The EU AI Act is Here: A Wake-Up Call for HR Departments

By CompetenceGuru

If you thought the new EU AI Act was just a headache for tech giants like Google or OpenAI, think again. The world’s first comprehensive AI law has placed Human Resources squarely in the ”High-Risk” zone.

For HR professionals, this legislation isn’t just about compliance; it’s about a fundamental shift in how we hire, manage, and evaluate people. Here is what you need to know to stay ahead of the curve (and avoid the massive fines).

1. Most HR Tech is Now ”High-Risk”

The AI Act classifies AI systems based on the risk they pose to fundamental rights. Crucially, almost every significant use of AI in HR is categorized as High-Risk.

If your software uses algorithms to do any of the following, you are in the spotlight:

• Recruitment: Parsing CVs, ranking candidates, or filtering job applications.

• Performance: Evaluating employee performance or assigning tasks.

• Employment Decisions: Making decisions on promotions, terminations, or contract renewals.

What this means: You can still use these tools, but you are now subject to strict obligations regarding transparency, accuracy, and human oversight.

2. Some Tools are Banned Completely (Start Audit Now)

Before you look at your ”High-Risk” tools, you must identify if you are using anything that is now Prohibited.

Effective February 2025, the use of AI for emotion recognition in the workplace is banned. If you use video interview software that claims to analyze a candidate’s ”mood,” ”stress levels,” or ”psychological state” via facial expressions, you must stop using it. These tools are considered an unacceptable violation of rights.

3. Your New Obligations: The ”Human in the Loop”

The days of ”the computer said no” are over. Under the AI Act, you must demonstrate:

• Human Oversight: An AI tool cannot make the final hiring or firing decision alone. A qualified human must review the output.

• Transparency: You must inform employees and candidates when they are interacting with an AI system or when an AI system is being used to make decisions about them.

• Bias Monitoring: You are responsible for ensuring your tools don’t discriminate based on gender, ethnicity, or age. ”The vendor’s algorithm did it” is no longer a valid excuse.

4. The Stakes Are High

The penalties are designed to sting. Non-compliance with ”High-Risk” obligations can lead to fines of up to €15 million or 3% of global turnover. Using a prohibited system (like emotion recognition) can cost up to €35 million or 7% of turnover.

The HR Action Plan

Don’t panic—prepare.

1. Audit Your Tech Stack: List every tool you use. Ask your vendors specifically: Is this system compliant with the EU AI Act’s High-Risk requirements?

2. Train Your Team: HR staff engaging with these tools need ”AI Literacy” training. They must understand how the tool works and where it might fail.

3. Update Policies: Revise your privacy notices and candidate handbooks to include clear disclosures about AI usage.

The Bottom Line

The EU AI Act is not a ban on innovation; it is a mandate for trust. By ensuring your AI tools are fair, transparent, and human-led, you don’t just avoid fines—you build a stronger, more attractive employer brand.