Risk Management » President Biden’s Comprehensive AI Executive Order: Implications for Employers and Industry Standards

President Biden’s Comprehensive AI Executive Order: Implications for Employers and Industry Standards


November 8, 2023

On October 30, 2023, President Biden signed an Executive Order on artificial intelligence (AI), detailed in this Seyfarth Shaw LLP article, that aims to regulate and enforce the use of AI in a way that maintains American leadership in innovation while addressing potential risks. The order covers various aspects of AI and has implications for companies and employers in all industries.

The order emphasizes coordination among civil rights agencies on AI issues, worker protections, and guidance to federal contractors on AI-driven hiring practices. It underscores the government’s internal standards for AI governance and risk management, calling for “required minimum risk-management practices” for AI applications that impact people’s rights or safety.

The security of AI systems has become a major topic, influencing discussions on risk management and safety across various industries, including labor and employment. The executive order directs agencies to tackle issues related to civil rights abuses and discrimination in AI. This aims to foster coordination and training between different federal enforcement agencies.

For employers, the executive order has several implications. Firstly, it emphasizes the need for continued coordination between civil rights agencies to enforce AI regulations and address issues of discrimination in AI applications. Secondly, the government is committed to protecting workers and urges responsible AI development to avoid negative effects on job quality and worker well-being. The order requires reports on the impact of AI on the labor market and principles for employers to mitigate potential negative effects.

Federal contractors using AI have been directed to expect guidance from the Department of Labor regarding nondiscrimination in hiring. This guidance will have an impact on hiring practices across various industries. The government’s approach towards AI risk management, as mandated by the EO, is likely to influence the private sector’s approach towards AI risk management.

The EO highlights NIST’s role in drafting guidelines for AI system development, promoting consensus industry standards, and evaluating risks. This is particularly relevant to employers using AI in HR operations, addressing concerns of unlawful bias and employment discrimination.

Finally, the order introduces the concept of “AI red-teaming,” requiring security testing for potential flaws, vulnerabilities, and discriminatory outputs from AI systems. This expands the focus on AI safety and security practices and urges employers to evaluate testing and validation procedures.

President Biden’s Executive Order on AI encompasses a broad range of measures that affect AI regulation, enforcement, and risk management. The implications for employers extend to issues of discrimination, worker protection, federal contracting, adherence to industry standards, and rigorous security testing of AI systems. Ongoing updates are expected as the government delves deeper into the comprehensive EO.

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