The EU AI Act Takes Effect This Month—And U.S. Companies Hiring In Europe Need To Comply Or Face Massive Fines
On November 1, 2025, the European Union's AI Act officially began enforcement.
The AI Act regulates "high-risk" AI systems—including AI used in employment decisions like resume screening, interview analysis, and candidate assessment.
If your company uses AI recruiting tools AND hires workers in EU countries, you must comply—even if you're a U.S.-based company.
Non-compliance penalties: fines up to €35 million ($38 million USD) or 7% of global annual revenue, whichever is higher.
Most U.S. companies don't realize they're subject to EU AI Act compliance. If you're using AI recruiting tools and have ANY employees or candidates in EU countries, this affects you.
Here's what the AI Act requires and how to achieve compliance.
What The EU AI Act Regulates
The AI Act classifies AI systems by risk level. Employment-related AI is classified as "high-risk."
High-risk AI systems in recruiting:
- Resume screening algorithms
- AI-powered candidate matching
- Video interview analysis tools
- Personality/cognitive assessments using AI
- Automated interview scheduling with AI decision-making
Requirements for high-risk AI:
- Human oversight (humans must review AI decisions)
- Transparency (candidates must know AI is being used)
- Data governance (training data must be unbiased)
- Accuracy and robustness testing
- Record-keeping and audit trails
- Risk assessments
Non-compliance = massive fines.
Sources:
- EU AI Act official text
- SHRM: AI Act compliance for U.S. employers
- EU Commission AI Act guidance
- Legal analysis from employment law firms
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