Welcome to Issue #3 of The Compliance Brief. Every Tuesday I break down the HR and labor law updates that actually matter to small businesses — in plain English, no legal jargon.

AI Is Now an HR Compliance Issue — Even for Small Businesses

If your business uses any software to screen resumes, score interviews, rank applicants, or schedule shifts, you may already be subject to AI compliance rules — and most small business owners don't know it.

Colorado, California, Illinois, New York City, and others now have laws requiring employers to disclose when AI plays a role in hiring or workplace decisions. Illinois requires written consent before AI analyzes video interviews. Colorado requires impact assessments and plain-language disclosure.

The biggest risk? Most small businesses didn't buy "AI software" — they bought HR software that quietly includes AI features.

Action step: This week, contact your HR, hiring, or scheduling software vendors and ask directly: does your product use AI to score, rank, or profile candidates or employees? If yes, find out what disclosures your state requires.

1. The Pregnant Workers Fairness Act is being enforced — are you ready?

The PWFA applies to employers with 15+ employees and requires reasonable accommodations for pregnancy-related conditions. Common accommodations include extra breaks, water, seating, or temporary duty changes. The biggest risk for small businesses is not having a written policy or trained manager when a request comes in.

2. DEI policies are under EEOC scrutiny

The EEOC recently warned 500 large employers about DEI policies and is actively reviewing workplace programs. Even small employers should review hiring, promotion, and discipline processes to ensure decisions are documented and based on neutral criteria.

3. Fertility benefits are on the radar

The federal government has proposed expanding fertility benefit coverage requirements. It's not final yet — but if you offer health benefits, watch this space. It may affect how you design your plan in 2027.

✅ Ask your HR and hiring software vendors if they use AI features

✅ Check if your state requires AI disclosure or consent in hiring

✅ Make sure you have a written process for handling pregnancy accommodation requests

✅ Review your hiring and discipline documentation for consistency

The EEOC's Small Business Resource Center is a free one-stop shop for anti-discrimination compliance guidance, training, and technical assistance — designed specifically for employers without big HR teams.

Find it at eeoc.gov — search "small business resource center."

That's it for this week. Short, actionable, no fluff.

If this was useful, forward it to another small business owner who could use it.

See you next Tuesday.

The Compliance Brief thecompliancebriefhq.com

This is for informational purposes only and does not constitute legal advice.