significant financial penalties and reputational damage. Employers should ensure they have proper procedures in place to handle employee safety complaints and avoid similar costly outcomes. See the DOL Press Release here. For more information on whistleblower protections under federal law, visit OSHA’s Whistleblower Protection Programs. About Luchansky Law Luchansky Law is a premier labor and employment law firm committed to providing exceptional legal representation and client service. Founded in 2004 by Bruce Luchansky, the firm offers a wide range of legal services to businesses and individuals, focusing on workplace issues, employment disputes, and compliance. Luchansky Law is dedicated to upholding the highest standards of diligence, professionalism, and compassion in its practice. Please call (410) 522-1020, email us at info@luchanskylaw.com, or stop by our office at 606 Bosley Avenue, Suite 3B, Towson, Maryland, 21204.
Maryland’s Family and Medical Leave Insurance (FAMLI) Program: Key Details and Implications for Employers
Maryland is preparing to implement the Family and Medical Leave Insurance (FAMLI) Program: Are you Prepared? Maryland is on track to implement the Family and Medical Leave Insurance (FAMLI) Program, which will enable eligible employees to take paid time off for a range of personal and family health reasons beginning July 1, 2026. This initiative, administered by the Maryland Department of Labor, is designed to support employees’ ability to maintain workforce participation while managing significant life events, such as serious health conditions or family caregiving responsibilities. What the Program Offers The FAMLI Program provides employees with a wage replacement benefit of up to $1,000 per week during qualified leave periods, covering up to 12 weeks in a 12-month period. Employees facing multiple qualifying events may be eligible for an additional 12 weeks, allowing up to 24 weeks in total if necessary. Key Elements of the Program Eligibility Requirements: To be eligible, employees must have worked at least 680 hours within the 12 months preceding their requested leave. This threshold ensures that workers have an established connection to the workforce, enabling them to take advantage of the benefits after meeting this baseline requirement. Funding and Contributions: Contributions to the FAMLI fund will commence on July 1, 2025, funded by payroll contributions from both employers and employees. Employers with 15 or more employees will share this responsibility, each contributing 0.45% of wages. Smaller employers (fewer than 15 employees) are exempt from contributing, but their employees will still contribute their portion. This funding structure ensures a balanced approach, minimizing the financial impact on smaller businesses while enabling widespread access to paid leave for Maryland workers. Qualifying Events for Leave: Employees may use FAMLI benefits for various situations, including: Family Care: Caring for a newborn or recently adopted child. Serious Health Condition: Addressing a personal or family member’s significant medical issues. Military Situations: Managing issues related to the deployment or service of a family member in the military. These qualifying events are aligned with the challenges many employees face, particularly in supporting immediate family members or addressing their own health needs. Employer Compliance and Administration: The Maryland Department of Labor is responsible for overseeing the program’s implementation and compliance. Employers will need to understand their responsibilities in processing contributions, notifying employees of their rights, and ensuring that workplace policies reflect the new paid leave options. Employers may find that facilitating this leave enhances employee satisfaction and retention, as workers will have the support needed to balance personal responsibilities with their professional roles. Benefits for Employers and Employees The FAMLI Program is expected to positively impact workforce stability by reducing employee turnover and promoting a healthy work-life balance. Research shows that access to paid leave can lead to improved employee morale, higher retention rates, and increased productivity. For employees, FAMLI offers the financial stability to take necessary leave without jeopardizing their income or employment. Preparing for FAMLI Implementation Employers should start preparing for FAMLI by: Reviewing Payroll Processes: Ensure payroll systems can manage the collection and remittance of contributions starting in 2025. Updating Employee Policies: Integrate FAMLI information into employee handbooks and leave policies. Educating Staff: Inform employees about their eligibility and benefits, emphasizing how the program can support them through various life events. As Maryland moves closer to full FAMLI implementation, employers and employees alike should familiarize themselves with the program details. This proactive approach will help ensure that workplaces across Maryland are ready to support their staff’s needs while meeting regulatory requirements. For the latest updates, employers and employees can visit Maryland Department of Labor’s FAMLI. About Luchansky Law Luchansky Law is a premier labor and employment law firm committed to providing exceptional legal representation and client service. Founded in 2004 by Bruce Luchansky, the firm offers a wide range of legal services to businesses and individuals, focusing on workplace issues, employment disputes, and compliance. Luchansky Law is dedicated to upholding the highest standards of diligence, professionalism, and compassion in its practice. Please call (410) 522-1020, email us at info@luchanskylaw.com, or stop by our office at 606 Bosley Avenue, Suite 3B, Towson, Maryland, 21204. References: MD Department of Labor Maryland Paid Leave
AI in Hiring: Key Lessons from the Workday Bias Suit for Employers
As artificial intelligence (AI) continues to reshape hiring practices, employers are increasingly facing legal challenges related to potential discrimination. The recent Workday AI Bias Lawsuit serves as a significant reminder of the risks associated with automated decision tools (ADTs). In this case, Workday was accused of using an AI system that allegedly discriminated against minority job applicants, raising questions about the fairness and transparency of AI tools in recruitment. AI Discrimination and Regulatory Landscape The Workday lawsuit is part of a growing body of legal cases addressing the role of AI in hiring decisions. While AI offers efficiency and speed, it can also perpetuate or amplify biases if not properly monitored. This has caught the attention of lawmakers and regulators, leading to stricter guidelines around AI use in employment. States like New York and New Jersey have already introduced legislation requiring employers to conduct annual bias audits on their AI tools to prevent algorithmic discrimination. These laws mandate that AI tools must undergo independent reviews, and employers are required to notify candidates if AI is used in the hiring process. Best Practices for Employers Using AI in Hiring In light of the Workday lawsuit and the evolving regulatory environment, there are several key steps employers should take to minimize the risk of discrimination claims: Conduct Bias AuditsEmployers must ensure that their AI systems undergo regular bias audits to identify any potential discriminatory outcomes. These audits help safeguard against violations of federal and state anti-discrimination laws, including Title VII of the Civil Rights Act and the Americans with Disabilities Act (ADA). Ensure Human OversightAI tools should not be the sole decision-maker in hiring processes. Employers need to maintain human oversight to review decisions made by AI and ensure fairness, especially in cases where candidates from protected classes might be affected. Transparency and Employee NotificationEmployers should be transparent with applicants and employees about the use of AI in hiring. This includes notifying candidates when AI tools are used and providing them with the opportunity to request a review or challenge the decision. Comply with Federal and State GuidelinesEmployers should stay informed about both state-specific and federal guidelines on the use of AI in hiring. For example, the Department of Labor (DOL) recommends that employers using AI tools regularly test these systems to ensure they do not violate laws related to wage calculations or disability accommodations. Looking Ahead As AI tools become more common in hiring, employers must be proactive in addressing the risks of algorithmic bias. The lessons from the Workday case, along with new state and federal regulations, underscore the need for transparency, regular auditing, and human oversight. By taking these steps, employers can leverage the benefits of AI while minimizing the risk of discrimination claims. About Luchansky Law Luchansky Law is a premier labor and employment law firm committed to providing exceptional legal representation and client service. Founded in 2004 by Bruce Luchansky, the firm offers a wide range of legal services to businesses and individuals, focusing on workplace issues, employment disputes, and compliance. Luchansky Law is dedicated to upholding the highest standards of diligence, professionalism, and compassion in its practice. Please call (410) 522-1020, email us at info@luchanskylaw.com, or stop by our office at 606 Bosley Avenue, Suite 3B, Towson, Maryland, 21204. References Bias Audits and Federal Anti-Discrimination Laws: https://www.eeoc.gov/laws/guidance/americans-disabilities-act-and-use-software-algorithms-and-artificial-intelligence Human Oversight Recommendations: https://www.ftc.gov/business-guidance/blog/2021/04/aiming-truth-fairness-equity-your-companys-use-ai Transparency and Employee Notification: https://nvlpubs.nist.gov/nistpubs/ai/NIST.AI.100-1.pdf State and Federal Compliance: https://www.dol.gov/newsroom/releases/osec/osec20241016 Future Considerations on Algorithmic Bias: https://www.brookings.edu/articles/the-eeoc-wants-to-make-ai-hiring-fairer-for-people-with-disabilities/
