The use of Artificial Intelligence (“AI”) in the workplace is no longer a future concept.
We are now seeing AI being used more and more in all aspects of work to streamline operations and improve efficiency. This is becoming increasingly more common, especially in hiring procedures. But, as we know, the use of AI does not come without its risks.
As per the Working for Workers Four Act, 2024 (“Bill 149”), and as we’ve previously discussed, starting January 1, 2026, there are some major changes coming into effect for employers with 25 or more employees who publicly advertise job postings. Among other requirements, employers must include a statement on job postings if AI is used to screen, assess, or select applicants. While AI can be a huge time-saver in hiring procedures, employers should be aware of the legal risks that come along with the use of AI, particularly around discrimination, privacy, and procedural fairness.
Key Takeaways
- New Disclosure Requirements Coming: As of January 1, 2026, under Ontario’s Working for Workers Four Act (Bill 149), employers with 25+ employees must disclose in job postings if AI is used to screen, assess, or select applicants.
- AI Is Not Bias-Free: While marketed as objective, AI hiring tools can unintentionally reinforce systemic discrimination, especially if trained on biased data.
- Legal Liability Still Falls on Employers: Employers remain fully responsible under the Ontario Human Rights Code for discriminatory outcomes caused by AI, even if the decisions are made by automated systems.
- Privacy and Transparency Are Critical: Employers must be transparent about what data AI tools collect, how decisions are made, and whether applicants can request human review.
- Best Practices to Reduce Risk:
- Audit AI tools for bias and discrimination risk
- Ensure human oversight on final decisions
- Train HR teams on AI limitations
- Seek legal guidance before deploying AI in employment decisions
- Bottom Line: AI may improve efficiency, but it doesn’t remove the need for human judgment, legal compliance, and ethical hiring standards.
Use of AI in Hiring
AI-driven tools are more commonly being used to evaluate resumes, score candidates, and even analyze facial expressions or tone of voice during interviews. While these tools often promise to remove human bias, they can also lead to indirect discrimination by replicating or amplifying existing systemic biases embedded in the data it’s trained on. AI is only as smart as what it is being fed.
For example, an AI system trained on past successful hires may disproportionately favour candidates with similar backgrounds, unintentionally disadvantaging women, racialized applicants, or people with disabilities.
Legal Risks
The Ontario Human Rights Code applies to all workplaces, and includes hiring procedures. Employers that rely on AI tools are still fully legally responsible for the outcomes of their hiring and management processes. If an AI tool leads to adverse impacts on protected groups, employers may be liable.
Privacy and Transparency Concerns
AI tools collect and analyze sensitive personal data as it scans or produces results. In a hiring setting, this is often without candidates full knowledge or consent. Hence the changes coming into effect with the Working for Workers Four Act, 2024. Employers using AI for hiring should be transparent about what data is being collected, how it’s being used, whether automated decisions are being made, and whether individuals have a right to explanation or human review. Failure to provide this transparency could lead to privacy complaints and reputational harm.
Practical Steps for Employers
To minimize legal risks, Ontario employers should:
- Audit AI tools: Understand what decisions are being made by algorithms and what biases may be baked into the system.
- Implement human oversight: Ensure that AI decisions are reviewed and that there is a clear process for appeals or challenges.
- Train HR and managers: On the risks of over-reliance on AI and the importance of human judgment.
- Consult legal counsel: Especially before deploying new technologies that affect employment decisions.
AI can be a powerful tool in the workplace, but it is not immune from legal scrutiny, and employers ultimately remain accountable for its consequences. No matter an employer’s hiring methods, they should ensure compliance with human rights and privacy laws.
We frequently advise on hiring procedures and legal compliance and are here to answer any questions you may have. Get in touch for a consultation.
