Mitigating Risks of Employees Using AI in the Workplace

Increasing productivity and improving decision-making are two common goals for organisations, and they can be improved through use of artificial intelligence (AI).

What are the benefits of using AI in the workplace?

Embracing AI tools in the workplace can align the wants and needs of employees with those of organisations, by increasing employee autonomy and empowering them to make decisions.

AI can also take over mundane, repetitive tasks, such as data entry or scheduling, and can equip employees with real-time insights and trends, offering data-driven recommendations. This enables employees to make smarter and more confident decisions. By leveraging AI for repetitive tasks, businesses can redirect labour, freeing employees to focus on more creative work, develop their skills and improve their work-life balance. AI can do this by providing companies with tools that boost efficiency, such as intelligent assistants, data analysis software, and collaborative platforms, potentially reducing stress and overtime. It can also reduce operational costs, streamline supply chains, and improve resource allocation. AI can help facilitate personalised customer experiences, paradoxically fostering deeper human connections with stakeholders and boosting engagement and loyalty.

Similarly, cost-saving remains a constant and unpredictable challenge for companies and tends to go hand in hand with retaining talent. Saving costs in one area of a business can lead to better salaries, higher morale, and reduced turnover.

AI is the modern-day industrial revolution, except it is not just about machines replacing tasks, it’s about enhancing human potential and improving the collective experience of work within society.

What are the risks of using AI?

Well managed risk provides the safest opportunity for success. Companies should consider some risks of using AI which are:

• Bias and discrimination: AI systems can inadvertently preserve biases present in their training data, leading to unfair outcomes in hiring, promotions, or decision-making.
• Privacy concerns: Employee and customer personal data, as well as commercially sensitive information might be processed by AI systems, raising questions about data security and proper handling of sensitive information.
• Inaccuracy and errors: AI systems are not infallible and may produce inaccurate results, especially in complex or dynamic environments.
• Security risks: AI systems can be susceptible to cyberattacks or manipulation, potentially compromising sensitive workplace operations.
• IP ownership: Legal frameworks around intellectual property rights (“IPR”) ownership for AI-generated outputs are still evolving, creating uncertainty about who holds the rights. Additionally, generative AI may create content that closely resembles material from its training data, and that is protected by IPR, potentially leading to IPR infringement.

The importance of policies and training

AI is still learning (pun intended) – as are we all. Without effective policies and training in place employee’s morale may be knocked, and company reputation may be damaged, if, for example an employee blindly uses the results of an AI tool, and it turns out to be inaccurate or incorrect.

With appropriate guidelines in place, the benefits of AI in the workplace can be twofold. The risk can be mitigated quite simply by the collective efforts of employees and employers. Guidance and training are essential, and need to be evolving and collaborative, to complement similar traits in the AI systems, and in the individuals using them.

Implement a workplace policy

In order to mitigate the risk around use of AI, it is best practice for companies to put in place a workplace policy to set out the rules around the use of AI in the workplace.

A workplace AI policy could address issues, such as:

• The use of AI in recruitment, appraisal and promotion processes,
• How AI is being used in the company’s own services or products, and
• Liability arising from the use of AI included in contractual arrangements the company has with third parties.

The workplace policy should go hand in hand with other policies the company already has in place such as an IT and communications policy, work devices policy, data protection policy, and diversity, equity, or an inclusion policy.

The policy should try and include a list of permitted and/or prohibited AI applications and guidelines for the use of authorised AI applications, including prohibition of the use of business, customer and personal data, discriminatory or inappropriate language in prompts, as well as guidance in relation to use of the IP rights of third parties, cyber security and the principles of ethical and responsible use in general.

Ensure employees understand the risks

Similarly, training should be provided on the policies, as well as on the use of AI in the workplace generally. For example, training employees on any resulting data from AI, including checking the accuracy of the data relied on, and on any restrictions or limitations on AI’s use.

Companies should only collect the minimum possible information needed to achieve the purpose of the relevant AI tool, and ensure this information is only process for that limited purpose and is not stored, shared, or reprocessed for any alternative purpose.

Non-compliance

The UK is taking a principle-based approach in respect of the regulation of AI, and we do not currently have any legislation in the UK which apply to the direct regulation of AI. However, this may change after the Artificial Intelligence (Regulation) Bill was reintroduced into the House of Lords in March 2025.

Although there is no current UK legislation, companies and employees should be aware of the effects of the EU AI Act, which came into force on 1 August 2024. The main goal of the EU AI Act is for the prevention of risks potentially posed by AI systems and products from arising in the first place. The EU AI Act will come into effect by 2 August 2026, however, certain provisions will be effective earlier, such as for prohibited AI practices on 2 February 2025 and for general purpose of AI on 2 August 2025. The EU AI Act extends beyond the EU and will affect businesses in the UK that develop or deploy AI system or products that are used in the EU, so these businesses must be compliant with the EU AI Act.

Non-compliance could lead to significant fines under the EU AI Act, which are capped at a percentage of global annual turnover in the previous financial year or a fixed amount (whichever is higher).

Any fines or dismissal of employees may severely impact a company’s brand and reputation, including tarnishing their image in the market.

How can businesses utilise AI safely?

AI offers transformative potential for workplaces, but its benefits come with responsibilities. By prioritising compliance with workplace policies and the EU AI Act, companies can harness AI’s power while safeguarding their reputation, legal standing, and operational integrity. In an era where trust and accountability are paramount, responsible AI use is not just a regulatory requirement—it is a business imperative.

Our experienced team of commercial solicitors can support you if you would like to learn more about AI in your workplace, or if you require further advice on your own AI policies.