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As part of Loeb's AI Summit in New York City on February 11, 2026, attorneys at Loeb spoke with employers working to balance the desire to take advantage of new technology against the risk of legal challenges. As a growing number of companies incorporate artificial intelligence (AI) at each stage of the employment life cycle—recruitment, hiring, performance management and termination—there are many legal considerations to keep in mind.
Here are some key takeaways in the employment space:
- Prepare for more laws requiring disclosure of use to applicants and employees. One of the most common uses of AI in employment is at the hiring stage, but hiring discrimination cases are inherently difficult because the applicant is usually operating with a significant lack of information. As a result, many of the current laws around AI in employment tackle this information gap by requiring disclosure of use, as well as data retention and disclosure.
- Bias audits are key, but daunting. AI tools should be subject to a bias audit, especially if they are replacing human decision-making. But who conducts that audit, what data is used and how to interpret and respond to the results are complicated questions for employers to evaluate.
- There is a human factor at issue that should not be overlooked. Using AI to monitor and evaluate employees will have an impact on employee morale. And while maintaining a positive workplace culture is not a legal requirement, there is often a correlation between employee morale and the likelihood that an employee will bring a claim. Transparency and honesty about the use of AI, as well as careful considerations regarding which AI tools to use and how, are likely to mitigate risk.
Thus, developing an internal process for evaluating and approving the use of AI in employment decisions is key. Employers must assess the patchwork of laws across the country to ensure compliance and be particularly mindful of disclosure and bias audit requirements.
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