Artificial Intelligence and the Recruitment Process

Artificial Intelligence (AI) is a technological advancement which carries potential to result in revolutionary changes to the way that we work. This has also changed the outlook of many industries globally.

The emergence of AI does, however, also provide challenges including in the human resources sphere. The following provides a brief overview of AI and its potential in the human rights sphere.

What is Artificial intelligence (AI)?

Artificial intelligence (AI) is the ability of machines to perform tasks that are based on human intelligence. These machines can range from learning, comprehending information, solving problems, making decisions, and generating creative content.

Utilizing AI in the Hiring Process

AI tools are marketed to employers to process applications more efficiently and identify top talent in the recruitment process. These tools can range from automated resume screening to complex machine learning systems to identify the best-fit candidate for the employer.

Many Canadian job seekers are also using AI to help them in their job search. This includes tools to help them with resumes, cover letters, and identifying potential job opportunities.

AI and Legal Considerations for Canadian Employers

In March 2024, the Working for Worker Four Act 2024 was given Royal Assent and made several amendments to the Employment Standards Act, 2000 (the “ESA”), including the requirement that employers disclose when AI is being used to screen or select applicants in job postings.

Therefore, Ontario employers will soon be required to disclose their AI usage. These ESA amendments take effect on January 1, 2026.

This measure improves clarity for job applicants, addressing the ethical, legal, and privacy issues of AI in the hiring process. These considerations help job applicants to be aware of the AI tools used in recruitment and selection processes.

However, the details of the disclosure requirements are still unclear as AI in hiring and recruitment refers to a broad range of technologies, from keyword-based filters to complex modules that assess candidates’ suitability. Additionally, it is also unclear which tools will be included under the new ESA amendments.

Employment Legal Regulations and AI

This is why recently published regulations under the ESA define “artificial intelligence” as “a machine-based system that, for explicit or implicit objectives, infers from the input it receives to generate outputs such as predictions, content, recommendations or decisions that can influence physical or virtual environments.” While this is a step to address concerns regarding AI, it does not provide a clear understanding of the systems, tools and programs that provide AI disclosure. The lack of clarity may cause employers to miss important disclosure requirements, overlooking the need for guidance as technology evolves.

In our opinion, the amendment to the ESA likely falls short of effectively tackling bias in hiring and recruitment. For example, simply disclosing the use of AI in the hiring process will likely not address whether bias exists or how it impacts decision-making.

Canada

Parliament is currently working to pass the Artificial Intelligence and Data Act (“AIDA”) as part of Bill C-27. The Bill passed its second reading in the House of Commons in April 2023 and is now under committee review. One of the key points in AIDA is to ensure employers using AI systems also have human oversight of the application. Additionally, if there is a serious error involving AI, they must report it to the system developer and the Data Commissioner. The reported aim is to enhance accountability and safety in the workplace through AI technology.

If AIDA is passed, employers will be expected to focus on high-impact AI and take accountability for businesses, the risks, and the use of AI. It would also require them to implement appropriate safety measures and monitor processes. The goal would be to ensure safety and fairness and prevent discriminatory outcomes using AI. It is uncertain if AIDA will become law, but if it does, this new legislation will almost certainly impact the way AI is created, used, designed and regulated in Canada.

Internationally

As Canada continues to pass laws on AI legislation, the European Union (EU) has taken a significant step by making the Artificial Intelligence Act law in 2024. This new law is expected to be rolled out between 2025 and 2027.

The EU’s main goal with this new AI legislation is to set clear guidelines for employers who use so-called ‘high-risk’ AI systems in hiring and assessing employee performances. This could also impact Canadian companies that operate or hire in the EU, as they may need to review these new regulations and ensure compliance.

Privacy Laws

As AI technology continues to evolve, employers in Canada should be aware of new responsibilities under privacy laws when using AI in hiring processes. In using AI for recruitment and selection purposes, there are several measures employers may need to take to protect personal information. These steps may involve obtaining consent to safeguard applicants’ information and being mindful of how personal data is collected, used and shared. Employers should review their obligations under privacy laws when using AI tools to gather and manage employee information.

Takeaways

Though AI tools can be a powerful asset for employers, including through efficiently processing applications, employers should, in our opinion, remain aware of the potential downsides of AI systems, including their potential to perpetuate biases.

Employers should, in our view, consider doing the following;

• Reviewing how the AI tools or systems decide what data they rely on and whether it may identify characteristics (such as religion, race, gender, etc) or other factors of prohibited grounds.
• Ensuring employers understand compliance risks associated with using AI in hiring and familiarize themselves with relevant laws and legislation requirements to avoid potential penalties.
• Developing AI strategies that prioritize human oversight in its applications to streamline processes.

We will continue to monitor any changes in legislation regarding AI. If you have more questions about the above information, we strongly encourage you to contact employment lawyers Toronto Sultan Lawyers online or by telephone at 416-214-5111.