Artificial intelligence (AI) has been a hot topic in human resources, with regulatory agencies like the Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL) cautioning that AI-driven hiring and HR tools could unintentionally reinforce historical biases. However, a recent Executive Order from President Trump has reversed this stance, creating a significant shift in how AI will be regulated in the workplace.

What Changed?

On January 23, 2025, the White House issued an Executive Order titled “Removing Barriers to American Leadership in Artificial Intelligence”. This directive requires federal agencies to ensure that all AI-related regulations and guidance are “free from ideological bias or engineered social agendas.”

As a result, both the EEOC and DOL have withdrawn their prior guidance regarding AI in hiring and HR management. Previously, these agencies emphasized that AI systems should be designed to prevent discrimination, particularly in hiring assessments, automated resume screening, and performance evaluations.

What This Means for Employers and HR Professionals

This Executive Order introduces uncertainty for HR teams that rely on AI-driven tools for recruitment, payroll management, and performance tracking. Here’s what employers should consider moving forward:

1. No Clear Federal AI Standards for HR

With the withdrawal of prior guidance, there is currently no clear federal compliance framework ensuring that AI systems used in HR processes remain free from discriminatory practices. This means businesses must take extra steps to evaluate the fairness and transparency of their AI tools.

2. Heightened Scrutiny on AI-Driven Hiring Practices

While federal agencies may be pulling back, state and local governments are still actively regulating AI in HR. For example, New York City’s AI hiring law (Local Law 144) requires companies to conduct bias audits on automated hiring tools. Employers should stay updated on state-specific regulations.

3. Increased Employer Responsibility

Without federal oversight, the burden now falls on employers to ensure that their AI-driven tools comply with existing anti-discrimination laws like the Civil Rights Act, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA).

What’s Next?

This is a rapidly evolving area, and more changes could be on the horizon. While the EEOC and DOL have removed previous AI-related guidance, it's unclear if new regulations will be introduced in the future. Employers should stay proactive by:

✅ Reviewing and auditing their AI-driven HR tools
✅ Staying updated on state-level AI regulations
✅ Consulting legal and HR compliance experts to mitigate risk

At CTR Payroll | HR, we help businesses navigate complex HR regulations, including the responsible use of AI in payroll and workforce management. Contact us today to ensure your HR technology aligns with the latest compliance standards.

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