The EU is tightening AI rules in HR under the AI Act, classifying certain systems as high risk with new duties taking effect in August 2026 and full compliance required for high‑risk tools by December 2027, alongside GDPR Article 22 mandating human oversight for fully automated decisions like dismissals.

AI is reshaping salary dynamics, with simulations from the University of Bielefeld suggesting online platform learning algorithms can foster collusion-like low wages, while in the United States 78% of companies already use AI to assist salary decisions.

The legal profession remains divided on AI use: some firms avoid AI in client work due to liability concerns, while others adopt it early in training, and startups such as LegesAI are building human‑in‑the‑loop and privacy‑preserving AI infrastructures.

German courts are clarifying that read receipts do not guarantee legal receipt of job applications, and the Federal Labour Court will hear an appeal on this issue in March 2027, highlighting ongoing national legal scrutiny.

There is tension over worker representation: the federal government seeks to limit works council veto rights over IT systems to speed AI rollouts, while Berlin aims to raise ongoing education participation to 65% by 2030 to manage shifting task profiles rather than rely on mass layoffs.

Litigation and regulatory pushback are spreading beyond the EU: in the US, Erin Kistler sues Eightfold AI over transparency and appeal mechanisms in candidate scoring, while Meta faces criticism over AI‑driven terminations tied to parental leave or illness, and IBM faces age‑discrimination claims linked to AI tools.

Automation adoption remains high: the Institute for Employment Research estimates 86% of HR tasks could be automated, with 35% of companies already using AI in recruitment and another 26% planning to, and workers reporting significant time savings of about eight hours per week for roughly two‑thirds of respondents.

Regulators have already banned emotion recognition at work since early 2025, and new requirements add transparency, risk assessments, and human‑in‑the‑loop obligations for AI used in hiring, pay reviews, and terminations.