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/