By Bradley Hunt, Attorney at Law
Artificial intelligence has quickly become part of the modern workplace. Employers are using AI powered tools to screen resumes, evaluate job applicants, monitor employee performance, draft job descriptions, and automate administrative tasks. While these technologies can improve efficiency, they also present significant legal considerations.
For employers in North Carolina, the use of artificial intelligence does not create a separate set of employment laws. Instead, existing federal employment laws continue to apply regardless of whether employment decisions are made by a person or with the assistance of technology.
AI Does Not Eliminate Employer Responsibility
Many employers rely on third party software vendors to provide hiring and workforce management tools. However, using an AI platform does not shift legal responsibility away from the employer.
If an automated system makes employment decisions that result in unlawful discrimination, the employer may still be held liable under federal employment laws. Employers are responsible for ensuring that the technology they use complies with applicable legal requirements.
Hiring and Recruitment
AI is increasingly used during the hiring process to identify qualified candidates, rank resumes, evaluate recorded interviews, and communicate with applicants.
While these tools can streamline recruitment, they also have the potential to unintentionally disadvantage certain applicants. If an AI system disproportionately excludes individuals based on a protected characteristic such as race, sex, age, disability, or national origin, the employer could face claims under federal anti discrimination laws.
Employers should periodically evaluate whether automated hiring tools are producing fair and consistent results and should avoid relying exclusively on AI when making employment decisions.
Disability Accommodations
The Equal Employment Opportunity Commission has issued guidance explaining that employers must continue to comply with the Americans with Disabilities Act when using artificial intelligence.
For example, an applicant with a disability may require a reasonable accommodation if an AI based assessment or screening tool creates barriers to equal participation in the hiring process. Likewise, employee monitoring systems should not penalize workers whose disabilities affect how they perform certain tasks if reasonable accommodations are required.
Employers should ensure that AI assisted employment practices include procedures for requesting and evaluating accommodations.
Performance Management and Workplace Monitoring
Artificial intelligence is also being used to monitor productivity, evaluate employee performance, and identify workplace trends.
Although these tools can provide valuable information, employment decisions should not rely solely on automated data. Human oversight remains essential, particularly when disciplinary action, promotion decisions, or termination may result.
Employers should understand how automated systems generate recommendations and should verify that decisions are supported by accurate and objective information.
Data Privacy and Confidential Information
Many AI platforms require users to upload documents or other information to generate responses or perform analyses. Employers should exercise caution before entering confidential business information, employee records, medical information, or proprietary data into publicly available AI systems.
Establishing clear internal policies governing the appropriate use of AI can help reduce legal and cybersecurity risks while protecting sensitive information.
The Current Legal Landscape in North Carolina
At this time, North Carolina has not enacted a comprehensive law regulating the use of artificial intelligence in private employment decisions. However, employers remain subject to federal laws enforced by the Equal Employment Opportunity Commission, including Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and other anti discrimination statutes.
As artificial intelligence continues to evolve, employers should expect increased regulatory attention and additional guidance from federal agencies. Businesses that adopt AI responsibly and maintain meaningful human oversight will be better positioned to reduce legal risk while benefiting from emerging technologies.
Best Practices for Employers
North Carolina employers considering the use of AI in employment decisions should consider several practical steps.
- Develop written policies governing the use of artificial intelligence in the workplace.
- Review AI tools before implementing them to understand how employment decisions are generated.
- Maintain meaningful human involvement in hiring, promotion, discipline, and termination decisions.
- Train managers and human resources professionals on the legal risks associated with automated decision making.
- Regularly evaluate AI systems for potential bias and document efforts to ensure compliance with employment laws.
Artificial intelligence is changing the way businesses recruit, manage, and retain employees. While these technologies offer valuable opportunities to improve efficiency, they do not replace an employer’s legal obligations.
North Carolina employers should view AI as a tool to support decision making rather than replace it. By combining technological innovation with careful human oversight and compliance with existing employment laws, businesses can reduce legal risk while building fair and effective workplace practices. Questions about your specific situation? Speak to one of our business law attorneys.
As always, the materials and documentation contained on this site are provided for informational purposes only and should not be construed as legal advice.