Victoria is moving to regulate artificial intelligence in hiring, aiming to stop algorithms from discriminating against job applicants. The state government announced this week it will introduce new laws to ensure AI hiring decisions are free from bias or discrimination. The regulations also target intrusive workplace surveillance, giving workers the right to know if they are being monitored. The government plans to require a human to have the final say in any significant automated decision made using surveillance data.
Risks in automated hiring
Business groups and some employment lawyers describe the proposal as unnecessary overreach. Unions, however, view the move as a smart step forward. Bias and discrimination in AI hiring are well-documented. An analysis of 4 million applications screened by algorithms found clear racial discrimination against Black and Asian applicants in the United States. My own research highlights how these systems may exclude women, people with disabilities, and older workers. This exclusion can happen through the data used to train the AI, the algorithm itself, or how an organization deploys the technology.
Existing laws struggle to keep pace. The Victorian Equal Opportunity Act predates the development of AI. It does not currently require employers to make reasonable adjustments for people with disabilities during the hiring process. This creates a gap, especially when third-party AI systems are involved. Determining liability between software developers and employers is complicated. Furthermore, if a hiring manager cannot see inside the AI’s “black box,” it becomes difficult for an individual to gather evidence to file a complaint.
Without clear guardrails, employers may unknowingly deploy systems that systematically disadvantage entire groups of job seekers. This creates a significant barrier to entry for diverse talent pools. The lack of transparency in these tools means that discrimination can occur without anyone realizing it until it is too late. The risk is that a flawed algorithm becomes standard practice across multiple companies, effectively locking out specific demographics from the workforce entirely.
Why clearer rules help employers too
Victorian employers often lack clear regulatory guidance on the specific steps required to prevent discrimination under existing laws. This ambiguity creates uncertainty. When rules are vague, companies may avoid using AI tools altogether, missing out on efficiency gains. Clearer regulations would provide a defined framework for compliance. This allows businesses to confidently implement AI systems knowing they are meeting legal standards. The European Union’s AI Act bans emotion recognition technology in the workplace, a move that Victoria appears to be considering following.
There is also the matter of scientific validity. The use of AI to analyze emotions has been discredited. Research suggests emotion recognition technology may discriminate on the basis of race, gender, and disability. Allowing this in recruitment could expose employers to legal challenges and reputational damage. By prohibiting these intrusive tools, the government protects companies from liability and ensures their hiring processes rely on relevant skills rather than facial expressions or voice tones.
Ensuring a human remains in the hiring process provides a necessary safety net. While eliminating all bias from AI is not technically achievable, a human review can catch errors that a purely automated system might miss. This hybrid approach balances innovation with legal safety. It prevents the “black box” problem from becoming a liability for businesses. Regular independent audits would further help companies identify and fix issues before they result in legal action or negative publicity.
With a recent survey showing that less than a third of Australians view current regulations as sufficient to protect against AI harms, there is a clear mandate for action. The Victorian Equal Opportunity Act should be reviewed to identify and close these gaps. If an employer is unsure whether an AI hiring system encodes discrimination, they should not use it. Empowering and resourcing the Victorian equality regulator to enforce these laws would provide the final layer of protection for both workers and compliant businesses.
Support for first-time parents can mitigate the economic impacts of workplace surveillance. New initiatives support first-time parents by providing resources during early parenthood. This support helps families handle the challenges of balancing work and family life.
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