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HR Party of One is brought to you by BerniePortal.

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The use of Artificial Intelligence (AI) in the workplace has sparked significant

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concerns about increased discrimination. And with AI becoming increasingly difficult to

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avoid in the workplace, I know I’ve definitely been thinking

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about how it can impact workplace diversity, equity, and inclusion.

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But will AI actually lead to more workplace discrimination? The answer isn’t straightforward.

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If employers rely too heavily or carelessly on AI, they could risk unintentional discrimination and

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face serious legal consequences. Recognizing the growing impact of AI on hiring practices and the

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need for oversight, the EEOC appointed its first Chief AI Officer on June 10,

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2024. This move highlights the EEOC’s commitment to ensuring that AI tools are

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used fairly and ethically, protecting workers’ rights and promoting a more inclusive workplace.

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A notable example of AI-induced discrimination occurred in 2023 when iTutorGroup,

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an online learning platform based in China, used AI recruitment software programmed to

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automatically reject all female applicants over the age of 55 and male candidates over the age of

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60. This case marked the first U.S. discrimination lawsuit involving AI hiring tools, and highlighted

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the potential risks of unregulated AI use. Keep watching to learn what the consequences were.

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It’s clear that AI is already making a significant impact on the workplace, and policymakers are

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actively responding to these changes. In this episode, we’ll cover the pros and cons of AI use

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in the workplace and EEOC Guidelines. Let’s get started!

Pros of AI Use in the Workplace

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The Pros and Cons of AI Use in the Workplace.

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AI in the workplace has its pros and cons, particularly in our day-to-day

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HR processes. Let’s start with the pros. As a busy HR Party of One, there’s no doubt

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that AI can save you time and energy as you complete your day-to-day HR processes. Today,

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many HR professionals are regularly using AI to help with the following workplace tasks:

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Recruitment and hiring: to analyze resources, screen applicants and resumes. If you have

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thousands of applications for one role, using AI can be helpful. According to Sage Group,

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at least 24% of companies already use AI to hire employees. Using AI in recruitment and

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hiring can also reduce costs and ensure the best candidates are seen quickly.

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Employee Onboarding: to personalize learning using virtual reality systems

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Task and Meeting Management: to optimize scheduling, reallocate resources,

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and track meeting notes and action items, saving HR time and energy.

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Softwares like FirefliesAI can even send recap emails to meeting attendees for you!

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HR Administration and Compliance: to automate payroll and benefits administration processes,

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reducing the risk of human error.

Cons of AI Use in the Workplace

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Those are some pretty attractive reasons to use AI for recruitment,

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so why wouldn’t you dive right in? Because while AI can be a valuable tool in the HR toolkit,

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the cons are significant, especially when used in recruitment and hiring. AI use in recruitment can

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lead to unintended biases and violations of the ADA, ADEA, the Civil Rights Act of 1964,

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and other significant discrimination laws. Let’s dive into how this can happen:

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Historical Data Bias: One major issue with using AI as a screening tool is

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that it relies on the data you provide. For example, if you detail the application

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requirements and describe previous successful employees, the AI will use this information

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to find candidates it thinks you want to hire, and this can lead to problems.

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Imagine your company has been around for 50 years and historically hired more men

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than women for certain roles. If you supply the AI with this historical data, it might

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limit its search to men, perpetuating the pattern of gender bias. In fact,

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Amazon had to scrap an AI hiring tool because it was doing exactly this. The fact of the matter is,

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the technology isn’t quite there yet to avoid unintended discriminatory practices.

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Exclusionary Filters: AI might unintentionally use filters that exclude qualified candidates from

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diverse backgrounds. For example, it might require certain keywords or experiences that are less

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accessible to underrepresented groups, leading to a lack of diversity in your candidate pool.

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Automated Rejections: Another issue is when AI systems automatically reject applicants who,

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due to a disability (for example), cannot interview in person. This denies reasonable

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accommodations that could enable these candidates to participate fully in the

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hiring process. Additionally, AI might ask candidates questions about disabilities or

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medical conditions before a job offer, which can be discriminatory. As a general rule,

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screening out an applicant due to their disability is considered a violation of the ADA if the

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applicant can perform the essential functions of the job, with or without reasonable accommodation.

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These are only a few of the ways that AI use in

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the workplace can go wrong– but the possibilities are endless.

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Keep in mind that there are legal ways to screen candidates efficiently! Knock-out

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questions like “Are you authorized to work in the United States?” or “Do you have X years

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of experience in this field?” or “Are you willing to relocate?” to narrow down your candidate pool.

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Using BerniePortal, I can customize these questions and have full control

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over how they are used. That way, I can rule out candidates who would not

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ultimately be interested in a role at our company, without risking discrimination.

The AI Bill of Rights

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It’s clear that policymakers are quickly responding to the prevalence of AI in

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the workplace. Just a year before the iTutor Group lawsuit, in October 2022,

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the EEOC addressed the increasing use of AI in society by developing

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a blueprint for an AI Bill of Rights highlighting the following worker rights:

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You should be protected from unsafe or ineffective systems.

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You should not face discrimination by algorithms and systems should

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be used and designed in an equitable way. You should be protected from abusive data

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practices via built-in protections and you should have agency over how data about you is used.

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You should know that an automated system is being used and understand how and why

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it contributes to outcomes that impact you; and You should be able to opt out, where appropriate,

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and have access to a person who can quickly consider and remedy problems you encounter.

AI Disparate Impact Guidance

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By 2023, the EEOC released a document called the AI Disparate Impact Guidance

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which clarified that the EEOC treats employer use of algorithmic decision-making tools as an

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employment “selection procedure” under Title VII of the Civil Rights Act of 1964. This

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notified employers that they must comply with anti-discrimination laws as technology evolves.

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The document focuses on preventing workplace discrimination, and asks

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the following primary questions: Does the employer use a particular

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employment practice that has a disparate impact on the basis of race, color,

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religion, sex, or national origin? If so, can the employer show that

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the selection procedure is job-related and consistent with business necessity?

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Is the selection procedure associated with the skills needed to perform the job successfully? And

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Is there a less discriminatory alternative available?

The Four-Fifths Rule

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It can be difficult for HR to determine if a certain algorithmic selection process used in

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recruitment or hiring is inherently biased or discriminatory. The “Four-Fifths rule,”

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published by the EEOC in 1978, states that one rate is substantially different from another

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if their ratio is less than four-fifths (or 80%). This rule of thumb can help employers

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determine if their processes result in discrimination or involve bias.

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The technical assistance document uses the following example to explain the rule:

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An employer administers a personality test to 80 White applicants and 40 Black applicants.

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48 of the White applicants and 12 of the Black applicants advance to the next step.

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The selection rate is thus 48/80= 60% for White applicants and 12/40 or 30%

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for black applicants. The ratio of the two rates is 30/60=50%, which is less than 80%,

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thus failing to meet the requirements of the four-fifths rule. The employer may be able to

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conclude that the personality test administered discriminates against Black applicants.

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Keep in mind that the rule is just a guideline and isn’t applicable in all

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circumstances. An AI-related employment practice that follows this rule isn’t necessarily lawful.

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There has actually been a push in recent years to ditch the four-fifths rule altogether.

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According to an AI Bias panel, “The four-fifths rule is a proclamation

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that practices that keep up to 20% more of a disadvantaged group from being hired should

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be accepted without further scrutiny.” This raises an important question: Is it legal or

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ethical to discriminate by a smaller margin? As an HR pro, you know that it is illegal for

Principles for AI Systems in the Workplace

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even a single person to be discriminated against because of the AI tools you use.

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That’s why it’s extremely important for HR leaders and hiring managers to analyze,

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evaluate, and regularly monitor the processes that their job sites and recruitment platforms use. To

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support this, on May 16, 2024, the White House released a fact sheet with a set of principles

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employers can apply to the deployment of AI systems in the workplace. Let’s take a look:

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Centering Worker Empowerment: Workers should have genuine input in the design,

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development, testing, training, use, and oversight of AI systems.

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Ethically Developing AI: AI systems should be designed,

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developed, and trained in a way that protects workers.

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Establishing AI Governance and Human Oversight:

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Organizations should have clear governance systems,

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procedures, human oversight, and evaluation processes for AI systems in the workplace.

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Ensuring Transparency in AI Use: Employers should be transparent with both employees

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AND job seekers about the AI systems that are being used in the workplace.

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Protecting Labor and Employment Rights: AI systems should not violate or undermine workers’ rights.

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Using AI to Enable Workers: AI systems should assist, complement,

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and enable workers, and improve job quality.

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Supporting Workers Impacted by AI:

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Employers should support or upskill workers during job transitions related to AI.

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Ensuring Responsible Use of Worker Data: Workers’ data collected, used,

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or created by AI systems should only be used to support legitimate business aims. This means

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that the responsibility falls on you to ensure any data collected or inputted by AI is kept secure.

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The White House’s framework for AI in the workplace can help you guide

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your business and make the most ethical decisions when using AI.

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At our most recent Weekdays with Bernie conference, a representative from Ford

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Harrison LLP, urged HR professionals to understand that the responsibility will

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ultimately fall on them to make ethical choices when using AI, which brings us

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to the concept of the “No-Third-Party Shield.” If you crash into another driver on the road,

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does the other person involved get mad at you or at your vehicle? Under Title VII,

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an employer is responsible for its use of algorithmic decision-making tools or AI

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even if their selection process goes through a third-party entity or software. This means

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you could still be held liable for what a platform does on behalf of your employer.

Best Practices for Protecting Your Business & Implementing AI

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At Weekdays with Bernie, Meredith Box shared the following best practices

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for protecting your business and implementing AI:

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Bring the experts to the table: If you are really unsure about an employment practice

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you are seeking to implement, reach out to an employment lawyer or AI expert

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Identify AI tools and processes: Develop clearly defined policies and procedures for employment.

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Regularly self-audit and monitor: Test the data and the product on a regular basis,

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and retain records for evidence. Conduct audits and self analyses

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on a regular basis: Determine if your employment processes have a large negative

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impact on particular groups of people. Implement regular user training:

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this can help ensure all parties involved are using AI ethically.

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Know the purpose: if you’re going to use AI, have a clear reason for why you’re using it.

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Be transparent: If you’re going to use AI in the recruitment or interviewing process,

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inform candidates of that as early on as in the job descriptions.

Final Thoughts

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Now that we’ve covered legal guidelines and best practices for AI in the workplace, I hope you

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feel empowered to use AI as a tool rather than a crutch. Since the technology isn’t foolproof yet,

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HR must carefully manage it and its use should always be balanced with human oversight.

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Oh and what happened to iTutorGroup? The company was sued for violating

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the Age Discrimination in Employment Act (ADEA) and paid a fine of $365,000 to more

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than 200 job applicants! Remember—your role is as strategic as you make it!