EEOC guidance addresses algorithmic decision-making tools

The Equal Employment Opportunity Commission last week issued guidance, in the form of questions and answers, that addresses the use of algorithms in making employment-related decisions.

“If use of an algorithmic decision-making tool has an adverse impact on individuals of a particular race, color, religion, sex or national origin,” then use of the tool is unlawful “unless the employer can show that such use is ‘job related and consistent with business necessity,’” according to the EEOC.

The EEOC made clear that, in many cases, an employer is responsible for its use of algorithmic decision-making tools even if the tools are designed or administered by another entity, such as a software vendor.

The commission noted that the process of developing an algorithmic decision-making tool may produce a variety of comparably effective alternative algorithms. The “[f]ailure to adopt a less discriminatory algorithm that was considered during the development process therefore may give rise to liability.”