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Employers Prepare: AI Federal Regulations Coming Soon

Hold onto your seats, employers, as we dive into President Biden’s groundbreaking executive order entitled “Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” (“Order.”) Beyond its focus on cybersecurity and public benefits, this executive order raises the stakes for employers engaged in workplace surveillance.


Implications for Employers:

In the Executive Order, the Secretary of Labor emerges as a key player. The Secretary is tasked with formulating and disseminating pivotal principles and best practices for employers on a comprehensive range of AI concerns, including labor standards, job quality, and AI’s impact on equity, protected activities, compensation, and workplace well-being. The Order scrutinizes the collection and use of employee data by AI, emphasizing the imperatives of transparency, engagement, and adherence to worker protection laws.

Of particular significance, the Order mandates employers using AI to monitor or enhance employees’ work to comply with all employment related regulations, especially those ensuring fair compensation. This Order endows the Department of Labor with expansive authority to regulate AI in monitoring employee activities, potentially exposing both unionized and union-free employers to increased liability.


The NLRB is Already Aligned with the Order:

The Order’s broad language, specifically referencing “activity protected under worker-protection laws,” supports heightened regulation by the National Labor Relations Act (NLRA). The General Counsel of the National Labor Relations Board (NLRB), Jennifer Abruzzo, already warned of heightened scrutiny for employers utilizing AI or algorithm-based software for employee monitoring. A memorandum issued by Abruzzo set forth a framework for regulating algorithm-driven management practices that may impede employees’ protected activities under the NLRA. The EEOC has issued similar warning about using AI in the recruiting process. The Order is one more indication that the Biden Administration wants to heighten scrutiny of employers using AI in the workplace.


Anticipated Regulatory Landscape:

The Order is poised to usher in an era of increased AI-related regulations by federal agencies. In navigating this evolving legal landscape, employers are advised to seek guidance from their labor counsel whenever utilizing AI related processes. As complexities grow, strategic consultation becomes paramount for businesses bracing themselves for the reality of AI-related scrutiny.


Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560