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Impending AI Laws

How to Approach Artificial Intelligence as a Small Business

By: Regina Dyerly, SHRBP, PHR
Partner/ Chief Operations Officer

The rapid evolution of Artificial Intelligence (AI) is transforming industries, offering small to medium-sized businesses (SMBs) unprecedented opportunities for growth and efficiency. As AI technologies become increasingly integral to operations, the conversation around responsible AI governance is becoming more important. A primary example is the European Union’s (EU) “Artificial Intelligence Act.”

The recent approval of the EU AI Act, a comprehensive regulatory framework originating in Europe, extends implications beyond its legislative borders, prompting important considerations for American businesses. The act's distinctive approach to categorizing and regulating AI systems based on risk levels is likely to set a precedent for future laws beyond Europe, potentially influencing global standards and practices.

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In the US, the EU AI Act emerges as a significant development to monitor, as it could signal broader shifts in global AI governance, thereby affecting how businesses worldwide may need to adapt in the future. For SMBs in the US, the EU AI Act can serve as a tool for informed decision-making when transitioning or implementing AI systems, offering the potential for a distinctive competitive advantage.

Overview of the EU AI Act

The EU AI Act introduces a nuanced framework to regulate AI technologies, categorizing them into four distinct risk levels: unacceptable, high, limited, and minimal risk, each subject to varying degrees of regulatory requirements. In the act, there are major implications regarding “Unacceptable” and “High-Risk” systems.

UNACCEPTABLE AI APPLICATIONS

Prohibited

AI systems capable of:

  • Social Scoring (classification based on behavior/socio-economic status/characteristics)

  • Real-time biometric identification and categorization of people (i.e. facial recognition)

  • Behavior Manipulation of People & Vulnerable Groups (i.e. financial scams)

-

HIGH-RISK AI APPLICATIONS

Subject to Stringent Regulations

  • Healthcare and Safety

  • Education (i.e. exam/test scoring)

  • Transportation

  • Employment (i.e. resume sorting)

  • Public Services (i.e. loan approval)

  • Law Enforcement, Legal Interpretation/Application, and Migration

Compliance:

  • Strict risk mitigation systems

  • Use of high-quality data sets

  • Thorough documentation

  • Robust human oversight

  • Transparency, accountability, and ethical alignment

You can learn more about the EU Artificial Intelligence Act here: https://artificialintelligenceact.eu/high-level-summary/


The establishment of a new European AI Office to coordinate compliance and enforcement across the EU marks a significant step toward centralized AI regulation on a global scale. With steep penalties for non-compliance, the Act underscores the EU's commitment to responsible AI development and deployment.

Why Does this Matter to US Employers?

The comprehensive approach of the EU AI Act sets a precedent that could shape future AI governance frameworks globally, including in the US. For American SMBs, staying informed about these developments is crucial, as they may herald broader shifts in AI regulation that could impact global business operations and innovation strategies.

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What SMBs Need to Know

For small and medium-sized businesses (SMBs), especially those incorporating AI technologies in functions such as employment, HR, and other critical operations, it's crucial to stay informed about the evolving landscape of AI-focused legislation. Already, 12 states have enacted laws addressing AI use and accountability, with many others poised to follow. These regulations often scrutinize systems used by SMBs for recruitment, employee management, performance evaluations, and more. Given the rapid advancement of AI technologies and the anticipated surge in related legislation, SMBs need to proactively consider AI-focused strategies. By anticipating legal changes and adapting to AI legislation proactively, SMBs can secure a competitive edge.

Impact on HR and Employment Practices

AI tools used in recruitment and employee management must be transparent, unbiased, and include human oversight. This means SMBs must ensure that their AI-driven processes, from candidate screening to performance evaluations, are designed and implemented in compliance with these principles to avoid the risk of discriminatory outcomes or other ethical pitfalls. Notably, with AI regulations varying by state, it's wise to keep your recruitment staff in place, given the critical need for thorough oversight in managing high-risk AI activities.

Navigating Compliance Challenges

Compliance with the AI Act may require SMBs to review and potentially revamp their existing AI tools and systems. This might involve conducting impact assessments to understand how their use of AI affects individual rights, updating documentation to meet transparency requirements, and implementing more robust data governance practices.

Opportunities for Ethical AI Use

While the regulatory landscape may seem daunting, it also offers an opportunity for SMBs to differentiate themselves through ethical AI use. By embracing responsible AI practices, SMBs can build trust with their customers and employees, enhancing their brand reputation and competitive edge.

Practical Steps for SMBs

To align with the Act's requirements and ensure ethical AI use, SMBs can take several practical steps:

Conduct
AI Audits

Regularly review AI systems to assess compliance with regulatory requirements and ethical standards.
 

Enhance Transparency

Ensure that AI-driven decisions, particularly in HR and employment, are explainable and transparent to all stakeholders.
 

Invest in
Training

Equip your team with the knowledge and skills to implement and oversee ethical AI practices effectively.
 

Continuous Learning

Stay informed about regulatory developments and best practices in AI governance to adapt proactively to the evolving landscape.

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Understanding and adapting to the EU AI Act's requirements will not only help SMBs mitigate risks but also leverage AI technologies responsibly to drive innovation and growth. As the global conversation around AI regulation continues to evolve, staying ahead of these trends will be crucial for SMBs operating in an increasingly interconnected world.

Impending AI Laws: How to Approach AI
HR Insights: Remote Employee Moving States
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QUESTION:

This question comes from the HR Stew podcast. Listen to the full segment below.

I moved states without telling my employer. Could I face consequences for not telling my employer?
I’m a fully remote employee, and up until recently I lived in Florida. I recently bought property in Georgia and moved in, but I haven’t informed my employer about it. I’m also concerned about taxes, as Florida has no income tax, but Georgia does. Could I face consequences for not telling my employer?

Short Answer:

While the employer has the right to choose how they deal with the situation, it is likely they will take some amount of action due to the failure to disclose this information. In addition, the employee may face legal or compliance issues for failing to update their tax information.

Detailed Answer:

The answer that the hosts of the HR Stew Podcast, (Regina Dyerly, SHRBP, PHR, COO @ Vida HR, & Holly Nehls, SHRM-CP, Director, Client Services @ Vida HR) was a resounding “YES! You can get in trouble for moving states without informing your employer!”

​

We have to agree with Regina and Holly, the answer isn’t ‘maybe’, it’s a ‘almost definitely’. Let’s start with the most pressing matter: tax implications. To be clear, Vida HR are not tax experts and so we can’t give any tax advice. On the compliance side, employees need to have any relevant taxes deducted from their paycheck. If you haven’t informed your employer of your move, it’s likely your income tax isn’t being deducted; which could potentially expand into legal issues. Furthermore, you are required to fill out a new W-2 whenever your tax information changes, which puts you out of compliance with that requirement.

​

Moreover, some states require the employer to set up tax accounts, unemployment, etc. By not telling them, you have put them at a risk of being out of compliance, which could cause your employer to incur fees. While it is up to the company how to approach disciplinary action, it seems likely that they would decide to take some amount of action, possibly termination.

​

Vida HR recommends checking your company’s handbook, if they have one. Refusing to give this sort of information may constitute a violation, which would most likely result in disciplinary action. It’s important to note that even if you didn’t explicitly violate a handbook policy, both Florida and Georgia are at-will states. An employer can terminate for cause at any time, at their discretion.

​

Employers, to prevent this sort of issue, we recommend adding language to your handbooks to make it clear what is expected of employees. Consider adding a standards of conduct section with prohibited behaviors, as well as a personal data changes section, that would ask employees to inform the employer of any changes to their W-2 tax status.

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Unlocking the Future of HR with
isolved Predictive People Analytics

In today's fast-paced business environment, where every decision can impact the bottom line, the need for robust, data-driven insights into workforce management has never been more critical.

Vida HR is proud to spotlight the Predictive People Analytics feature in this month, a groundbreaking tool designed to empower organizations with actionable insights and foresight into their human resource management.

The Challenge: 
Navigating the Complexities of Workforce Data

The Solution:
isolved Predictive People Analytics

A common hurdle for many organizations is the sheer volume of people data available—data that, without the right tools, remains underutilized, leading to decision-making that's often more guesswork than science. The consequence? Strategies that fail to meet the mark, impacting not just business outcomes but also the employee experience.

With Predictive People Analytics, you gain access to an advanced analytics suite that offers not just data, but insights that are immediately actionable. This feature is part of the broader isolved People Cloud platform, ensuring a seamless integration of data across all HR functions.

Key Features at a Glance:

Centralized Analytics

View enterprise-grade analytics and insights in one place, offering a comprehensive overview of your workforce's health.

Predictive Guidance & Benchmarks

Set targets and receive recommendations, and compare your organization's metrics against industry standards to stay competitive.

Trend Reports & Predictive Modeling

Generate reports that not only highlight current trends but also allow you to predict future scenarios, ensuring you're always one step ahead.

Enhanced Org Charts

Visualize your organizational structure with detailed, user-friendly org charts. Drill down into teams and individual roles for a clearer understanding of workforce dynamics, aiding in better management and planning.

Intuitive Dashboards

Customizable and user-friendly dashboards provide at-a-glance access to key metrics, making data analysis accessible to all.

Transforming HR Practices

With isolved Predictive People Analytics,
the power of predictive analytics is at your fingertips, allowing for:

Enhanced Employee Retention

Predict turnover rates, identify at-risk employees, and take preemptive action to retain top talent.

Increased DEI&B Efforts

Gain insights into diversity metrics within your organization and identify areas for improvement.

Efficiency & Time Savings

Leverage prebuilt templates and dashboards for quick, real-time decision-making, freeing up valuable time for strategic planning.

Why isolved Predictive People Analytics
is Essential for Your Organization

In an era where understanding and anticipating workforce trends is key to staying ahead, isolved Predictive People Analytics offers a solution that is not just about managing data but turning it into a strategic asset. Whether it's improving employee retention, advancing DEI&B initiatives, or simply saving time on data analysis, isolved equips you with the tools necessary for a thriving, efficient workplace.

For a quick and comprehensive understanding of how isolved Predictive People Analytics can revolutionize your HR practices, be sure to check out our engaging two-and-a-half-minute overview video.

Team of Industrial Engineers

Discover Firsthand the Transformative Power of Predictive Analytics Within Your Organization in this 2 1/2 Minute Video . 

If you are interested in harnessing this powerful feature for your business, please don't hesitate to reach out. Contact us at isolvedFOTM@vidahr.com to explore how we can integrate Predictive People Analytics into your HR toolkit and take your organization's efficiency and strategic planning to the next level.

isolved Feature of the Month: Predictive People Analytics
HR ALERTS! by Vida HR Knowledge Center

​QUICK HR ALERTS TO KEEP YOU UPDATED

Employee Highlight: Ashley Oldham
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EMPLOYEE HIGHLIGHT

EMPLOYEE HIGHLIGHT

EMPLOYEE HIGHLIGHT

Hello, I'm Ashley!

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I have lived in Colorado Springs and surrounding areas all my life. I grew up in the farm life, riding horses, raising chickens, and enjoying that lifestyle.  I love what Colorado has to offer. The weather is one of my favorite things about Colorado, just wait 30 minutes and you will be in another season.
 

My payroll career began in 2008 as a Payroll Clerk for a large Wendy's franchise. Since then, I've gained experience in local government, specializing in digital data and record-keeping, and I've also worked in the ER. Joining Vida HR in September 2023 has filled me with excitement to be part of this team.

In the Predictive Index, I’m characterized as a “Operator.” Operators are cooperative team players, known for being relaxed, informal and responsive, which is very fitting! 

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A little about me:

At home, my husband Alec and I share our space with three beloved fur babies: Buzz, our energetic dog, and Simba and Ari, our two mischievous cats, who bring endless joy to our lives. Whenever the weather permits, you’ll find me outdoors, indulging in my passion for gardening - where I nurture our own vibrant flowers and nourishing vegetables. 
 

In my leisure time, I enjoy horseback riding and raising chickens. I seize every opportunity to try new things, welcoming new experiences with open arms. Our love for travel often leads us to the East Coast, where we delight in soaking up the sun and surf, savoring every moment of beach time, and deep-sea fishing. While back home in Colorado, we cherish serene fishing excursions amid the breathtaking scenery of the Rocky Mountains.

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