What Employers Should Include in an AI Policy

Many business have already implemented AI into their everyday workflow. Whether that’s drafting documents, analyzing information, or communicating with customers, it’s important to have a well-designed policy regarding AI usage in the workplace.



When used appropriately, AI can help employees perform certain tasks more efficiently, make information easier to access, and allow them to devote more time to work requiring judgment, creativity, or personal interaction.

What Are the Risks of Using AI?

Inaccurate Information

AI systems can produce information that is incomplete, misleading, or even entirely made up. Therefore, it’s use should be treated as a draft or analytical aid, not as a reliable source. Whoever is using the tool must check its output against authoritative sources before relying on or sharing it.

Confidentiality and Privacy

Employees may unintentionally disclose confidential information by pasting documents, customer data, personnel information, trade secrets, or internal communications into an AI platform. Before approving an AI tool for the workplace, it’s important to understand the tool’s data-retention practices, security controls, contractual protections, and use of submitted information. It’s also important to establish what kind of information may never be submitted to an AI tool.

Discrimination in Employment Decisions

AI can create or amplify discrimination when it’s used to screen applicants, rank employees, evaluate performance, or make other employment-related decision. Existing employment laws still apply, even when an employer is using an automated system. Employers should not assume that purchasing a tool from an outside vendor transfers discriminatory results to the vendor. If you want to learn more about AI usage in hiring, check out our YouTube video.

Understanding these risks can help employers determine what their AI policies should permit, prohibit, and subject to additional review.

What Does a Good Workplace AI Policy Look Like?

A useful AI policy should be specific enough to guide employees, and it should generally address the following areas:

1. Define the Policy's Scope

The policy should explain what the organization considers AI and identify who and what it covers, from standalone AI chatbots to AI features embedded in software employees already use. It should also identify which tools are approved for business use and how employees must access those tools.

2. Distinguish Between Low and High Risk Use

Not all AI use presents the same risk. A policy might permit low-risk activities, like brainstorming or reformatting non-confidential information, while requiring prior approval for higher-risk uses like customer-facing communication, employment or other consequential decisions, processing confidential information, or operating systems that can take action without human approval.

3. Establish Clear Data Rules

A policy should clearly state what kind of information may not be entered into na AI system without explicit authorization. This could include trade secrets, customer or vendor information, employee personnel records, security credentials, and client communication. Having concrete examples of what not to enter is more helpful than simply saying "avoid confidential information."

4. Require Verification and Human Accountability

Employees should be required to review AI-generated work for accuracy, completeness, bias, appropriateness, and compliance before relying on it or sharing it. Higher-risk outputs may require review by management or another designated person.

5. Provide Training

A policy is unlikely to work if employees don’t understand the technology. Training should include examples of permitted and prohibited use of AI, along with examples of other requirements in the policy.

6. Review the Policy Regularly

AI tools, vendor practices, and legal requirements are constantly changing. Employers should periodically review how AI is being used, whether approved systems are working how they are intended to, and whether their policy is consistent with current operations and laws.

The Bottom Line

Employers do not need to choose between unrestricted AI use and a complete ban. The better approach is to establish risk-based guard rails that permit useful applications, protect sensitive information, require human review, and subject consequential uses to greater scrutiny. The most effective AI policy will reflect the business’s technology, workforce, information, industry, and legal obligations.

If you are business owner or employer looking for help on drafting an AI policy for your workplace, give us a call at (859) 263-7884 or reach out to us through our contact page.