Workday must face lawsuit over AI bias in job screening

Workday, a major provider of AI-powered human resources software, must face claims that its tools illegally discriminate against job applicants, a federal judge ruled Monday. U.S. District Judge Rita Lin in San Francisco rejected Workday's argument that California's anti-discrimination laws do not apply to screening conducted outside the state for jobs elsewhere.

The proposed class-action lawsuit, filed in 2023, targets the algorithmic decision-making processes used in AI screening software, which has become widespread among large employers. Judge Lin's decision largely denied Workday's attempt to dismiss recent amendments to the lawsuit, stating that the company could be held liable under state law due to alleged unlawful conduct originating from its California headquarters.

Specifically, the judge allowed claims that Workday's software may screen out applicants based on "proxy indicators" of disabilities or illnesses, such as employment gaps, violating the federal Americans with Disabilities Act. While a claim regarding discrimination against Asian American applicants was dismissed due to procedural issues, plaintiffs also allege discrimination against Black job seekers, women, and older workers.

Experts note that over 80% of U.S. employers, including virtually all Fortune 500 companies, utilize AI hiring tools like Workday's. Government agencies and worker advocates have voiced concerns about potential bias in these tools, stemming from data that reflects existing societal prejudices. However, litigation in this area has been limited, partly due to applicants' lack of awareness about AI usage and the technical complexities involved in such cases.