Digital selection and contemplation in office

Is Your AI Hiring Technology Creating Legal Liability?

You can probably tell me which recruiting platforms your company pays for. But can you tell me which of those platforms are using AI to influence who gets considered for your open positions? Do you know what AI bot it is and how it learns?

More importantly, do you know how much filtering happens before a resume reaches you?

States are putting more scrutiny around how AI is used in employment decisions. Illinois, for example, amended its Human Rights Act to address the use of AI in recruitment, hiring, and other employment decisions, effective January 1, 2026.

You May Be Several Steps Removed From Your Own Candidate Pool

What happens when you have an opening?

Most likely, you tell HR you need to hire someone. Someone pulls up the job description, which may have been written five, ten, or even twenty years ago. HR interprets what you need based partly on that document, even though the person handling the search may have no idea what the job entails on a day-to-day basis. How can they? They have dozens of jobs to fill.

The technology gets layered on. None of this technology was necessarily added at the same time or by the same people. HR may have started with an ATS years ago, then added screening questions because they were getting too many applicants. Assessments came later. Someone brought in another platform for sourcing, and a third-party provider may be handling part of the process for certain positions. Now AI is showing up inside some of those systems.

The problem is that one system is often working from decisions made somewhere else in the process. If the job description was wrong to begin with, or HR misunderstood what you really needed, that can carry through everything that comes after it. Another tool may narrow the pool a little more, and another may rank what is left. By the time you see the resumes, you have no idea how many people were removed along the way or what assumptions were used to remove them.

You don’t see the plant manager who was filtered out because their title didn’t match. You don’t see the engineer whose experience was described using different terminology. You don’t see the industrial salesperson who knows every major account in your market but didn’t have the right keywords on their resume.

You only see who made it through.

The System May Be Doing Exactly What You Told It to Do

We see more often than not that something listed as a firm requirement in the job description really isn’t, or that another qualification that barely gets mentioned turns out to be one of the most important parts of the job.

That happens because jobs change faster than job descriptions. The person who wrote the original description may be gone. The department has changed. The equipment has changed. The customers have changed. The role has taken on responsibilities that didn’t exist when the description was written.

But that old information is the basis of the recruiting process.

You start with a process where the first assumption is wrong, and that information gets carried through every layer of technology bolted onto the hiring process. Software works from the information and criteria it has been given. The system may be doing exactly what it was told to do. So may every system that came after it.

That doesn’t mean any of them are looking for the person you really need.

Garbage in, garbage out.

AI Turns Your Recruiting Problem Into a Compliance Question

For years, all of those filters have mostly created a recruiting problem. You missed candidates and probably never knew it.

AI adds another concern.

If your ATS, screening tool, or third-party recruiting platform uses AI to influence who gets considered for employment, your company needs to understand what that technology is doing and whether its use complies with the laws where you hire.

States are putting more scrutiny around how AI is used in employment decisions. Illinois amended its Human Rights Act to address AI in recruitment, hiring, and other employment decisions, effective January 1, 2026. It now includes notice requirements for covered uses of AI.

You may assume HR has this covered. HR may assume the software provider has it covered. The software provider may be one of several vendors involved in the process. The person reviewing the resumes may not know which systems used AI or how candidates were filtered before they arrived.

That is the part companies need to look at closely.

It isn’t necessarily one AI tool making one decision. It may be years of recruiting technology bolted together, with each layer making its own decisions or applying its own criteria. AI is now being added somewhere inside that process.

The vendor provides the technology. Your company is still making the employment decision.

That is how a recruiting process built for efficiency can become a legal liability without anyone having a clear view of where the problem started.

Do You Know What Happens Before a Resume Reaches You?

If you are responsible for hiring someone, it is worth understanding the entire path a candidate takes before their resume reaches you.

When was your job description last reviewed by someone who understands the position? What criteria did HR use to set up the search? What does the ATS filter? What do the screening questions eliminate? Are assessments being used? Is AI ranking or filtering out candidates? Does a third-party platform add another filter before HR even sees them?

You may think you are deciding who to interview.

You may be deciding who to interview from the people who survived every filter that came before you.

What already was a recruiting problem may also become a legal problem.

 

This article is for general informational purposes and is not legal advice. Employers should consult qualified employment counsel regarding AI hiring tools and applicable federal, state, and local requirements.

About the author: Nelleke Maxwell is Co-Owner of Neeljym Search Group, a specialized recruiting firm serving the commercial insurance, engineering, commercial construction, manufacturing, and industrial sales industries. She works alongside clients and the Neeljym team to support business growth through recruiting, industry insights, and thought-provoking content focused on leadership and hiring. 

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