{"id":10172,"date":"2026-04-06T12:25:09","date_gmt":"2026-04-06T12:25:09","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/eeoc-releases-guidance-addressing-artificial-intelligence-and-the-potential-for-disparate-impact-discrimination-concerns-under-title-vii\/"},"modified":"2026-04-06T12:25:09","modified_gmt":"2026-04-06T12:25:09","slug":"eeoc-releases-guidance-addressing-artificial-intelligence-and-the-potential-for-disparate-impact-discrimination-concerns-under-title-vii","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/eeoc-releases-guidance-addressing-artificial-intelligence-and-the-potential-for-disparate-impact-discrimination-concerns-under-title-vii\/","title":{"rendered":"EEOC Releases Guidance Addressing Artificial Intelligence and the Potential for Disparate Impact Discrimination Concerns Under Title VII"},"content":{"rendered":"\n
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On May 18, 2023, the U.S. Equal Employment Opportunity Commission (\u201cEEOC\u201d) released new \u201cQuestions and Answers\u201d guidance on \u201cAssessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964.\u201d\u00a0 The guidance is intended to \u201chelp employers prevent the use of AI from leading to discrimination in the workplace,\u201d with a specific focus on disparate impact issues that may arise under Title VII.\u00a0 The guidance is discussed in further detail below.<\/p>\n

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Disparate Impact Discrimination Under Title VII<\/h3>\n

The guidance begins by reminding employers that, under Title VII, employers are prohibited \u201cfrom using neutral tests or selection procedures that have the effect of disproportionately excluding persons based on race, color, religion, sex, or national origin, if the tests or selection procedures are not \u2018job related for the position in question and consistent with business necessity.\u2019\u201d\u00a0 The guidance is specifically focused on this type of discrimination (as opposed to intentional \u201cdisparate treatment\u201d discrimination).\u00a0<\/p>\n

Assessing Adverse Impact Resulting From the Use of AI Selection Tools<\/h3>\n

According to the EEOC, an employer\u2019s use of artificial intelligence (\u201cAI\u201d)\u2014which is referred to in the guidance as \u201calgorithmic decision-making tools\u201d\u2014may implicate disparate impact concerns under Title VII.\u00a0<\/p>\n

The guidance explains that the use of AI tools to \u201cinform decisions about whether to hire, promote, terminate, or take similar actions toward applicants or current employees\u201d may constitute a \u201cselection procedure\u201d under Title VII.\u00a0 As the guidance notes, selection procedures that have a disparate (adverse) impact on a protected class of employees may violate Title VII, unless the employer can show that the selection procedure is \u201cjob related and consistent with business necessity,\u201d as required by the statute.<\/p>\n

Notably, the EEOC states that an employer may be responsible under Title VII for its use of AI tools, even if the tools are developed by a third-party software vendor.\u00a0 An employer may also be held responsible for actions taken by software vendors acting on the employer\u2019s behalf.\u00a0 The EEOC recommends that employers weighing the use of AI tools inquire whether the vendor has taken steps \u201cto evaluate whether use of the tool causes a substantially lower selection rate for individuals with a characteristic protected by Title VII,\u201d and if a lower selection rate is expected, to consider \u201cwhether use of the tool is job related and consistent with business necessity.\u201d\u00a0 Further, the EEOC notes that the employer may be liable even if the vendor incorrectly assesses that the tool does not cause a substantially lower selection rate if, in fact, \u201cthe tool does result in either disparate impact discrimination or disparate treatment discrimination.\u201d<\/p>\n

The guidance also discusses use of the commonly-applied \u201cfour-fifths rule\u201d to evaluate selection rates across protected classes.[1]<\/a>\u00a0 In its recently published guidance, the EEOC takes the position that compliance with the four-fifths rule is not always enough to show that a given selection procedure does not violate Title VII, and that as a result, \u201cemployers that are deciding whether to rely on a vendor to develop or administer an algorithmic decision-making tool may want to ask the vendor specifically whether it relied on the four-fifths rule of thumb when determining whether use of the tool might have an adverse impact on the basis of a characteristic protected by Title VII, or whether it relied on a standard such as statistical significance that is often used by courts.\u201d<\/p>\n

Finally, the guidance explains that \u201cif an employer is in the process of developing a selection tool and discovers that use of the tool would have an adverse impact on individuals of a particular sex, race, or other group protected by Title VII, it can take steps to reduce the impact or select a different tool in order to avoid engaging in a practice that violates Title VII.\u201d\u00a0 The EEOC also states that \u201c[f]ailure to adopt a less discriminatory algorithm that was considered during the development process . . . may give rise to liability.\u201d<\/p>\n

Recent Federal Efforts to Regulate AI in the Workplace<\/h3>\n

The guidance represents a continuation of recent efforts by the EEOC and other federal agencies to increase regulation governing the use of AI in the workplace.\u00a0 In 2021, the EEOC announced an initiative to \u201cexamine more closely how existing and developing technologies fundamentally change the ways employment decisions are made.\u201d\u00a0 In May 2022, the EEOC and DOJ released guidance<\/a> addressing disability discrimination issues that may arise when employers use AI and other software tools to make employment decisions.\u00a0 And in April 2023, the EEOC, DOJ, CFPB, and FTC released a joint statement<\/a> on AI, noting the agencies\u2019 shared view that \u201cresponsible innovation\u201d is compatible with \u201cestablished laws.\u201d<\/p>\n


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[1]<\/a> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The EEOC, in its guidance, refers to the four-fifths rule as a \u201crule of thumb,\u201d which represents an understatement of the extent to which the rule has been relied on by the EEOC in the past.\u00a0 The rule is an easily applied test for adverse impact that employers can use in planning employment decisions.\u00a0 As an example, in the context of a decision to reduce headcount and an examination of whether there is an adverse impact against women, the employer would compare the percentage of women in the workplace before the terminations and the percentage of women who would remain if the terminations took place as planned.\u00a0 If the two percentages are within 4\/5 or 80% of each other, the EEOC has said that there likely would not be adverse impact.\u00a0 Thus, for example, if 80% of the workforce were women before the terminations and 75% of the workforce were women afterward, the four-fifths rule would be satisfied, because 75% is 93.75% of 80%.<\/p>\n<\/div>\n<\/div><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

On May 18, 2023, the U.S. Equal Employment Opportunity Commission (\u201cEEOC\u201d) released new \u201cQuestions and Answers\u201d guidance on \u201cAssessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used […]<\/p>\n","protected":false},"author":1,"featured_media":10173,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[5668,1417,2066,349,7659,1118,3798,2476,1418,937,568,913,914],"class_list":["post-10172","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-addressing","tag-artificial","tag-concerns","tag-discrimination","tag-disparate","tag-eeoc","tag-guidance","tag-impact","tag-intelligence","tag-potential","tag-releases","tag-title","tag-vii"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10172","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=10172"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10172\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/10173"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=10172"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=10172"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=10172"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}