AI Systems in Employment Law in Germany
The use of artificial intelligence (AI) is rapidly changing the world of work and opening up new opportunities for companies, particularly in human resources and organizational processes. AI can take on a variety of repetitive and time-consuming tasks:
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Automated pre-selection of applications
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Management of working hours and absences
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Creation of precise and flexible shift schedules
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Performance management
This relieves employees of specific tasks and allows resources to be used more efficiently.
AI supports strategic HR decisions
AI offers considerable advantages, especially when it comes to analyzing and evaluating large amounts of data. Performance values, qualifications and development potential can be comprehensively and systematically recorded in order to make well-founded strategic HR decisions and tailor individual support measures. This not only supports the professional and personal development of employees, but also strengthens motivation, loyalty and willingness to perform.
In the HR sector in particular, this technology opens up the opportunity to make processes not only faster but also of higher quality. Decisions can be data-based, more consistent and less subjective – provided that the systems used work correctly and without discrimination. Companies that strategically rely on AI not only increase their competitiveness but also lay the foundation for a sustainable and modern human resources policy.
What are the employment law challenges and obligations associated with the use of AI in Germany?
However, these opportunities also come with mandatory legal requirements in Germany. With the AI Regulation (EU AI Act, Regulation 2024/1689), the European Union has created a binding legal framework that will gradually come into effect by 2027. This regulation divides AI systems into different risk classes. Systems used in human resources – for example, for applicant selection, shift planning, performance evaluation or decision support for salaries and promotions – are often considered high-risk AI. These are subject to particularly strict requirements, including documentation, monitoring, transparency and technical security.
Data protection-compliant use of AI systems in accordance with the GDPR
In addition, the use of AI in companies affects a number of existing employment law regulations in Germany: According to the GDPR (General Data Protection Regulation), all processing of personal data – which generally applies to almost all HR AI – must be lawful, purpose-specific, transparent, and secure. This includes the obligation to inform affected employees clearly and comprehensively when an AI system uses their data or influences their work. It must also be disclosed which data is being processed, for what purpose, and what effects can be expected.
Prohibition of discrimination under the German General Equal Treatment Act (AGG)
Another key issue in employment law is protection against discrimination. AI can unconsciously adopt biases from the training data and perpetuate them in decisions, for example in recruiting, promotions or performance-based payments. This can lead to unlawful discrimination under the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG) and result in liability consequences for the company. Regular reviews, audits and technical and organizational measures are therefore necessary to ensure fair and non-discriminatory functioning.
Liability issues when using AI systems in employment law
With the increasing integration of AI systems into everyday working life, companies are faced with a key question: Who is liable if the AI makes mistakes?
The legal situation is complex in German employment law and under current EU regulatory authority, as specific legal requirements for AI liability have only existed in isolated cases to date. In everyday practice, the general liability rules under the German Civil Code (BGB) and the Product Liability Act apply, with a few practical exceptions. It is therefore essential that companies clearly regulate who is responsible in such cases and ensure that AI-supported results are always subject to human review. Training for employees who work with such systems is also required by law and indispensable in practice in order to avoid wrong decisions and legal violations.
Principles: Who is liable when using AI?
- Responsibility lies with the user (according to the EU AI Regulation, the operator) or the company.
AI systems do not have legal personality and therefore cannot be held liable themselves. The company that uses AI in a work context and utilizes its results always remains the primary liable party. For example, if a faulty AI automatically discriminates against applicants or creates incorrect duty rosters. - Liability of employees
Employees who work with AI systems in the course of their work and cause damage in the process are subject to the principle of internal compensation for damages. They are only liable in cases of gross negligence or intent, for example if they accept obviously faulty AI results without checking them and damage results from this. In cases of slight negligence, the employer is liable. - Manufacturer and developer liability
Manufacturers are primarily liable under product liability law if the AI provided is defective or contains faulty safety mechanisms. The new EU Product Liability Directive explicitly includes AI systems as software products, meaning that software manufacturers can be held liable for damage resulting from product defects, such as failure to provide updates.
What are the typical liability risks associated with the use of AI in the context of human resources?
- Incorrect personnel decisions due to faulty AI
Automated applicant selection leads to discriminatory results because the AI algorithms are based on faulty training data. The company concerned is liable under German employment law for the damage incurred (compensation for pain and suffering, claims under General Equal Treatment Act).
Practical tip: It is recommended that AI suggestions be reviewed by humans and regularly monitored for discriminatory structures. - Damage caused by incorrect use of AI by employees
An employee blindly accepts a shift schedule created by AI that systematically falls short of rest periods and thus violates the Working Hours Act. If this leads to accidents at work or health problems, liability may arise. The company is particularly liable if employees were not given sufficient control options or training.
- Violation of trade secrets and data protection
Employees enter sensitive data into a cloud-based AI platform that is accessible to third parties. If data leaks or unauthorized use occur, the company is liable for data protection violations and, if applicable, economic damage. Employees may also be liable in cases of gross negligence (e.g. deliberate circumvention of internal guidelines). - Defective AI software/service
If a faulty internal HR AI triggers incorrect termination decisions or payroll calculations, both the employer as the operator and – within the scope of product liability – the software manufacturer are liable for any resulting damages.
Legally compliant AI use pays off
AI systems offer enormous potential for increasing efficiency, improving quality and strategic personnel development, especially in the area of human resources. At the same time, they present companies with complex legal challenges. With forward-looking planning, transparent communication and consistent compliance with legal requirements, the technology can be used not only in a legally compliant manner, but also to the benefit of all parties involved, resulting in greater efficiency, fairness, and sustainability.
What we can do for you in terms of AI in employment law
Anyone who wants to take advantage of the benefits and opportunities offered by AI should plan its use carefully and take all legal requirements into account from the outset. As a law firm, we provide you with comprehensive support in this regard. From strategic consulting to legally compliant implementation:
- Development and review of AI strategies in the areas of employment and human resources
- Drafting and negotiation of works agreements, in particular framework agreements on AI
- Review of existing works agreements on the use of AI systems
- Employment law review of planned or already implemented AI systems
- Advice on the implementation of the AI EU Regulation and compliance with the GDPR
Your attorney for AI in German employment law
If you have any questions regarding employment law relating to the use of AI systems in your company or would like support in the legally compliant drafting and negotiation of works agreements, please do not hesitate to contact us. We are here to assist you with our expertise in an advisory and creative capacity.
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FAQ about AI in employment law
Which AI applications are particularly common in human resources?
Automated applicant pre-selection, management of working hours and absences, creation of shift schedules and performance management are among the most common areas of AI application.
Do smaller AI tools such as ChatGPT also need to be legally reviewed?
Yes, as soon as personal data is processed or work processes are affected. Even simple AI tools can trigger data protection and liability risks.
What information obligations do employers have when using AI?
Employees must be clearly informed about what data is being processed, for what purpose and what effects can be expected.
What is bias in AI systems and why is it problematic?
Bias refers to unconscious prejudices from training data that can lead to discriminatory decisions, for example in job applications or promotions.
When can employees be held liable for AI errors?
Only in cases of gross negligence or intent, such as when obviously incorrect AI results are accepted without being checked. In cases of slight negligence, the employer is liable.
What are some specific examples of AI liability risks in HR?
Discriminatory applicant selection, shift schedules that violate working time laws, data leaks due to cloud-based AI and incorrect payroll accounting.
