On May 18, 2023, the Equal Employment Opportunity Commission (EEOC) issued guidance on employment selection procedures when using software, algorithms, and artificial intelligence. The guidance includes a Q & A section to address how to monitor these tools.

            While Title VII of the Civil Rights Act of 1964 (Title VII) applies to all employment practices of covered employers including recruitment, monitoring, transfer and evaluation of employees, this new guidance is limited to the assessment of whether an employer’s selection procedures have a disproportionately large negative effect on race, color, religion, sex, or national origin.  This is referred to as disparate impact or adverse impact.


            The EEOC guidance includes definitions of “central terms”:

  • Software – the EEOC used the U.S. Access Board for the software definitions.  Software, broadly, is “information technology programs or procedures that provide instructions to a computer on how to perform a given task or function.”  Application software is “a type of software designed to perform or to help the user perform a specific task or tasks.”  Examples of software and applications include resume-screening software, chatbox software for hiring and workflow, and video interviewing software.
  • Algorithm – Generally, it is “a set of instructions that can be followed by a computer to accomplish some end.”  Algorithms are used so that employers can process data to evaluate, rate, and make other decisions about applicants and employees.
  • Artificial Intelligence (AI) – Congress has defined AI as “a machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations or decisions influencing real or virtual environments.”

The guidance includes examples of software that employers might use at different stages of the employment process.  Those examples include:

  • resume scanners that prioritize applications using certain keywords; 
  • employee monitoring software that rates employees based on keystrokes or other factors;
  • “virtual assistants” or “chatbots” that ask job applicants about their qualifications and rejects those who do not meet pre-defined requirements;
  • video interviewing software that evaluates applicants on facial expressions and speech patterns; and
  • testing software that provides “job fit” scores for individuals regarding their personalities, aptitudes, cognitive skills, or perceived “cultural fit” based on performance on a game or some other test.

Questions and Answers

            The EEOC guidance contains seven questions and answers to assist employers when using software, algorithms, and AI in their selection procedures.  Over 40 years ago the EEOC adoptedthe Uniform Guidelines on Employee Section Procedures (Guidelines) and they are still in use today.  The questions and answers make clear that the Guidelines would apply to an algorithmic decision-making tool used in a selection process.  Further, the Q & A section makes clear that employers should assess whether a selection procedure has an adverse impact on a protected group by checking whether using the selection procedure causes a selection rate for individuals in the protected group that is “substantially” less than the selection rate for another group. 

            In another question and answer, the EEOC encourages employers to at least ask their software vendor whether they did any evaluation regarding selection rates.  And this same question and answer makes clear that the employer is still responsible under Title VII if the selection procedure discriminates on a basis prohibited under the law even if the selection procedure was developed by a third party.  The remaining questions and answers discuss “selection rate” and the “four-fifths rule” which are found in the Guidelines.

            The EEOC encourages employers to conduct self-analyses on an ongoing basis to see if the selection procedures used treat protected groups differently.  Employers, then, could change the procedure going forward.

            A link to the new EEOC guidance is here:  https://www.eeoc.gov/select-issues-assessing-adverse-impact-software-algorithms-and-artificial-intelligence-used.

            As always, if you have any questions on this topic, please contact your Stall Legal attorney.