Tremendous shifts in the workplace are driving significant changes in recruiting and hiring as employers attempt to find qualified candidates in today’s highly competitive labor market.
For example, employers are more often turning to technology to reduce time-to-hire and build applicant-friendly hiring practices. According to HireRight’s 2019 Employment Screening Benchmark Report, 32% of employers have deployed mobile-friendly applications and screening processes to make it easier for candidates.
At the same time, with today’s ongoing labor shortage, companies are looking for new ways to procure talent, including hiring more non-traditional employees such as contract, temporary, and contingent workers.
But these new processes and policies raise critical legal questions and are triggering new laws to protect workers and guide employers. Here’s what employers would do well to keep in mind in 2020.
Artificial Intelligence and Biometrics
According to HireRight’s Benchmark Report, 25% of human resources professionals believe artificial intelligence (AI) holds big benefits for recruiting in the future.
Many have already deployed AI tools to manage recruitment. Video interview platforms on the market, for example, use AI to evaluate a job seeker’s facial expressions and how they answer questions during a recorded interview. The tools then recommend the best applicants for further consideration.
But not everybody is cheering these solutions. Because of the way the tools are built, critics believe AI could make employment discrimination worse, reflecting “institutional and systemic biases,” according to a report from Upturn, a public advocacy research group.
As we first wrote in 2017, “But remember, AI learns as it goes. As seen above, that may be great in responding to candidates’ questions, but it may also offer risk during the actual sourcing process. For example, if an AI app, after reviewing thousands of candidates for thousands of jobs “realizes” that a significant number of candidates it has “recommended” are 25 year-old males with five years of experience, it may engineer its own algorithm that results in a preference for candidates who first meet those criteria, or could choose to exclude those candidates altogether as a result of fears of over-saturation of this candidate type.”
And lawmakers are starting to take notice of possible hitches using AI. In 2019, Illinois lawmakers passed the Artificial Intelligence Video Interview Act, which took effect on January 1. If employers use AI to evaluate applicant-submitted videos, they must alert candidates that AI may be used, give them information about how the technology works and get their consent.
Federal legislators also are wading into the debate. The Algorithmic Accountability Act of 2019 was introduced in April and, if approved, would govern how AI and related tools are used. California lawmakers are taking a different tack. The California Assembly Concurrent Resolution No. 125 encourages the use of AI to eliminate bias and discrimination in hiring. Both measures could be up for debate in 2020, along with other proposals that may pop up across the country.
Meanwhile, as employers collect scads of information about job applicants and employees, they also could run afoul of laws that control the use of biometric data, which includes fingerprints and scans of facial features that are commonly used in AI. Illinois is again a leader here with its Biometric Information Privacy Act, which guides the collection and use of such data. Texas and Washington also have biometrics laws. More states are expected to jump on the “biometric bandwagon,” according to The National Law Review.
That means that in 2020, employers must not only track new AI and biometrics laws but be careful as they implement AI solutions and build alternatives for job seekers who opt-out.
Just as employers must be cautious with biometric information, they also must pay more attention to other personal data they collect as states begin to roll out data privacy laws
The new California Consumer Privacy Act covers companies with gross annual revenues of more than $25 million that buy, receive or sell personal information of 50,000 or more consumers, households or devices, or that earn 50% or more of their annual revenue from selling consumers’ personal information.
Starting in January, these employers must provide privacy notices to employees about the information they gather and maintain reasonable security measures to protect it, among other requirements.
In New York, employers soon must comply with the Stop Hacks and Improve Electronic Data Security Act, or SHIELD Act, which requires companies that employ New York residents to take steps to safeguard employees’ private information. It takes effect on March 21, 2020.
And it’s likely this is just the beginning for data privacy in the United States. In 2019, New York lawmakers debated a proposed New York Privacy Act, which is similar to California’s law. In 2020 and beyond, more lawmakers will bring data privacy measures to the table.
The gig economy is expected to continue to grow in 2020 as employers look to independent contractors to find the qualified talent they need. One survey by BCG Henderson Institute, in partnership with Harvard Business School’s Managing the Future of Work initiative, found that about 40% of corporate executives believe that freelancers will take up a bigger share of their company’s workforce through 2023.
But some state lawmakers are cracking down on companies that are increasingly relying on freelancers to do the work instead of hiring salaried employees, who typically can take advantage of benefits such as workers’ compensation, health insurance, and paid time off.
Effective January 1, California’s Assembly Bill 5 outlines guidelines for employers to follow to determine if a worker should be classified as an employee or an independent contractor. Independent contractors, according to the law, must be free from any control or direction of the employer; complete work that is “outside the usual course” of the employer’s business; and take part in an “independently established trade, occupation, or business.”
Other new laws affecting recruitment and hiring are likely to come down the pike in 2020, covering marijuana accommodations, criminal records checks, and pay equity. And that means that as the new decade opens, employers must be mindful of not only the latest tools and trends in hiring but the newest compliance requirements too.