AI in wage decisions: US discusses laws to prevent discrimination and increase transparency

AI in wage decisions: risks and impacts on the labour market

Artificial intelligence (AI) is already a reality in several sectors, but its use in wage decisions has generated heated debates between legislators, companies and ethics experts. In the United States, the House of Representatives and the Senate are evaluating bills aimed at regulating how companies use algorithms to define wages, promotions and benefits. The central concern is to prevent algorithmic biases from perpetuating historical inequalities, such as gender and race pay differences.

According to data from PropertyCasualty360, about 35% of American companies already use some type of AI system to assist in decisions related to remuneration. This number rises to 52% among large corporations** (with more than 10,000 employees), which often adopt more sophisticated solutions, such as machine learning models trained with historical data of hiring and promotion.

The problem, however, is that these systems can replicate — or even broaden — existing discriminations. For example, if an algorithm is trained with historical data reflecting a corporate culture where women receive less than men in similar positions, it will tend to perpetuate that difference. Moreover, the lack of transparency in the criteria used by the models makes it difficult for officials to challenge unfair decisions.

Laws in the USA: How to regulate the use of AI in wages

The proposals under consideration in the US include measures such as:

One of the most discussed projects, the Algorithmic Accountability Act, proposes that companies with more than 500 employees are required to publish annual reports detailing how their AI systems impact employee remuneration. The measure seeks to create an environment of greater supervision and accountability.

Can Brazil adopt similar rules for AI in wages?

While the US is advancing in discussions, Brazil still does not have specific legislation on the use of AI in wage decisions. However, the LGPD (General Data Protection Law) already establishes principles such as transparency and non-discrimination that could be applied to such cases. In addition, the Ministry of Labour and Employment has indicated that it can edit additional standards in the coming years.

The US discussion serves as a warning to Brazilian companies that already use or intend to adopt AI in people management processes. The absence of regulation does not exempt organisations from responsibility: officials dissatisfied with algorithmic decisions can appeal to Justice on the basis of constitutional principles of equality and non-discrimination.

AI in HR: necessary innovation or risk for transparency?

AI has the potential to make people management processes more efficient and objective. For example, algorithms can analyze large volumes of data to identify performance patterns and suggest promotions based on clear metrics. However, the risk of perpetuating inequalities requires companies to adopt a cautious approach.

For experts, the solution goes through three pillars:

Companies that do not adapt to this new reality can face not only legal sanctions, but also damage to their reputation. A study by Harvard Business Review showed that 78% of consumers avoid brands associated with discriminatory practices, even if they are not directly affected.

Rules for AI in wages: transparency and justice are essential

The regulation of the use of AI in wage decisions is not only a matter of compliance, but of social justice. While the US discusses stricter laws, Brazil needs to closely monitor these discussions to prevent algorithmic biases from becoming another barrier to equity in the labour market. Technology must be an ally of progress, not an instrument of perpetuation of inequalities.

For companies, the message is clear: it is time to invest in transparent, auditable and ethical systems. For legislators, the task is to create regulatory frameworks that balance innovation and protection for workers. And for society, it is important to demand that AI be used to build a fairer future — not to reproduce past mistakes.

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Data and biases: how AI affects wage decisions

Use of AI in wage decisions by emp size

Data source: PropertyCasualty360