The EU AI Act and Its Impact on Recruitment: What Leaders Need to Know

Although this legal framework isn’t limited to recruitment, in this article we’ll focus on its implications for the Staffing and Recruitment sector only.

Whether you're using an applicant tracking system that automatically ranks candidates, video interview software that analyzes candidate responses, or chatbots that handle initial screenings, your recruitment processes will likely need to adapt.

So here’s what you need to know about the EU AI Act.

What is the EU Artificial Intelligence Act and who initiated it?

The EU AI Act is the equivalent of GDPR for artificial intelligence—a comprehensive framework for trustworthy AI development and deployment. Unlike previous scattered attempts at regulation, this Act provides a unified approach to ensuring AI systems are safe, transparent, and fair.

The EU AI Act's journey began with the European Commission's "AI for Europe" strategy in 2018. The initiative was led by the European Commission, and shaped through extensive consultation with industry experts, civil society organizations, and technical specialists.

The development process brought together three key groups:

• EU leadership: European Commission, European Parliament, and Council,
• Technical expertise: High-Level Expert Group on AI - 52 experts from academia, industry, and civil society,
• External input: Tech companies, civil rights organizations, academic institutions, and international bodies like OECD.

The EU AI Act was formally approved by the European Parliament on March 13, 2024, after several years of development and negotiation.

What makes this Act significant is its practical, evidence-based approach. Rather than creating theoretical rules, the developers drew from real-world use cases and implementation challenges, particularly in high-impact areas like recruitment and HR.

The result is the world's first comprehensive AI regulatory framework that balances innovation with protection of fundamental rights.

Primary objectives of the EU AI Act

As said, the Act seeks to safeguard fundamental rights while fostering innovation in the AI industry. The general objectives of this legislative framework are as follows:

• Ensure trustworthy AI: Create a framework where AI systems are transparent, fair, and accountable. This aligns with the EU's broader vision of "Trustworthy AI" that respects human rights and ethical principles.
• Harmonize AI governance: Establish consistent AI practices across EU member states through:
  • The European AI Office (overseeing high-risk AI systems),
  • The AI Board (coordinating national authorities),
  • Collaboration with Global Partnership on Artificial Intelligence (GPAI) for international alignment.
• Risk management: Implement a tiered, risk-based approach to AI regulation, ensuring proportionate oversight and control.

Regulatory framework

To meet these objectives, the Act establishes three key pillars:

1. AI governance structure - The first pillar establishes a robust governance structure through the new EU AI Office and national oversight authorities, ensuring standardized AI practices across all member states. This creates a unified approach to AI supervision, making compliance clearer for organizations operating across borders.
2. Legal clarity - The second pillar focuses on legal clarity, providing organizations with precise definitions of AI systems and their obligations. This is particularly crucial for recruitment technology providers and users, as it clearly outlines what constitutes high-risk applications in hiring processes and what specific requirements they must meet.
3. Innovation support - Through AI regulatory sandboxes and special provisions for research, the Act creates safe spaces for organizations to develop and test new AI applications. This is especially beneficial for SMEs and startups in the recruitment technology sector, who can innovate while ensuring compliance from the ground up.

The Act's framework particularly impacts recruitment technologies, requiring them to align with principles of fairness and non-discrimination while maintaining efficiency in talent acquisition processes.

Implementation timeline

The implementation follows a structured timeline, with initial provisions taking effect in late 2024, followed by high-risk system requirements in 2025, and full enforcement by 2026-2027.

While this might seem distant, the complexity of these requirements means recruitment teams need to start preparing now, especially if they use AI-powered tools for candidate assessment and selection.

If you're using AI recruitment tools to evaluate EU candidates, operating within the EU, or using tools developed by EU-based providers, you'll need to comply.

Even if you're not directly affected, the Act will likely become the global benchmark for AI regulation, similar to how GDPR (The General Data Protection Regulation) shaped data protection practices worldwide.

Now that you’re familiar with the fundamentals, let’s look at the Act’s content.

Note: This gives the general implementation timeline. Specific dates and enforcement mechanisms may vary. It's essential to stay updated with the latest developments and consult with legal experts to ensure compliance.

Who does the EU AI Act apply to?

The EU AI Act targets various operators in the AI value chain, including providers, deployers, importers, distributors, product manufacturers, and authorized representatives.

Providers

Providers are individuals or organizations that develop an AI system or a general-purpose AI (GPAI) model, or have one developed on their behalf, and market or put it into service under their name or trademark.

• The Act broadly defines an AI system as one that processes inputs autonomously to generate outputs—such as predictions, recommendations, decisions, or content—that can impact physical or digital environments.
• A GPAI is an adaptable AI model capable of handling a wide variety of tasks and integrating with different downstream systems. For example, a foundational model is GPAI, while a chatbot or generative tool built on that model is an AI system.

Deployers

Deployers are people or organizations that use AI systems. For instance, a company using an AI chatbot for customer service is considered a deployer under the Act.

Importers

Importers are individuals or organizations within the EU that bring AI systems developed by entities outside the EU into the EU market.

Understanding the risk-based framework

To ensure a strategic approach to AI regulation, the Act introduces a four-tier classification system that categorizes AI systems by their level of risk: unacceptable, high, limited, and minimal.

Each level outlines specific requirements and obligations, guiding organizations in deploying AI responsibly and in a harmonised manner, based on the potential impact of their systems.

Unacceptable risk - Prohibited

AI applications that pose a serious threat to fundamental rights, safety, or well-being fall under this risk category, and the Act explicitly bans them, unless specific exemptions apply.

Examples include:

1. Manipulative or deceptive AI: Systems that use subliminal or deceptive techniques to impair decision-making or exploit vulnerabilities (e.g., related to age or disability).
2. Biometric categorization for sensitive attributes: Systems inferring traits like race, political views, or sexual orientation, except in limited lawful scenarios.
3. Social scoring: Systems classifying individuals based on behavior or traits that lead to unfavorable treatment.
4. Crime prediction: AI assessing criminal risk based solely on profiling or personality traits.
5. Unauthorized facial recognition databases: Compiling databases from unapproved image sources like internet scraping or CCTV.
6. Emotion detection: Inferring emotions in workplaces or schools, unless for safety or medical reasons.
7. Real-time remote biometric identification (RBI): Using biometric identification systems in public spaces is restricted to law enforcement in emergencies, such as locating missing persons, preventing imminent threats, or identifying suspects in serious crimes. Deployment requires prior rights assessment, EU registration, and judicial authorization, though urgent cases may proceed temporarily without these if authorization is sought shortly after.

Thus, this first category targets AI practices that risk individual privacy, autonomy, and fairness, especially in sensitive contexts like law enforcement and employment.

Impact on recruitment: Although rare in recruitment, any systems using manipulative techniques to influence candidate behavior or decisions could potentially fall here.

High risk

These AI applications pose significant risks to health, safety, or fundamental rights, covering areas such as health, education, recruitment, critical infrastructure, law enforcement, and justice.

They must comply with strict standards for quality, transparency, human oversight, and safety, sometimes requiring a “Fundamental Rights Impact Assessment” before use.

This category includes the use of AI in/for:

• Employment, such as systems for recruiting, evaluating applicants, and making promotion decisions,
• Certain medical devices,
• Education and vocational training, where they influence access or evaluation,
• Judicial and democratic processes, including systems designed to impact election outcomes,
• Determining access to essential private or public services, such as assessing eligibility for public benefits or credit scoring,
• Critical infrastructure management, like water, gas, or electricity supply,
• Biometric identification, except when limited to identity verification, such as using fingerprint recognition to access a banking app.

An exception may apply if an AI system poses no significant risk to health, safety, or individual rights, provided it meets specific criteria (e.g., performing a narrowly defined procedural task).

If relying on an exception, providers must provide technical documentation that justifies that the system is not high-risk, subject to regulatory review.

AI systems that automatically process personal data to evaluate or predict aspects of a person’s life, like preferences or behavior (profiling), are always high-risk.

The EU Commission may also expand the list of high-risk AI applications over time.

Limited risk

AI systems in this category must adhere to transparency obligations, ensuring users are aware they are interacting with an AI and enabling informed decision-making. Examples include applications that generate or manipulate images, sound, or video, such as deepfakes.

For example, when interacting with AI technology like chatbots, users should be made aware that they are communicating with a machine, allowing them to make an informed choice about whether to proceed or disengage.

Additionally, providers must ensure that AI-generated content is clearly identifiable. Text produced by generative AI for public informational purposes must be labeled as artificially generated, a requirement that also extends to audio and video content that includes deepfakes.

Minimal risk

AI applications that carry negligible or no risk to users’ rights and well-being fall under this category. These systems are largely unregulated under the EU AI Act.

Examples include AI systems used in video games or spam filtering, with most AI applications expected to fall here.

Member States cannot impose additional rules due to maximum harmonisation requirements, overriding existing national laws on the design or use of such systems. However, a voluntary code of conduct is recommended.

All right, now let’s look at how this AI act impacts recruitment professionals and the use of AI tools in staffing and recruitment.

Note on Generative AI

Under this Act, generative AI tools like ChatGPT won’t be classified as high-risk but must follow transparency guidelines and comply with EU copyright regulations. Key requirements include:

• Clearly disclosing that content was AI-generated.
• Designing models to prevent the generation of illegal content.
• Publishing summaries of copyrighted data used in training.

For high-impact, general-purpose models—like the advanced GPT-4 model—there will be stricter oversight, including thorough evaluations and mandatory reporting of any serious incidents to the European Commission.

Any content generated or edited with AI assistance—such as images, audio, or video (e.g., deepfakes)—must be clearly labeled as AI-generated, ensuring users know when AI is involved.

Why is the EU AI Act relevant for recruitment leaders?

For recruitment leaders and talent acquisition teams, the EU AI Act has significant and immediate implications. They may need to update their technology to ensure compliance with regulations, especially if using providers of high-risk AI systems.

Consider this:

• If an ATS uses AI to screen resumes and shortlist candidates, it must be designed to avoid bias and discrimination. For example, it should not disproportionately favor candidates from certain demographics or with specific keywords.
• AI-powered video interview platforms that analyze candidates' verbal and nonverbal cues must be designed to avoid bias and ensure fair assessment.
• AI chatbots used for initial candidate screening must be transparent about the use of AI, their limitations, and should not mislead candidates.
• If an AI algorithm is used to score candidates, it must be transparent and explainable. Recruiters should be able to understand how the algorithm arrives at its decisions.
• AI-powered job matching tools should be designed to avoid bias and ensure that candidates are matched to suitable roles based on their skills and experience, not on discriminatory factors.
• AI models used in recruitment should be trained on diverse and representative datasets to avoid bias.
• And most importantly, recruiters should use AI as a tool to support their decision-making, not as a replacement for human judgment, and AI systems should be regularly reviewed and monitored to identify and mitigate potential biases.

For all parties involved, from TA leaders to providers, the stakes are significant. Non-compliance could result in fines of up to €35 million or 7% of global revenue, whichever is higher. Other violations can result in fines of up to 15 million EUR or 3% of an organization’s annual turnover.

But beyond the financial implications, the regulation represents a fundamental shift in how we must approach AI-driven recruitment—emphasizing fairness, transparency, and human oversight.

AI technology providers will have to implement robust systems to identify and mitigate risks throughout the AI system's lifecycle, including post-market monitoring of the AI system's performance and compliance.

Similarly, deployers of high-risk AI tools will need to ensure proper usage, maintain systems logs for a specified period, and conduct fundamental rights impact assessments for AI systems used in essential services.

Implications for non-EU organizations

Now, you might be thinking, "My company isn't based in the EU—does this really affect me?" The short answer is: most likely, yes. The AI Act's reach extends to:

• Companies operating in or serving candidates in the EU,
• Organizations using AI tools developed by EU-based vendors,
• Global companies maintaining consistent hiring practices across regions,
• Businesses competing for talent in markets where EU standards become the de facto benchmark.

Even if your organization doesn't fall directly under the Act's jurisdiction today, its influence will ripple through the entire recruitment technology ecosystem. Vendors are already adapting their products to comply, and these changes will affect users worldwide.

Thus, what you should do sooner rather than later is check if your recruitment systems comply with the EU AI Act, as well as with ISO standards for data security and quality management.