The EU AI Act is a new set of rules that regulates the use of AI in the EU. It is the first of its kind in the world and aims to balance the protection of human rights and the promotion of innovation.

The Act applies to different types of AI depending on the level of risk involved. The Act came into force on August 1, 2024 and does not require any further implementation by the EU member states.

Ban Using Certain AI at the Workplace from February 2, 2025

• The Act bans the use of certain AI that is considered harmful or discriminatory. This includes AI that infers sensitive attributes from biometric data, scores people based on their social behavior or personal traits, or evaluates emotions in workplaces.
• These prohibitions apply from February 2, 2025. Employers must stop using such systems immediately.

Further Obligations Apply from August 2, 2026 or 2027

• The Act also imposes strict obligations on providers and users of high-risk AI systems, such as those that are used for recruitment, promotion, termination, task assignment, or performance evaluation of employees.
• These obligations include transparency, monitoring, training, and reporting requirements, and apply from August 2, 2026 or 2 August 2027, depending on the type of system.
• Employers who use high-risk AI systems must ensure that they comply with these obligations and that they respect their employee’s rights.

New AI Office to Enforce AI Act

• The Act establishes a new AI Office within the EU Commission to oversee the implementation and enforcement of the rules.
• The Act also provides for fines of up to EUR 35 million or 7% of the annual global turnover for serious breaches of the rules, which will apply from 2 August 2025.
• Employers who violate the Act may face legal action and reputational damage – as well as losing the trust and confidence of their employees and customers.

Advice for Employers

The EU AI Act is a landmark legislation that sets the standards for the ethical and responsible use of AI in the EU. Employers who use AI in their operations must be aware of the new rules and their implications, and take the necessary steps to ensure compliance and accountability.

The Act also offers an opportunity for employers to demonstrate their commitment to human-centric and value-based AI, and to foster a culture of innovation and excellence in their organizations.

For further information on the EU AI Act, please also see our The EU AI Act Essentials Series: Key Takeaways for Companies Using and Developing AI.