Artificial intelligence is no longer a future-facing concept in human resources. It is already embedded in how companies post jobs, screen candidates, monitor performance, and make termination decisions. For HR professionals and employers, the challenge is no longer whether to engage with AI tools but how to do so without creating legal exposure that outweighs the operational benefits.
At a Society for Human Resource Management seminar, Mandelbaum Barrett PC attorney Brent Pohlman delivered a presentation on the growing role of AI in the workplace, equipping HR professionals and business leaders with the legal framework they need to move forward responsibly. The firm’s Labor and Employment Law practice advises employers across New Jersey on proactive strategies for building compliant, effective workplaces.
Why AI in HR Creates New Legal Exposure
AI-powered HR tools promise efficiency and consistency, but they also carry risks that are not always obvious at the point of adoption. When an algorithm makes or influences a hiring, promotion, or termination decision, the employer remains legally responsible for the outcome. Saying “the software did it” has not been accepted as a defense in employment discrimination claims.
The Equal Employment Opportunity Commission has made clear that AI tools can create disparate impact liability even without discriminatory intent. If an algorithm screens out candidates from a protected class at a statistically higher rate, that can give rise to a discrimination claim regardless of whether the employer designed the tool or simply purchased it. Knowing where those risks lie is essential before making any significant investment in AI-powered HR technology.
Key Legal Considerations for AI Adoption in the Workplace
Attorney Pohlman’s presentation at the SHRM seminar covered the practical issues HR professionals are most likely to encounter. Addressing these areas before implementing AI tools is far more effective than responding to a complaint after the fact.
- Bias auditing: Vendors selling AI hiring tools should be asked for audit results showing disparate impact testing. Employers who cannot document this review face greater liability if the tool is later challenged.
- Disclosure requirements: New York City, Illinois, and other jurisdictions now require employers to notify candidates when AI tools are used in the hiring process. Other states are developing similar legislation.
- Data privacy obligations: AI tools that analyze employee communications, biometrics, or browsing behavior trigger state privacy laws in New Jersey and elsewhere. Employees may have rights to access and delete that data.
- Union and collective bargaining issues: For employers with unionized workforces, introducing AI tools that affect job duties or working conditions may require bargaining before deployment.
Each of these areas carries its own compliance requirements, and the intersection of federal guidance, state law, and local ordinance makes this one of the most complex compliance environments in employment law today. The EEOC’s guidance on employment discrimination provides a foundational reference point for employers building AI policies.
Building a Policy Before the Problem Arrives
Organizations that wait for a legal challenge to audit their AI practices will find the process far more disruptive and expensive than those that build policies during implementation. Attorney Pohlman’s guidance focused on practical steps employers can take now, regardless of where they are in the AI adoption process.
That includes reviewing vendor contracts to ensure indemnification provisions address AI-related claims, developing internal policies governing how AI outputs are used in employment decisions, training managers on the limitations of AI recommendations, and establishing a review process for employees who believe an automated decision was made in error. Employers who get ahead of these issues now are far better positioned than those who wait for enforcement or litigation to prompt a review.
Contact Mandelbaum Barrett PC
Employers navigating the legal implications of AI in the workplace need counsel who understands both the technology and the employment law landscape. Mandelbaum Barrett PC’s labor and employment attorneys work with organizations across New Jersey and beyond to build proactive compliance strategies and workplace policies that hold up under scrutiny.
To discuss how AI adoption may affect your workforce policies, reach out through the firm’s contact page.