Lawmakers look to regulate employer use of AI for wage decisions - PropertyCasualty360

Lawmakers are increasing scrutiny of employer use of AI and automated decision tools for setting or influencing employee compensation. The focus is on curbing potentially discriminatory impacts and increasing transparency in how these systems affect wages.

Illinois has amended its Human Rights Act to prohibit employers from using AI tools in employment decisions without notifying employees and ensuring non-discrimination. Representative Sara Feigenholtz stated the amendment aims to 'ensure fairness and transparency' as AI becomes more integrated into workplace decisions. Similar legislation is pending in at least seven other states according to the PropertyCasualty360 report.

The regulatory attention follows years of employers deploying AI systems for compensation decisions without specific oversight. The amendments require disclosure when AI is used but do not mandate transparency about which specific factors the AI considers in its decisions. This represents one of the first state-level attempts to regulate AI use in employment compensation specifically.