The New Jersey Employment Law Firm Blog
Employers’ use of artificial intelligence (AI) in hiring and other employment matters has raised concerns about how the technology may perpetuate discrimination in their processes. New Jersey and federal employment laws prohibit employment discrimination based on factors such as race, sex, disability, and age, among others. Recently, New Jersey has determined that these legal protections may make employers liable for discrimination resulting from AI technology. The New Jersey Attorney General (AG) and the Division of Civil Rights (DCR) issued guidance in January 2025 regarding “algorithmic discrimination” by employers using AI tools to aid in employment decisions.
While New Jersey does not yet have any laws that directly address the use of AI in hiring decisions, there is a proposed bill pending that would regulate the use of “automated employment decision tools.” This term refers to software that uses AI models to screen job applicants and identify candidates considered preferable for a position. Although that may seem harmless on its face, there is a problem: AI doesn’t think. Its responses are based on the prompts it is given by the user and are representative of the data on which it is trained, which may reflect historical institutional and systematic inequities. Therefore, if a machine learning application is told to weed out certain applicants based on a protected category, or is trained on biased data, it could result in biased recommendations.
The New Jersey AG and the DCR has launched a Civil Rights and Technology Initiative to review the risks of employment discrimination in AI tools.
A guidance document issued as part of the Initiative gives the example of an enforcement action by the federal Equal Employment Opportunity Commission (EEOC) in 2023 that resulted in a $365,000 settlement. The employer, according to the EEOC, programmed the software it used to screen job applicants in a way that led it to reject female applicants who were at least 55 years old. This resulted in the automatic rejection of over two hundred applicants based solely on age and sex. This is an overt example; algorithmic discrimination can be much more subtle in many cases.
In addition, on the federal level, in October 2024, the DOL issued guidance on how employers’ use of AI in employment decision-making could violate workers’ rights under federal wage and hour laws.
This remains an evolving area of the law, but with the right proofs, employers could be liable to their employees for damages if they violate workplace rights, intentionally or otherwise, by using AI. One of our experienced employment lawyers can evaluate your case and advise you of your rights. To schedule a confidential consultation, please contact us today online or call us at 973-781-1204.