Labor regulators worldwide are scrutinizing the use of AI in hiring and workplace monitoring. In the U.S., several states have passed laws requiring transparency when AI is used to screen job applicants. The EU has gone further, labelling employment-related AI systems as “high-risk” under its AI Act.

Advocates argue that regulation is essential to prevent discrimination, protect worker rights, and ensure algorithmic fairness. Cases of biased hiring tools that disadvantage women or minority groups have underscored the urgency of oversight.

Employers, meanwhile, face growing compliance challenges, balancing efficiency gains from AI with the risk of reputational and legal fallout. The issue is expected to remain a key flashpoint as organizations adopt AI-powered HR technologies at scale.