Employment Liability Arising from Technology

January 5th, 2022

Which aspect of human resources is more apt to create legal liability? The human, or the resources?

Ninety-five percent of the time it is the irrational conduct of human beings, often front-line supervisors, which create employment liability for employers. In 2022, employers would be wise to revisit how they use their technological resources before concluding that they are safe from employment liability.

1. BIPA Liability Remains the No. 1 Legal Exposure to Illinois Employers.

Aside from Illinois' challenging worker's compensation environment, its Biometric Information Privacy Act (Act) (740 ILCS 14/1 et seq. (West 2018) remains one of the most anti-competitive pieces of legislation passed by the Illinois legislature in this century.

Before the winter holiday, the First District Court of Appeals, which manages all appeals arising from the Cook County Circuit Courts analyzed the five-year statute of limitations under BIPA. Specifically, it analyzed when BIPA liability accrues. Does it accrue on an employer's first violation of BIPA or its last violation?

The court held in Watson v. Legacy Healthcare Financial Services, LLC, 2021 IL App (1st) 210279 that the five-year statute of limitations does not begin to run at the first violation of BIPA, but rather, it accrues at the last violation of BIPA. This means that an employer that inadvertently begins violating BIPA in 2012 through time-keeping technology or employee authentication technology, up and through 2018, might still be liable under BIPA's five-year limitations period because the most recent violations occurred in 2018.

Admittedly, the court of appeals decision appears correct on its face. The court's review of the statutory language was principled and thorough. Indeed, the defendant employer in Watson was reduced to arguing that any other holding would result in ruinous damages to it and the court had no patience for that equitable argument.

The important takeaway is this: be aware that your business has legal obligations under BIPA if you use your employee's biometric information for time-keeping purposes or any other purpose. Be aware that BIPA's five-year statute of limitations may not insulate your business if it commits a continuing violation.

2. Additional Regulation of Technological Hiring Tools Will Come to Illinois from California and New York.

In August 2019 Illinois passed the Artificial Intelligence Video Interview Act. The Act is only four paragraphs long and it creates no remedy for its violation. Under the Act, an affirmative duty is placed on employers who use artificial intelligence to screen video interviews of job applicants. Employers’ duties are as follows:

  • Employers are required to notify each applicant before their video interview that artificial intelligence may be used to analyze the applicant.
  • Employers are required to explain to applicants how their artificial intelligence works and what typical characteristics it uses.
  • Employers are required to obtain consent from an applicant before they use artificial intelligence.

This act is presently "toothless." But that situation cannot last forever. Meanwhile, New York City ended 2021 by regulating the use of "automated employment decision tools" in hiring and promotion decisions. The New York City local law requires that:

  • A bias audit be conducted on an automated employment decision tool prior to its use.
  • Candidates or employees that live in New York City must be notified about the use of automated tools in their assessment or evaluation for hire.
  • Candidates or employees must also be notified about the job qualifications and characteristics that will be used by the automated decision tool.

Civil penalties under this law are modest at not less than $500 per violation and not more than $1,500.00 for each subsequent violation. However, each day on which an automated employment decision tool is used in violation of this new ordinance gives rise to a separate violation. At present, only New York City's corporate counsel is authorized to initiate an action under this local law which takes effect on January 1, 2023.

Employer Takeaways

Illinois employers that use automated technology of any kind with respect to hiring, firing, promotions or wage and hour time-keeping functions must be aware that this a regulated space. Illinois already has the most aggressive and anti-competitive biometric statute in the country. It does not take a leap of imagination to conclude that regulation from either California or New York will make its way to Illinois like what New York City has passed.

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