Digital Developments – AI in Employment

by Marta Zammit

12/06/2024

12/06/2024

July2024

Today, artificial intelligence (‘AI) has the capacity to affect so many aspects of an individual’s life. The workplace is no exception.

While Maltese law had not yet implemented anything to regulate AI use, particularly in relation to the field of employment law, the EU AI Act was published in July 2024 aiming to establish harmonized rules for the development, marketing, and use of AI systems across the EU.

The AI Act is a formal EU Regulation, meaning that it will have direct effect in EU Member States, including Malta. In other words, it is a law applicable in Malta, without the need for it to be transposed under some domestic law.

The AI Act entered into force on August 1, 2024. However, the enforcement of most of its provisions will commence on August 2, 2026, permitting a phased approach which facilitates a gradual implementation of the Act’s requirements.

Some other milestones included the 2nd t 2024, the date by which Member States were to identify and publicly list the authorities responsible for fundamental rights protection under this law. Malta has published 10 authorities as protectors of Fundamental Rights under Article 77 of the AI Act, including the Office of the Information and Data Protection Commissioner, the National Commission for the Promotion of Equality; the Commission for the Rights of Persons with Disability; The Department for Industrial and Employment Relations and JobsPlus Malta. The Malta Digital Innovation Authority (MDIA) and the IDPC have been identified as market surveillance authorities.

On the 2nd February 2025 certain prohibitions on certain AI systems and requirements on AI literacy kick in.

The EU AI Act is described as having the potential to set a universal benchmark, influencing whether AI has a positive or negative impact on one’s everyday life. It sets out prohibitions on specific AI practices, particular requirements and responsibilities for high-risk AI systems and their operators, and enforces standardized transparency rules for certain AI systems.

Additionally, it provides harmonized regulations for the market introduction of general-purpose AI models, outlines rules for market monitoring, surveillance, governance, and enforcement, and introduces measures to foster innovation, especially targeting SMEs and startups.

Amongst various definitions, the AI Act defines an AI system as a machine-based system designed to function with different levels of autonomy and potentially show adaptability after being deployed. This Act categorizes AI applications into three risk levels. Applications posing an unacceptable risk, high-risk applications, and applications not banned or classified as high-risk remain unregulated.

The AI Act specifically identifies AI systems used in employment, such as those for recruitment, performance evaluation, promotion, and termination, as high-risk. It includes several provisions specifically related to the use of AI in employment, mainly related to (i) Transparency and Accountability; (ii) Non-Discrimination and Fairness, (iii) Data Protection and Privacy and (iv) Risk Management and Compliance. Amongst other requirements, human oversight is emphasised: AI systems used in employment must be designed to allow for human oversight and employers must ensure that there are mechanisms in place for human intervention in case the AI system makes an incorrect or biased decision. This reminds us of the obligations on automated decision making under GDPR – as well as the obligation undergo robust Data Protection Impact Assessments when using these types of tools.

More developments on this front are expected in 2025 and beyond, with new codes of practice to be published, and new EU regulations to follow suit.

August 2024

Following up on a high-level policy document published in 2019, in August 2024 Malta’s National AI Strategy was announced, titled “Strategy and Vision for Artificial Intelligence in Malta 2030’”. This policy keeps Workforce Development at the forefront, as a strategic enabler for the 3 pillars proposed by the policy. These are: