With emerging federal, state and local laws specifically addressing AI and hiring—and the U.S. Equal Employment Opportunity Commission (EEOC) having settled its first AI hiring discrimination lawsuit last year—workplace experts say that the legal landscape is shifting and HR leaders need to think proactively.
Melanie Ronen, an employment lawyer and partner at Stradley Ronon, advises employers on all aspects of employment law and has handled cases involving gender stereotypes and disability discrimination.
She emphasizes the importance of staying ahead of the curve regarding AI in hiring—and its risk of causing discrimination—regardless of legislation in the organization’s jurisdiction.
Proposed AI and hiring legislation in California
California employers, in particular, need to prepare now for inevitable regulations governing the use of artificial intelligence in hiring. According to a Stradley Ronon brief, two significant efforts in California are in progress to address the use of automated systems in assessing job candidates:
AB 2930 would prohibit employers from using AI tools that result in “algorithmic discrimination,” while California Civil Rights Council (CRC) proposed regulations clarify how existing rules safeguarding against employment discrimination apply to AI. Ronen says HR leaders can stay informed about these developments through the California Legislative Information site and the Civil Rights Council page on the California Civil Rights Department site.
“California law already prohibits employment discrimination,” notes Ronen. She explains that pending legislation highlights the potential for discriminatory effects from the use of AI tools and machine learning. “This is now a significant focus for lawmakers in California and elsewhere,” she adds.
According to Ronen, AI’s role in employment-related decision-making is likely to remain a concern for lawmakers and agencies regardless of whether the California legislation is enacted in its current or modified form.
“HR leaders should proactively establish systems to ensure their AI tools do not unintentionally favor or exclude specific groups, aligning with HR best practices,” says Ronen.
AI and hiring: advice for HR leaders
Ronen says HR leaders will need to ensure third-party vendors and employment agencies comply with relevant AI regulations by maintaining strategic oversight and proactive communication.
“Employers should regularly review and update contracts with their vendors and agencies to ensure they are up to date with the latest AI-related regulatory requirements,” says Ronen. Regular check-ins and compliance audits can also help ensure all parties adhere to current standards and best practices.
Ronen advises HR leaders to regularly perform adverse impact assessments to confirm that the use of AI in hiring does not favor or exclude particular groups. “It is important to make this assessment not only when the tool is first implemented, but also continuously throughout the AI tool’s lifecycle to address and mitigate any emerging adverse impacts as the technology evolves,” she adds.
‘Enforcement is the elephant in the room’
Jonathan Kestenbaum, managing director at talent solutions firm AMS, notes a growing prevalence of U.S. state and local laws regulating AI in the hiring process. As more states and jurisdictions implement AI hiring laws, federal legislation is likely to follow.
While this could become a hot topic in the election year, Kestenbaum cautions that federal laws take longer to roll out. “There will be broader legislation,” he says.
Kestenbaum advises talent leaders and tech vendors to expect increased regulation as AI use cases in employment multiply. Additionally, HR leaders need to ensure everyone in their department understands civil rights laws so humans can take responsibility for employment decisions, whether AI was used to help make them or not. “This is ultimately going to be about what’s best for candidates and building efficiencies for the organization,” he says.
Recently, Colorado passed the country’s first comprehensive law on AI use in key decisions, including hiring, which takes effect in 2026. The law requires companies and some government agencies to inform people when an AI system is used and allows individuals to correct data or file complaints if they believe they were treated unfairly.
Kestenbaum highlights the challenge of enforcement, noting that the process in Colorado—like the one in place in New York City—currently relies on candidates filing complaints. Without proper disclosure from employers, candidates may not even be aware that AI was used in the decision-making process. Ensuring compliance will be challenging unless candidates take legal action. “Enforcement is the elephant in the room,” he says.
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