Canada Employment Law Update: AI Disclosure Requirements in Hiring

AI Disclosure Requirements in Canadian Hiring Processes

Canadian employers are facing new challenges as various provinces implement regulations regarding the use of Artificial Intelligence (AI) in job postings and hiring processes. The laws, particularly in Ontario and Quebec, are setting new standards for transparency and accountability in employment practices.

Ontario Regulations

In Ontario, employers who use AI to screen, assess, or select job applicants may be required to disclose this information directly in job postings. This requirement is part of the Working for Workers Four Act, 2024 (Bill 149), which received Royal Assent on March 21, 2024. The regulation, defined in O. Reg. 476/24, will come into effect on January 1, 2026. Key points include:

• Employers with fewer than twenty-five employees are exempt from this requirement.
• The regulation defines AI broadly, potentially including simple keyword filters and complex machine learning systems.
• Disclosure is required for publicly advertised job postings, which are defined as external job postings advertised to the general public.

Quebec Regulations

Quebec has its own set of regulations under the Act to Modernize Legislative Provisions as Regards the Protection of Personal Information (Law 25). Key aspects include:

• Employers must inform individuals if a decision is made exclusively through automated processing (such as AI).
• Individuals have the right to know what personal data was used, the key factors behind an automated decision, and to request corrections.
• Employers must provide mechanisms for human review of AI decisions.
• The Commission d’accès à l’information (CAI) has broad investigative and enforcement powers, including imposing administrative monetary penalties.

National Privacy Laws

Across Canada, privacy laws suggest that individuals should be informed about the purposes for collecting their personal data and require openness about AI use. Employers must comply with laws such as PIPEDA (Personal Information Protection and Electronic Documents Act) federally, and similar laws in Alberta and British Columbia.

Considerations for Employers

1. Human Rights and AI Bias: Employers must ensure their AI tools comply with human rights legislation to avoid unintentional bias in hiring decisions.
2. Transparency: Using explainable AI systems can help detect and correct biases.
3. Regular Audits: Employers should regularly audit AI tools to identify and address any bias.
4. Clear Notices: Provide clear notices explaining how personal information is collected and used.
5. Training: Train hiring personnel on how AI tools function and how to respond to applicant queries.

Best Practices for Responsible AI Use

• Understand AI technology and its compliance with data privacy laws.
• Communicate AI implementation across the organization.
• Revise job posting templates to include AI-use disclosures.
• Implement procedures for human review of AI decisions.
• Maintain up-to-date privacy policies.
• Limit data collection to what is necessary for recruitment.

By embracing transparency and implementing these practices, Canadian employers can not only reduce legal risks but also build trust with candidates and ensure fair hiring processes.