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What legal and bias challenges have emerged around AI scoring tools in recruiting?
Multiple U.S. jurisdictions — including New York State and Illinois — have passed laws requiring companies to prove that their AI scoring and inference tools used in hiring are not biased. Two active lawsuits, one against Stateful and one against Workday, are directly challenging these systems. The question of whether AI recruiting tools systematically discriminate remains largely unresolved across the industry.
States Moved First — and Put the Burden of Proof on Employers
Rather than waiting for federal regulation, individual states acted. New York State and Illinois both enacted legislation requiring organizations deploying AI scoring or inference technology in hiring to demonstrate that those systems are not biased. The burden is on the employer — and, by extension, the vendor — to prove compliance.
This is a significant shift. Before these laws, companies could deploy AI screening tools with little obligation to audit for disparate impact. As Josh Bersin details in this episode of The Josh Bersin Company podcast, the legislative pressure is real and already in force — not a future risk.
Stateful and Workday: Two Lawsuits That Could Define the Entire Sector
Two active lawsuits are now testing whether AI-based candidate scoring constitutes illegal discrimination. One targets Stateful, a company whose systems evaluate candidates based on inferred signals. The other targets Workday, one of the most widely deployed HR platforms in the world — meaning a ruling against Workday could have industry-wide consequences.
Neither case has been resolved. As Bersin discusses in The Josh Bersin Company, the outcome of these suits will likely shape how AI scoring is regulated for years. Vendors like HireVue, Eightfold, and HiredScore — all of which use AI to evaluate or rank candidates — are watching closely.
The core legal question is consistent across both cases: does an algorithmic system that produces ranked scores or pass/fail decisions introduce bias along protected characteristics like race, gender, or age? That question, as of now, has no settled legal answer.
"We have AI creating resumes and producing and sending them out and AI consuming them — slop talking to slop — and the recruiters constantly tell us they're getting so flooded with fraudulent resumes that they really can't sort through it all."
Josh Bersin — Global Industry Analyst & CEO, The Josh Bersin Company. Bersin has spent decades benchmarking HR technology and talent acquisition practices. This observation, drawn from direct conversations with recruiting leaders, illustrates how AI-generated input compounds the bias problem: when the data fed into scoring systems is itself distorted, the outputs become even harder to audit or trust.
This dynamic matters for the bias debate. A study by computer scientists examining hundreds of resumes found that AI recruiting tools using ChatGPT are 50 to 75% more likely to accept resumes also written with ChatGPT, compared to those written by hand or with Claude or Gemini. If AI scoring systems are already skewed by the format of the input, auditing for demographic bias becomes significantly more complex — a point Bersin raises in this podcast episode.
The bias challenge is not purely theoretical. With 20 to 30% of Americans changing jobs every year, AI recruiting tools operate at enormous scale. Even a small systematic bias baked into a scoring algorithm can affect millions of candidates annually — which is precisely why regulators and plaintiffs' attorneys are paying attention. The full scope of that context is unpacked in The Josh Bersin Company podcast.
See also
What was Eightfold's pioneering contribution to AI-powered recruiting?
Eightfold was a pioneering company that scraped profiles of individuals from across the internet, anonymized them, and used AI to study skills and technical capabilities — laying early groundwork for AI-driven talent matching at scale.
How did AI first enter the recruiting space before large language models existed?
AI in recruiting started in the era of job boards like monster.com and CareerBuilder, which moved job advertising from print to online. Applicant tracking systems then automated resume screening and candidate management long before LLMs arrived.
How large and costly is the recruiting industry in the United States?
20 to 30% of Americans change jobs every year, even during the worst recessions, making talent acquisition a massive and ongoing industry. The cost of hiring one person can range from a few hundred dollars to well over $10,000 for highly-skilled roles.
Key takeaways
- New York State and Illinois have enacted laws requiring employers to prove their AI hiring tools are free of bias — the burden of proof sits with the company, not the regulator.
- Two active lawsuits — against Stateful and Workday — are the first major legal tests of whether AI scoring systems constitute discriminatory hiring practices.
- Neither case has been resolved, meaning the entire AI recruiting industry is operating in an unresolved legal landscape.
- AI-generated resumes being scored by AI systems add a layer of input distortion that makes bias auditing even harder to perform reliably.
This answer comes from a full episode of The Josh Bersin Company podcast — covering AI recruiting tools, legal exposure, and what HR leaders need to know right now.
Listen to the episode on Listenly