EU and US Companies are considering using AI in recruitment and hiring. Artificial Intelligence (AI) is rapidly transforming how companies i...
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| EU and US Companies are considering using AI in recruitment and hiring. |
Both the European Union and the United States are moving to regulate the use of AI in recruitment, each with distinct approaches that organizations must carefully navigate. The EU AI Act, approved in 2024, classifies AI systems used in employment as “high-risk.” This means companies using algorithms to make hiring decisions must ensure:
- Transparency: Applicants must be informed when an AI system is involved.
- Human Oversight: Final hiring decisions must remain under human control.
- Bias Prevention: Systems must be tested to prevent discrimination based on race, gender, or other protected characteristics.
Additionally, AI usage in hiring must align with the General Data Protection Regulation (GDPR), particularly regarding consent, data minimization, and the right to explanation under automated decisions (Article 22). “Employers in the EU must be prepared to audit their AI tools and maintain documentation proving compliance,” says Eva Lindström, an AI compliance officer in Sweden. Unlike the EU, the US lacks a federal AI regulation for hiring. However, state and city laws are quickly filling the gap. For example:
- New York City Local Law 144 requires bias audits for automated employment decision tools (AEDTs) and mandates public reporting of audit results.
- Illinois' AI Video Interview Act requires candidate consent before AI is used to analyze video interviews.
- California and Maryland are considering additional laws on transparency and algorithmic accountability in employment.
Employers must also consider federal anti-discrimination laws enforced by the Equal Employment Opportunity Commission (EEOC), which recently issued guidance warning about algorithmic bias in hiring tools. Companies operating in both the EU and US should adopt a risk-based and transparent approach. Key practices include:
- Conduct independent audits of AI systems.
- Maintain human-in-the-loop for all final decisions.
- Provide clear disclosures to applicants.
- Store and process data in compliance with local laws.
- Train HR teams to understand AI limitations and legal duties.
“If a company is using AI to streamline hiring, they should also be investing in responsible AI governance,” notes Brian Matthews, a partner at a global labor law firm. As AI becomes more embedded in hiring pipelines, both lawmakers and job seekers will expect more accountability and fairness. Organizations that proactively manage risk, embrace transparency, and ensure AI fairness will be best positioned to attract top talent—and stay on the right side of the law.
For further reading, check the EU Commission Press Release on the AI Act or the White House Blueprint for an AI Bill of Rights.
