Okay, another non-wage and hour post, but how could I not! This AI stuff is everywhere and now the Equal Employment Opportunity Commission (EEOC) is chiming in. On May 18, 2023, the EEOC released a technical assistance document outlining considerations for employers using software, algorithms, and artificial intelligence for employment selection procedures such as hiring, performance monitoring, promotion decisions. Examples of such tools include resume scanners, virtual chatbots that interact with candidates, video interviewing software, and employee monitoring software.

Not surprisingly, employers are prohibited from using selection procedures that disproportionately exclude individuals based on race, color, sex, religion, or national origin under Title VII, unless the procedures are job related and consistent with business necessity. Thus, if an AI-driven method leads to a substantially lower selection rate (4/5ths rule) for members of a particular group, the AI feature may violate Title VII, unless the employer can demonstrate that the feature is “job related and consistent with business necessity.”

To determine what constitutes a “substantially” lower rate, the EEOC uses the four-fifths rule which provides that if the selection rate for a specific group is less than 80%, or four-fifths, of the selection rate for the most favored group, it may evidence discrimination. However, relying solely on the four-fifths rule does not guarantee compliance with Title VII (I know, no win).

Even more, employers may be held responsible for Title VII violations even when using a tool developed or administered by a third party. Per the EEOC, relying on assurances from vendors will not absolve employers of liability in this regard. So, if you are one of the tech savvy employer and starting to use AI in your employee selections, be sure the AI tools do not adversely impact one group over another.