You need top candidates wherever you can find them. You also need to safeguard the business against legal risks. With changing regulations across multiple states and jurisdictions, it can feel like quite the balancing act.
Fortunately, you don’t have to walk the tightrope alone.
We asked a series of experts which recruitment compliance trends are on their radar for 2024. In this article, we’ll explore their top predictions to help you stay on the right side of the law this year.
Quick Disclaimer: As always, the information provided here is not legal advice. Always consult a trained legal professional with any questions related to your recruitment and hiring practices.
Recruitment compliance trends 2024
- AI and bias control
- Job advertising and jurisdictional confusion
- Less small talk in interviews
- Pay transparency becomes the rule
- Drug test policies make room for legalized marijuana
1. Artificial intelligence and bias control
Let’s begin with what is quite possibly the biggest black box for recruitment compliance in 2024 — you guessed it: Artificial Intelligence (AI).
Research shows that 70% of companies already use AI-enhanced systems to identify and hire talent.
The question moving forward isn’t whether or not to use AI when hiring. It’s how to use it in a way that reduces bias — instead of amplifying it.
“More and more recruiting agencies now use AI technologies to weed out resumes, and this trend is likely to continue in 2024. This could be a compliance issue, as these systems are known to inadvertently introduce discriminatory bias when the resume mentions a female's name or a foreign country," explains Nathan Brunner, CEO of Salarship, a job board specializing in low-competition and under-marketed roles.
Nathan believes the onus is on employers to stay up to date and exercise control over these systems.
“A good first approach would be to ensure that resumes don't reference (explicitly or implicitly) any names, genders, countries, or ethnicities before analyzing them with AI systems,” he explains.
Ben Michael, attorney at Michael & Associates, is also wary. “Technology is being implemented into hiring processes more than ever before and will continue to be used more frequently. It's important for businesses to be aware of biases or any discriminatory practices that might be present in their AI-driven technology as they implement these tools,” he says.
Even mega employers like Amazon have fallen victim to biased AI. Back in 2018, the e-commerce giant trained its recruitment algorithm using resumes submitted over the course of a decade. The problem?
Since the majority of Amazon’s past hires were male, the algorithm flagged gender as a key candidate success factor. And thanks to the human bias present in Amazon’s data and training material, the AI got stuck in a pattern of sexism.
According to experts like Phil Mcparlane, founder and CEO of 4DayWeekJobs, cautionary tales like this one are precisely why explainable AI (XAI) is a key trend to watch.
“Currently, many algorithms used for resume screening and candidate matching operate as black boxes, making it difficult to understand how they arrive at their decisions. This lack of transparency can raise concerns about bias and discrimination, especially when seemingly qualified candidates are inexplicably rejected,” explains Phil.
So how can XAI help? “By identifying the key factors that influence candidate rankings, organizations can ensure fairness and compliance with anti-discrimination laws,” Phil explains. “Additionally, XAI can help to identify and address potential biases within the data used to train the models, further reducing the risk of discriminatory outcomes.”
- Use blind hiring tools in your candidate selection process. Level the playing field for job applicants by using AI to remove gender, age, and ethnicity from applicant profiles at the first stage of the hiring process.
- Pay attention to the data your algorithms are trained on. Conduct a bias audit of your training data to ensure no group is under- or over-represented. Look to see where the tool might be perpetuating existing inequities and widen your data pool if needed.
2. Job advertising and jurisdictional confusion
As remote jobs continue to cross state (and even continental) lines, compliance laws are becoming more complex.
If you hire from a decentralized pool of talent, here’s what to know:
“Right now, a lot of employers are out of touch with the recent laws that have been popping up around job advertising and recruiting because they are mostly state or local laws. The catch is with most, if your ad even has the potential of reaching someone in a covered locality, you will be in violation if you are not compliant,” explains Joe Campagna, president of recruitment consulting firm HR Consulting.com.
Which local laws are the ones to watch? There are a few key players, but New York is a leading example. As of last fall, any job performed in the state, even if only for one day per month, must be advertised with the pay rate.
“That means if you are hiring for a remote position, if NY is remote to you, you should be including the rate. Otherwise, you are out of compliance,” explains Joe.
Of course, that’s just one jurisdiction. Due to the increase in remote work, many companies have found themselves managing a globally distributed workforce and attempting to ensure compliance. And according to Tobias Liebsch, co-founder of mergers and analytics consulting firm Fintalent.io, these businesses need to familiarize themselves with international requirements.
“Companies will need to adeptly handle diverse international laws and regulations, including immigration, taxes, and labor standards, when hiring employees from different countries,” he explains.
- Know the laws for your jurisdiction. Whether you are based in or recruiting from a state with pay transparency laws, take time to familiarize yourself with the latest labor law requirements. What information are you required to disclose in your job ads? Is it just wage rates and salary ranges, or benefits and bonuses too?
- Study up before hiring in new markets. Expanding beyond borders is an exciting way to grow your team. But before you go global, get to know the hiring regulations for each new market to make sure you’re able to remain compliant.
3. Greater care (and less personal banter) in interviews
From evolving regulations to undercover bias, hiring managers must remain extra vigilant this year — including during the interview process.
“Recruiters need to be very careful about their personal banter in interviews and in any contact with candidates,” warns Joe of HR Consulting.
For example, say a candidate has to reschedule due to a death in the family. In the course of offering condolences, the recruiter discovers the deceased family member had diabetes. If the candidate is not hired, they could claim that the company didn’t hire them because it didn’t want the cost of adding someone with a family history of diabetes to its healthcare plan.
“It is becoming very difficult to navigate small talk in the hiring process because of what it can reveal. That goes just as easily for gender identity, sexual orientation, religion, etc.,” explains Joe.
According to federal laws like the Genetic Information Nondiscrimination Act (GINA), learning personal data about an employee can result in a discrimination charge if they are not hired.
Bottom line? Don’t ask questions you shouldn’t know the answer to. Instead, save the socializing for onboarding.
- Don’t ask personal questions during the interview process. Even seemingly innocuous conversations can launch you into uncharted territory. Refrain from personal banter, especially if it involves family, health, religion, gender identity, or sexual orientation.
- Train interviewers on best practices. Train your interviewers on best practices so that everyone knows what uncomfortable or illegal questions could look like. You can even create a structured interview guide to ensure that all candidates are asked the same questions.
4. Pay transparency as the rule
Pay transparency isn’t just a priority for candidates. It’s quickly becoming a key imperative for regulators too.
“Pay transparency laws have swept the nation, with many states mandating employers to share salary ranges on all job postings,” says Robert Kaskel, Chief People Officer at background screening platform Checkr.
But just because there are new rules in place, doesn’t mean every employer is being totally above board.
“Some employers are still trying to ‘play the game’ by creating broad ranges with $100,000+ between the highest and lowest salaries, which allows them to continue being vague. Others may even use these ranges to argue against employees who seek raises because if they raise the range for one, they must raise it for anyone in a similar position,” Robert explains.
Not exactly a great move for your employer brand. The good news is, there is plenty to be gained for the employers that take compliance with pay transparency laws seriously.
“The forward-thinking companies that avoid these cheap tactics are reaping many benefits,” says Robert. “Employers following the laws to the best of their abilities are seeing positive benefits, as research shows these disclosures improve candidate quality, narrow wage gaps, and often improve employee retention.”
In addition to publishing accurate salary ranges in your job ads, take extra care not to pry into a candidate’s pay history.
“Salary history is another no-no,” explains HR Consulting’s Joe Campagna. “Many states are now making it illegal to ask the prior salaries of applicants. Not until a person is conditionally offered a job can the employer even ask what they made in prior positions. And then, if the salary was higher or lower than the employer expected or offered, they cannot change their offer or let the history data affect the new employee's job.”
- Regularly review and update your employee compensation framework. Show employees they’re valued by regularly reviewing and updating your employee comp strategy to reflect evolving industry averages and worker performance. And don’t forget to stay competitive with desirable benefits and bonuses.
- Always include salary ranges in your job ads. Build trust by including honest salary ranges in all job postings. From narrowing the gender pay gap to attracting better applicants, the benefits are far-reaching for both employers and candidates.
5. A shift in drug test policies
As legal marijuana becomes more common, many employers are loosening their drug test policies — including the federal government.
As you might’ve guessed, one state in particular is leading the charge.
"California is leading the way in banning the use of drug tests in pre-employment screening, at least as they relate to marijuana,” explains John Ross, CEO of online education company Test Prep Insight.
“Starting January 1, 2024, California AB 2188 prohibits employers from disqualifying applicants for jobs based on drug test results if they test positive for marijuana. This is a huge deal, and HR pros need to take note. California is the country's most populous state, and other states are likely to be quick to follow its lead,” John says.
Even if you operate in a highly regulated industry, like healthcare or heavy equipment operation, you can no longer test employees for marijuana use during the recruitment process in the state of California.
But California isn’t the only place marijuana is legal, and shifting state laws can be difficult to track. Depending on where you’re hiring, some experts believe it may be better to skip the marijuana screening altogether.
“If you are hiring in a state where marijuana is legal, that drug should not even be on the testing panel. Make sure your clinic takes it off the screening test,” Joe advises.
- Consider whether drug tests are necessary for your field. Drug tests are expensive. The labor market is tight. And 9% of employers worldwide are eliminating drug tests to recruit and retain top talent. If you’re not in a safety-sensitive field like construction or healthcare, consider the upsides of a relaxed drug test policy.
- Research the drug laws in your state. Whether you’re based in a state where marijuana is legal or are recruiting remote workers from those jurisdictions, stay on top of the drug laws in each location to remain compliant. Companies with a footprint in multiple states may need to work extra hard to balance concerns over workplace safety, employee experience, and growing legal protections for off-the-clock marijuana use.
A by-the-book recruitment strategy
At Breezy, we know that staying compliant in the face of shifting regulations is no small task. But with a modern talent acquisition strategy, and robust recruitment tools to execute it, it’s easy to keep your process fair and legal.
Focus on regularly reviewing your hiring practices for any processes that could make job seekers uncomfortable. Look out for unnecessary steps that may be adding hurdles to your diversity, equity, and inclusion (DEI) initiatives. And use an applicant tracking system that helps lighten the load.
From GDPR to EEOC, Breezy helps hiring teams stay compliant. Regular internal and external audits, combined with best-practice security processes, can help businesses of all sizes build trust, simplify reporting, and win qualified candidates.