Recruitment AI Under Scrutiny: What the EU’s New Laws Mean for You

The European Union’s AI Act, which came into force on August 1, 2024, has reached its first compliance deadline on February 2, 2025. This ground-breaking regulation is set to reshape how organizations use AI, particularly in recruitment and HR.

For Chief People Officers (CPOs), HR Directors, and Talent Acquisition Leads, the Act introduces strict rules on AI-driven hiring tools, placing many recruitment technologies in the "high-risk" category. While AI vendors may promote their solutions as the future of talent acquisition, the regulatory realities paint a different picture—one that demands immediate attention.

HR Leaders Beware: AI in Hiring is Now ‘High-Risk’

The EU AI Act categorizes AI systems into four risk levels:

• Unacceptable Risk: Banned outright (e.g., social scoring, predictive policing)
• High Risk: Subject to strict compliance measures (e.g., AI-driven recruitment tools)
• Limited Risk: Basic transparency requirements (e.g., chatbots)
• Minimal Risk: Largely unregulated (e.g., AI-powered email auto-replies)

High-Risk Classification for Recruitment AI

Under the Act, AI tools used in recruitment, employee selection, and workplace decisions are classified as high-risk, making them subject to stringent oversight, including:

• Mandatory risk assessments
• AI system registration
• Strict risk management protocols
• Human oversight in decision-making
• Detailed technical documentation and compliance reporting

If your organization relies on AI for hiring, it’s now your responsibility to ensure these tools align with the EU AI Act’s regulations.

Prohibited Practices: What HR Leaders Must Stop Using

Banned AI Practices Under the Act

The EU AI Act prohibits several AI practices deemed "unacceptable," including:

• Emotion Recognition in Workplaces & Schools: AI tools that analyze facial expressions, voice, or gestures to determine emotions.
• Social Scoring Systems: Ranking individuals based on behavioral data.
• Behavioral Manipulation: AI systems designed to exploit vulnerabilities.
• Scraping Internet Images for Facial Recognition: Collecting biometric data without consent.

Emotion Recognition in Recruitment is Now Illegal

Yes, AI-driven interview analysis tools that infer a candidate's emotional state are now non-compliant under the EU AI Act. As of February 2, 2025, the prohibition on emotion recognition systems in workplace settings has come into effect. This ban specifically covers AI systems that identify or infer emotions or intentions based on biometric data in workplace environments.

The prohibition extends to recruitment processes, which are considered part of the workplace context. AI tools used for analysing candidates' emotional states during interviews fall under this category and are now prohibited. This is because:

• They use biometric data (such as facial expressions or voice patterns) to infer emotions.
• They operate in a workplace-related context (recruitment).
• They attempt to identify or infer emotions of natural persons (job candidates).

It's important to note that this prohibition is part of the EU AI Act's effort to protect individuals from potential misuse of AI technologies that could infringe on privacy and lead to discriminatory outcomes. Companies using such tools for recruitment in the EU or for EU citizens must now either redesign their applications to avoid these prohibited practices or remove them from the European market.

Non-compliance with this prohibition could result in severe penalties, including fines of up to 7% of total global annual revenue per violation. Therefore, organizations should immediately review and adjust their recruitment processes to ensure compliance with the new regulations.

Key Questions to Ask AI Vendors

To ensure compliance and ethical AI use in recruitment, HR leaders must ask AI vendors the right questions before deploying their tools. Here are key areas to focus on:

1. Transparency and Explainability

• How does your AI system make decisions or recommendations?
• Can you provide clear explanations of the AI's decision-making process to candidates?

2. Bias and Fairness

• What measures are in place to prevent and mitigate bias in the AI system?
• How do you ensure fair treatment across different demographic groups?

3. Data Protection and Privacy

• How do you ensure compliance with GDPR and other relevant data protection laws?
• What data is collected, how is it used, and how long is it retained?

4. Human Oversight

• How does your system incorporate human oversight in the decision-making process?
• What training do you provide to help HR teams effectively oversee AI tools?

5. Compliance with EU AI Act

• How does your system align with the EU AI Act’s requirements for high-risk AI?
• What documentation can you provide to demonstrate compliance?

6. Customization and Adaptability

• Can your AI models be customized to our specific needs and industry requirements?
• How adaptable is your AI to changes in recruitment processes or regulations?

7. Performance and Accuracy

• What evidence can you provide of the system’s accuracy and effectiveness?
• How do you measure and ensure ongoing accuracy of the AI system?

8. Risk Management

• What risk assessment and management processes are in place for your AI system?
• How do you handle potential errors or issues in AI decision-making?

Key Compliance Challenges for Recruitment AI

1. Data Quality and Bias Mitigation

• AI systems must use high-quality, unbiased datasets to ensure fair hiring decisions.
• Employers must proactively detect and mitigate bias in AI-driven selection processes.

2. Transparency and Explainability

• Organizations must clearly communicate to candidates when AI is used in hiring.
• AI-assisted decisions must be explainable to ensure fairness and compliance.

3. Human Oversight

• The law mandates that humans remain in control of AI-assisted recruitment.
• Employers must balance AI efficiency with human judgment in decision-making.

Compliance Requirements: What HR Teams Need to Do Now

1. Record-Keeping and Documentation

• Maintain detailed records of AI-assisted hiring decisions.
• Develop robust data governance policies to track AI use.

2. Continuous Monitoring and Auditing

• Implement regular audits to assess AI performance and compliance.
• Update AI systems frequently to ensure ongoing alignment with regulations.

3. Cross-Border Considerations

• UK-based companies hiring in the EU must comply with the Act.
• Even UK-only firms should prepare for similar AI regulations in the near future.

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Conclusion

The EU AI Act is a wake-up call for HR leaders relying on AI for recruitment. Failing to comply isn’t just a legal risk—it’s a reputational one.

By proactively adapting to these new regulations, CPOs and HR Directors can not only ensure compliance but also lead the way in ethical and responsible AI hiring practices. The time to act is now.

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