AI in the Workplace: A Tool, Not a Substitute for Judgment

Artificial intelligence is increasingly integrated into the workplace. Employers are using AI to improve productivity, reduce administrative burdens, support higher-value work, and, and more.

However, AI also presents risks, particularly when it influences decisions affecting employees or job applicants.

AI Use and Legal Compliance

The absence of an AI-specific law in a particular jurisdiction does not mean AI use is free from legal compliance considerations.

Existing laws governing discrimination, privacy, confidentiality, trade secrets, intellectual property, and employment practices may apply to workplace uses of AI.

At the same time, state and local governments are increasingly adopting laws that specifically address AI in the workplace. California, Illinois, Colorado, Texas, New York City, and other jurisdictions have adopted or considered requirements addressing issues such as automated employment decisions, discrimination, bias testing, notice, transparency, and recordkeeping.

For employers, the key considerations are where AI is being used and what role it plays in employment decisions.

Know What AI Your Employees Are Using With Your Data

AI may already be incorporated into your recruiting platforms, productivity software, HR systems, meeting applications, and other workplace technology. Employees may also independently use publicly available AI tools.

Consider creating a multi-disciplinary AI governance team within your organization, led by members of HR, Legal, IT, Operations, Finance, and other relevant business leadership teams. Together, these teams should understand the following:

• Which AI tools are being used

• What these tools are being used for

• Types of information being entered into the AI tools

• What outputs they produce, and whether these outputs impact employees or applicants

• The level of human oversight

• Records being created and how they are retained

The Closer AI Gets to a Decision, the Greater the Risk

When analyzing AI use within your organization, there is an important distinction between using AI to assist employees in performing their work and using AI to make decisions about employees or applicants.

AI may be useful for:

• Organizing information

• Drafting outlines or communications

• Analyzing data

• Creating interview questions

• Handling repetitive tasks

However, risks increase when AI is used to determine who is hired, retained, promoted, disciplined, accommodated, or terminated. In these circumstances, a human should remain responsible for the outcome and exercise independent judgment over the AI's output.

Let's dig deeper into a few of these examples:

1. Recruiting: Organize, Don't Automatically Decide

AI can help organize applications, identify job-related qualifications, structure interviews, and summarize information. Employers should exercise greater caution when AI moves from organizing information to determining which candidates are excluded from consideration.

Recent litigation illustrates some of the concerns that can be raised when an AI tool is used to screen job applicants. There is a pending class action lawsuit that involves allegations that AI-powered employment screening tools discriminated against applicants and excluded them from consideration based on protected characteristics including age, race, and disability.

The litigation underscores the importance of understanding how hiring technology operates and not assuming that an automated recommendation is neutral simply because it is generated by a computer. Blaming the AI tool for the decision is not a defense in litigation. Employers must understand that they will be held accountable for relying upon or adopting any decisions made by an AI tool. 

2. Performance Management: AI Can Help Prepare, but Managers Own the Decision

AI can assist with organizing facts, outlining discussion points, and improving the clarity of written communications. Performance management, however, requires context, empathy, and direct communication.

Managers remain responsible for performance discussions and the resulting employment decisions. While many managers tend to shy away from handling these tough conversations with employees, AI can help them prepare and ensure they are conducted in a professional manner and documented appropriately. 

However, an AI tool is only as effective as the human managing and prompting it. Managers must have enough experience to identify the information relevant to a particular situation and provide the necessary context for the AI tool's analysis. For example, an AI tool will not know that an underperforming employee has limitations related to a known disability unless that information is provided. Without that context, the AI tool may overlook potential protections under the Americans with Disabilities Act.

3. Note Taking: Consider Privacy and Confidentiality

Transcription and summary tools can be useful, but workplace meetings may involve highly sensitive information, including workplace investigations, protected medical or accommodation matters, discipline, privileged legal advice, compensation, or confidential business information.

Before using an AI meeting tool, employers should consider what information will be captured, who can access it, where it will be stored, and how long it will be retained. Depending on the circumstances, recording or transcription may also raise privacy or consent considerations. For example, Illinois requires all parties to a conversation to consent before recording starts.

Keep Humans Accountable

Responsible AI use does not necessarily require eliminating AI from the workplace. It requires maintaining appropriate human accountability.

When AI is involved in an important employment decision, a person should:

Review the output.
Understand what the AI produced and have authority to disagree with it.

Apply judgment.
Consider accuracy, context, potential bias, and the circumstances of the employee or applicant.

Own the decision.
Be able to explain the basis for the final decision and the role AI played in reaching it.

If an AI-assisted decision is later challenged, employers should be able to demonstrate that a person, not simply an automated system, was responsible for the outcome.

The Bottom Line

AI can provide significant benefits in the workplace, including increased efficiency, reduced administrative burdens, and support for higher-value work.

Those benefits, however, should not come at the expense of human judgment and accountability.

The relevant question for employers is not simply "Can AI do this?"

It is:

"What role should AI play, and where should human responsibility remain?"

As AI becomes more integrated into the workplace, employers should focus not only on what the technology can do, but also on ensuring that important employment decisions remain grounded in human judgment, accountability, and appropriate oversight.