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How AI Discrimination Is Changing Employment Law

How AI Discrimination Is Changing Employment Law

You submitted dozens of applications. Your resume is solid. Your qualifications match perfectly. But you never hear back.

Automated hiring systems now screen millions of job candidates, and federal employment discrimination laws protect you when AI systems discriminate against you on the basis of your race, color, religion, sex, national origin, age, disability, or genetic information.

AI discrimination in hiring is real, and California workers have strong legal protections when these systems produce biased outcomes.

How Hiring Algorithms Make Decisions

Employers use artificial intelligence to sort applications quickly. These systems perform several functions:

  • Scan resumes for keywords and patterns
  • Analyze video interviews for speech patterns and facial expressions
  • Score candidates based on data from past hires
  • Filter applicants before human review
  • Rank job seekers by predicted success

The promise is efficiency.

But there’s a serious problem: AI systems develop their decision-making based on training data; when those data overrepresent or underrepresent certain groups, it can cause biased results.

Potential Forms of AI Bias in Hiring

Automated discrimination can surface at multiple stages:

Resume Screening Problems

  • Employment gaps: Penalizing breaks that disproportionately affect women who took parental leave
  • Name bias: Filtering out candidates with names associated with certain ethnicities
  • Address screening: Excluding applicants from specific neighborhoods or zip codes

Video Interview Issues

  • Speech analysis: Disadvantaging non-native speakers or those with speech impediments
  • Facial recognition: Performing poorly on candidates with darker skin tones
  • Expression reading: Misinterpreting facial movements that differ due to medical conditions
  • Accessibility barriers: Creating insurmountable obstacles for deaf or blind applicants

Personality and Skills Tests

  • Mental health screening: Eliminating candidates based on traits correlating with anxiety or depression
  • Disability proxies: Using reaction time or dexterity measures that screen out people with disabilities
  • Culture fit algorithms: Replicating existing demographic patterns by favoring similar candidates

Federal Protections Against AI Discrimination

Title VII, the federal law that protects employees and job applicants from employment discrimination based on race, color, religion, sex, and national origin, applies to AI hiring tools.

Laws That Apply

How Discrimination Gets Measured

Using the four-fifths rule, if a personality test scored by AI has a selection rate of 30% for Black applicants and 60% for White applicants, the EEOC might view this as evidence of discrimination against Black applicants.

Important: Even though EEOC guidance on AI was recently removed from the agency website, the elimination of government guidance does not alter fundamental anti-discrimination laws such as Title VII of the Civil Rights Act and the Americans with Disabilities Act.

Employers remain liable for discriminatory outcomes even when AI makes the decisions.

California’s Strict AI Regulations Under FEHA

The California Fair Employment and Housing Act prohibits employment discrimination based on:

  • Race, religious creed, color, national origin, ancestry
  • Physical disability, mental disability, medical condition
  • Genetic information, marital status
  • Sex, gender, gender identity, gender expression
  • Age, sexual orientation
  • Military or veteran status

October 2025 AI Requirements

On October 1, 2025, new California regulations took effect. The regulations prohibit employers from using automated decision system (ADS) or criteria that result in discrimination based on protected categories under FEHA and must accommodate religious and disability needs.

What California employers must do now:

  • Conduct anti-bias testing or independent audits of AI hiring tools
  • Keep records of ADS-related documentation for at least four years
  • Provide accommodations when AI tools may discriminate based on disability or religion
  • Ensure human participation in employment decisions
  • Review vendor contracts to address liability for discriminatory AI tools

Courts and agencies may consider the quality, scope, recency, results, and employer response to bias testing when evaluating discrimination claims.

What You Can Do If AI Rejected You

Step 1: Document Everything

  • Save job postings and your application materials
  • Keep all email and portal communications
  • Note the date and time of rejections
  • Record which AI assessments you completed (video interviews, personality tests, skills games)
  • Screenshot any feedback or rejection messages

Step 2: Identify Patterns

Look for signs of algorithmic bias:

  • Consistent rejection at initial screening despite meeting qualifications
  • Rejection within minutes or hours of applying
  • Feedback that seems disconnected from your actual qualifications
  • Similar timing patterns across multiple applications
  • Rejection after completing AI-based assessments

Step 3: File Within Deadlines

California Civil Rights Department:

EEOC:

Critical: Missing these deadlines eliminates your ability to pursue legal action.

Step 4: Get Legal Help

An employment attorney can:

  • Identify whether AI discrimination affected your application
  • Build a case showing the employer’s system violated California or federal law
  • Handle communications with government agencies
  • Pursue compensation for lost opportunities

Employers Cannot Escape Liability

Common employer defenses that don’t work:

  • “We bought the tool from a vendor”—employers remain liable for discriminatory outcomes
  • “The AI made the decision”—drawing an artificial distinction between software decisionmakers and human decisionmakers would potentially gut anti-discrimination laws in the modern era
  • “We didn’t know it was biased”—employers must regularly audit these systems, stay informed on evolving regulations, and ensure compliance to mitigate legal risks

Vendor liability: The regulations extend liability for ADS-driven discrimination to an employer’s “agent,” which includes anyone acting on behalf of an employer to exercise a function traditionally exercised by the employer, including when such activities are conducted through the use of an automated decision system.

Legal Remedies Available

If you win an AI discrimination case, you may receive:

  • Back pay for positions you should have received
  • Lost wages and benefits
  • Emotional distress compensation
  • Job offers or reinstatement
  • Injunctive relief requiring the employer to fix or eliminate discriminatory AI tools
  • Attorney fees and legal costs
  • Punitive damages in cases of intentional discrimination

Contact Malk Law Firm About AI Discrimination

The rise of automated hiring doesn’t eliminate your right to fair consideration. California’s anti-discrimination laws apply whether a human or an algorithm rejected your application.

If AI screening tools discriminated based on your age, disability, race, gender, or another protected characteristic, you have legal recourse. The new California regulations make employers accountable for the technology they deploy, and federal law provides additional protections.

We hold employers accountable when their hiring practices violate state and federal law.

Contact us today to discuss your situation.

Author Bio

Michael Malk is the Founder and Managing Attorney of Malk Law Firm, a Seattle employee rights law firm he started in 2007. With more than 20 years of experience practicing law, he has dedicated his career to representing clients throughout California and Washington in a wide range of legal areas, including unpaid wages, sexual harassment, discrimination, wrongful termination, and other employee rights matters.

Michael received his Juris Doctor from the University of California— Davis School of Law and is a member of the State Bar of California, the State Bar of Washington, and the American Bar Association. He has received numerous accolades for his work, including being named as one of the “Top Attorneys in Southern California” by Los Angeles Magazine in 2018 and being selected as a Super Lawyer for six consecutive years.

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