On Wednesday, March 13, 2024, Members of European Parliament endorsed the Artificial Intelligence Act (“AI Act”), with 523 votes in favor, 46 against, and 49 abstentions. This is the world’s first comprehensive AI law and likely to have significant influence on the rapid development of AI regulation in other jurisdictions including in the United States.

Article 1 of the AI Act explains its purpose:

to improve the functioning of the internal market and promoting the uptake of human centric and trustworthy artificial intelligence, while ensuring a high level of protection of health, safety, fundamental rights enshrined in the Charter, including democracy, rule of law and environmental protection against harmful effects of artificial intelligence systems in the Union and supporting innovation

More specifically, in addition to harmonizing rules for developing, implementing, and using AI, the AI Act aims to (1) protect EU citizens’ fundamental rights, including from certain “high risk” AI; and (2) foster, rather than hinder, technological innovation and Europe’s AI leadership.

The Act categorizes AI into 4 levels of risk: unacceptable risk, high risk, limited risk, and low risk. Based on the risk level, individuals and entities within the scope of the Act, such as providers, deployers, importers, and distributors of AI systems (see “Definitions” in Article 3) are required to meet specific requirements. For example, AI with unacceptable risk is simply banned because it violates basic human and civil rights, manipulates human behaviors, or exploits human vulnerabilities.

Use of AI in employment is considered high-risk AI, categorized as such due to its significant threat to civil rights and the law. For employers, utilizing high-risk AI compliance will require a number of steps including keeping accurate use logs, being transparent about the AI use, maintaining “human oversight”, and other efforts to reduce risks.

Individuals are able to submit complaints about high-risk AI systems and are entitled to explanations about decisions made, such as employment decisions, based on the high-risk AI system.

A goal of the AI Act is “to reduce risks, create opportunities, combat discrimination, and bring transparency. Thanks to Parliament, unacceptable AI practices will be banned in Europe and the rights of workers and citizens will be protected. The AI Office will now be set up to support companies to start complying with the rules before they enter into force. “We ensured that human beings and European values are at the very centre of AI’s development[,]” as stated by Brando Benifei, the Internal Market Committee co-rapporteur of Italy.

What’s next? The AI Act is still subject to a lawyer-linguist verification and must be endorsed by the Council. However, it is expected to be adopted before the end of the legislature and will be entered into force 20 days after it is published in the official Journal. It will be fully applicable two years after its entry into force, with some exceptions.

Jackson Lewis attorneys are closely monitoring the EU AI Act as well as U.S. AI regulation. Additional targeted updates regarding the EU AI Act will be posted as we near the effective date, by attorneys from both Jackson Lewis and the firm-led L&E Global alliance.    


 

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.

Photo of Teri Wilford Wood Teri Wilford Wood

Teri Wilford Wood is of counsel in the New York City office of Jackson Lewis P.C. Her practice focuses on representing employers in global workplace law matters, including preventive advice and counseling.

At Jackson Lewis, Teri focuses primarily on international employment issues, corporate…

Teri Wilford Wood is of counsel in the New York City office of Jackson Lewis P.C. Her practice focuses on representing employers in global workplace law matters, including preventive advice and counseling.

At Jackson Lewis, Teri focuses primarily on international employment issues, corporate governance and investigations, workplace training and restrictive covenants worldwide.