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The AI Regulatory Wave: A Growing Challenge for Businesses

A Flood of AI Legislation Sweeps the Nation

Kelly Dobbs Bunting, a partner at Greenberg Traurig LLP, a prominent law and lobbying firm, invoked the unsettling finale of Westworld, quipping, “The robots win. We all die.”

Bunting used the dystopian TV show as a metaphor to underscore the potential pitfalls of integrating artificial intelligence (AI) into workplace operations. Beyond the promise of AI lies a labyrinth of legal quandaries and compliance challenges.

Bunting noted that the wealth of new AI tools are “kind of cool and kind of horrifying” at the Society for Human Resources Management annual conference in Las Vegas. With great opportunities, come great risks, she reminded her audience.

Regulating AI: The Federal and Local Response

The Federal government has been consistently issuing guidelines on AI, focusing on potential discrimination issues, including violations of the Americans with Disabilities Act, among other matters. Additionally, local jurisdictions are legislating on the use of the technology. New York City, for example, recently enacted a law regulating the use of automated employment decision tools by businesses, necessitating a bias audit and mandatory notifications to candidates and employees.

Bunting cautioned, “Everybody’s getting in on this”, and that there “are currently more than 160 bills or regulations related to AI that are pending right now in 34 different state legislatures. There is a huge tsunami coming of state regulation. If you are a multi-state employer, go to God.”

AI in the Courtroom: Legal Challenges on the Rise

Meanwhile, a new trend is surfacing in the litigation sphere, too: lawsuits concerning the use of AI and machine learning in workplaces. A landmark class-action case was filed earlier this year against Workday, alleging that the human capital management company’s software acts as an employment agency with a prejudiced applicant screening algorithm.

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Bunting highlighted this as the first significant class-action lawsuit targeting a vendor. She warns, “This is not going to be the last. This is just the beginning.”

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