On Wednesday, March 13, 2024, Members of European Parliament endorsed the Artificial Intelligence Act (“AI Act”), with 523 votes in favor, 46 against, and 49 abstentions. This is the world’s first comprehensive AI law and likely to have significant influence on the rapid development of AI regulation in other jurisdictions including in the United States.

Article 1 of the AI Act explains its purpose:

to improve the functioning of the internal market and promoting the uptake of human centric and trustworthy artificial intelligence, while ensuring a high level of protection of health, safety, fundamental rights enshrined in the Charter, including democracy, rule of law and environmental protection against harmful effects of artificial intelligence systems in the Union and supporting innovation

More specifically, in addition to harmonizing rules for developing, implementing, and using AI, the AI Act aims to (1) protect EU citizens’ fundamental rights, including from certain “high risk” AI; and (2) foster, rather than hinder, technological innovation and Europe’s AI leadership.

The Act categorizes AI into 4 levels of risk: unacceptable risk, high risk, limited risk, and low risk. Based on the risk level, individuals and entities within the scope of the Act, such as providers, deployers, importers, and distributors of AI systems (see “Definitions” in Article 3) are required to meet specific requirements. For example, AI with unacceptable risk is simply banned because it violates basic human and civil rights, manipulates human behaviors, or exploits human vulnerabilities.

Use of AI in employment is considered high-risk AI, categorized as such due to its significant threat to civil rights and the law. For employers, utilizing high-risk AI compliance will require a number of steps including keeping accurate use logs, being transparent about the AI use, maintaining “human oversight”, and other efforts to reduce risks.

Individuals are able to submit complaints about high-risk AI systems and are entitled to explanations about decisions made, such as employment decisions, based on the high-risk AI system.

A goal of the AI Act is “to reduce risks, create opportunities, combat discrimination, and bring transparency. Thanks to Parliament, unacceptable AI practices will be banned in Europe and the rights of workers and citizens will be protected. The AI Office will now be set up to support companies to start complying with the rules before they enter into force. “We ensured that human beings and European values are at the very centre of AI’s development[,]” as stated by Brando Benifei, the Internal Market Committee co-rapporteur of Italy.

What’s next? The AI Act is still subject to a lawyer-linguist verification and must be endorsed by the Council. However, it is expected to be adopted before the end of the legislature and will be entered into force 20 days after it is published in the official Journal. It will be fully applicable two years after its entry into force, with some exceptions.