Ontario Municipal Human Resources Association

Municipalities of all sizes are often working to provide important public services within strict budget constraints. Artificial Intelligence or “AI” can help municipalities improve their processes, especially when it comes to recruitment. While municipal workplaces look ahead at how AI can be utilized to create efficiencies, they should also consider how the law is evolving and the impact of new legal changes on their current processes.

Beginning on January 1, 2026, there will be several changes to the Employment Standards Act (ESA) in Ontario based off Bill 149, Working for Workers Four Act. One of the new changes relates to the use of artificial intelligence and an employer’s obligation to disclose the use of AI during the recruitment process. Specifically, employers need a statement in publicly advertised job posting disclosing the use of AI when using AI to screen, assess or select applications.

The ESA also provides the definitions of “artificial intelligence” and “publicly advertised job posting”:

• “Artificial intelligence” as defined in the ESA means a machine-based system that, for explicit or implicit objectives, infers from the input it receives in order to generate outputs such as predictions, content, recommendations or decisions that can influence physical or virtual environments.
• “Publicly advertised job posting” means an external job posting that an employer or a person acting on behalf of an employer advertises to the general public in any manner.

Before making these changes, municipalities should also consider whether the job posting is a “publicly advertised job posting” as defined within the ESA.

Despite the definition of “publicly advertised job posting” appearing to be quite broad, there are some exceptions to the definition. A publicly advertised job posting does not include:

• (a) a general recruitment campaign that does not advertise a specific position,
• (b) a general help wanted sign that does not advertise a specific position,
• (c) a posting for a position that is restricted to existing employees of the employer,

or

• (d) a posting for a position for which work is to be,
  • (i) performed outside Ontario, or
  • (ii) performed outside Ontario and in Ontario and the work performed outside Ontario is not a continuation of work performed in Ontario.

With the law now providing some parameters when it comes to the use of AI, municipalities should also consider the bias inherent in AI and their legal obligations in terms of liability under the Ontario Human Rights Code. The use of AI in the hiring process may increase the risk for municipalities on several Code-protected grounds.

At a high level, bias in AI arises during its programming and training. Factors such as who is creating the AI tool and their own perspectives and position may impact the outcome produced by an AI tool by replicating the same bias. The consequence is that these biased algorithms in AI tools can drive the job selection process incorrectly. An example could be an AI tool which rejects a qualified candidate for a gap in their resume, which may target someone who took time off time for medical reasons. Employers may face legal consequences due to the results of AI tools.

Municipalities can be mindful of how they are using AI by implementing some of the following strategies to address some of the associated risks:

• Training: key decision makers such as human resources and managers should receive training on unconscious bias which involves acknowledging each individual’s own biases and create an atmosphere that is open to feedback
• Human oversight: have an employee who reviews AI tool decisions to ensure qualified candidates are not inadvertently screened out of the initial stage of the hiring process. Use AI tools to supplement existing models and create greater efficiencies, without completely eliminating the human element that is involved in the hiring process.
• Audit AI tools: learn about what the tool has to offer and understand how the tool was created before deciding to use it as part of the recruitment process.

Artificial Intelligence is increasingly becoming a part of our every day lives in the workplace. There are, without a doubt, great benefits to implementing technology and using it to create automated processes which help busy professionals focus on their core tasks. However, municipalities should be mindful of their legal responsibilities and the risks that AI tools may carry. Laws such as the one coming into effect in the new year highlight the importance of understanding how artificial intelligence is being used and creating transparency around this technology.

Written By: Thaniya Jeyachandra