As companies increasingly turn to artificial intelligence (AI) to generate important employment documents, HR consultants are warning of the risks involved. AI tools like ChatGPT are being used to create company handbooks, workplace policies, contracts, and more, but the documents often overlook key clauses and crucial issues, leaving employers at serious legal and financial risk. In some cases, AI-generated policies have led to unexpected wage bills, legal disputes, and higher settlement amounts, as seen with examples from California and the UK.
One of the major issues with using AI for creating employment documents is the lack of up-to-date information on constantly evolving labor laws. While AI tools can quickly generate a first draft of these documents, they may not accurately reflect current regulations or incorporate specific requirements for different regions. Additionally, there are privacy concerns related to using AI models like ChatGPT, as confidential company data entered into these tools could be used to train AI models or leaked to the public.
HR consultants like Paul Cortissoz have seen firsthand the negative impact of relying too heavily on AI for company policies. In one case, a remote SaaS company had to redo their bereavement policy after realizing it only offered five days of paid leave instead of the required 10 days in the state where the employee lived. Cortissoz’s firm has been brought in to rectify issues with AI-generated handbooks in multiple instances, highlighting the importance of human oversight in creating these important documents.
While AI is effective for certain HR tasks like writing job descriptions or screening candidates, it is not yet advanced enough to accurately generate company policies. HR experts emphasize the need for thorough review and human input when creating employment documents to avoid legal and financial repercussions down the line. Companies that rush to publish AI-generated policies without proper vetting risk facing serious consequences that could have been avoided with more careful consideration and expertise in the initial drafting process.
As the use of AI in HR continues to grow, HR consultants stress the importance of balancing efficiency with accuracy when it comes to creating company policies. While AI tools can speed up the process of document creation, they should not be relied upon exclusively without human oversight and review. The potential pitfalls of using AI for important employment documents highlight the need for companies to prioritize quality and compliance when it comes to their policies and procedures to avoid costly mistakes and legal issues in the future.
