What CHROs Need to Know About the EU AI Act
The EU AI Act is a significant piece of legislation that mandates compliance with specific regulations regarding the use of artificial intelligence (AI) across the European Union (EU) and beyond. As deadlines approach, it is crucial for Chief Human Resources Officers (CHROs) to understand the implications of this act for their organizations.
Overview of the EU AI Act
With compliance deadlines starting from February 2025 for prohibited use cases and August 2026 for high-risk AI systems, the act presents both challenges and opportunities for HR leaders. It is essential for CHROs to act swiftly to align their AI use with the provisions of the act.
Understanding the Impact of AI in HR
The rapid rise of AI technologies, particularly in generative AI, has transformed business operations, including HR functions. While AI offers the potential to enhance efficiency and improve decision-making, it also poses compliance challenges as organizations must adhere to emerging AI regulations.
Cataloguing and Managing HR AI Use Cases
One critical step for CHROs is to identify and catalogue the various AI systems employed within HR functions. The EU AI Act classifies AI systems into different risk tiers, with many HR-related use cases, such as recruitment and performance evaluations, falling under the high-risk category. Therefore, it is vital for CHROs to work closely with legal and compliance teams to assess all AI tools in use.
This inventory should encompass both in-house developed AI tools and those provided by HR technology vendors. By actively managing high-risk use cases, organizations can comply with the EU AI Act and protect the integrity of their HR practices.
Proactively Addressing Compliance Timelines
Compliance with the EU AI Act requires adherence to specific enforcement timelines. Immediate actions must be taken to address prohibited use cases by February 2025, while high-risk systems must achieve compliance by August 2026. CHROs should prioritize immediate steps for prohibited AI use cases, ensuring that they are either restructured or removed to avoid penalties that could reach up to €35 million or 7% of global turnover for severe violations.
Given that most HR AI use cases are likely to fall under the high-risk category, CHROs must maintain close collaboration with Data Protection Officers (DPOs), legal counsel, IT, and HR technology vendors to ensure compliance.
Upskilling for AI Literacy and Oversight
The EU AI Act emphasizes the need for human oversight of high-risk AI systems. HR teams must ensure that employees overseeing or utilizing these systems possess sufficient AI literacy. This entails developing AI literacy programs and policies to educate staff on the concept of AI, its limitations, and the ethical considerations surrounding its use.
To meet regulatory requirements, targeted training should be provided for HR team members, employees, and managers who engage with AI in workflows. This training should encompass both technical aspects and ethical considerations such as fairness, transparency, and accountability.
Implementing AI Governance Frameworks
Establishing an AI governance board is essential for monitoring the ethical use of AI within organizations. This ongoing oversight helps maintain compliance and adapt to any updates in legislation, ensuring that technology enhances rather than undermines employee rights and well-being.
Conclusion
The EU AI Act presents a critical regulatory framework that HR leaders must navigate. While compliance poses challenges, it also offers an opportunity to adopt AI responsibly, mitigate risks, and innovate within HR practices. By cataloguing AI use cases, adhering to compliance timelines, and upskilling their workforce, CHROs can prepare their organizations for the act’s requirements. Failure to comply could result in substantial penalties, making it imperative for HR leaders to act strategically and swiftly.
As the landscape of AI continues to evolve, so too must HR practices, ensuring that technology serves to enhance employee rights and organizational values.
