Focus on Labour Law - 2nd quarter 2025

As the first half of the year draws to a close, we are sending you our second issue of Focus on Labour Law, which provides you with an up-to-date overview of the most important labour court decisions of recent months as well as new legislation.

Of particular practical relevance are the much-noticed decisions of the Federal Labour Court (Bundesarbeitsgericht, BAG) on the expiry of virtual option rights after termination of the employment relationship and on the multiple voting right of matrix managers in works council elections.

Finally, in the "Rethinking HR!" section, we take look at the AI Act and examine the possibilities and limits of using AI systems in the HR sector.

1. New case law

1.1 Protection against dismissal for former managing directors: executive position ends - protection against dismissal begins?

1.2 End of the waiver of minimum holiday entitlement by court settlement?

1.3 ​​​​​​Damages caused by testing cloud-based software

1.4 Expiry of virtual option rights after the end of the employment relationship?

1.5 ​Default interest (1): remuneration claims in the event of grouping

1.6 Default interest (2): social plan claims in the event that the social plan is contested

1.7 Multiple voting rights of matrix managers: new challenge in upcoming works council elections

2. Legislation

Reform of the Maternity Protection Act

3. Rethinking HR!

High-risk AI in the HR sector

1. New case law

1.1 ​Protection against dismissal for former managing directors: executive position ends - protection against dismissal begins?

A former managing director whose executive position no longer exists at the time of receipt of his termination can invoke the general protection against dismissal under the German Unfair Dismissals Act (Kündigungsschutzgesetz, KSchG). The provision of Section 14 (1) No. 1 KSchG, according to which protection against dismissal does not apply to legally appointed representatives of a legal entity, does not preclude this. This was recently confirmed by the Regional Labour Court (Landesarbeitsgericht, LAG) of Hesse in its judgement of 28 February 2025 - 14 SLa 578/24.

The parties had concluded an employment contract that provided for the plaintiff’s employment as managing director of the company, with the option to render employment services elsewhere. The plaintiff was appointed managing director and worked for the defendant as managing director on the basis of this employment contract. In February 2023, he was dismissed from office as managing director with immediate effect by shareholder resolution and ceased to perform any equivalent managerial duties as of this time. The defendant subsequently sought an equivalent employment opportunity for the plaintiff, but without success. In June 2023, the defendant terminated the employment relationship with the plaintiff, giving due notice. The plaintiff filed an unfair dismissal action. The action was dismissed at first instance in reference to the provision of Section 14 (1) No. 1 KSchG.

The LAG Hesse, however, declared the KSchG to be applicable and upheld the action. The protective effect of the KSchG did not cease to apply simply because the employment relationship had originally been linked to the plaintiff’s employment as managing director. The only decisive factor was whether an executive position still existed at the time of receipt of the notice of termination. The provision of Section 14 (1) No. 1 KSchG certainly does not apply to cases in which the executive position no longer exists at the time of receipt of the notice of termination and if several weeks have passed between the dismissal from office and the notice of termination. The employer can prevent the applicability of the general protection against dismissal in the managing director’s favour by terminating the contractual relationship before or at the same time as the dismissal from office. If the managing director resigns from office before receiving this notice of termination solely in order to benefit from protection against dismissal, he cannot invoke such protection in accordance with Section 162 of the German Civil Code (Bürgerliches Gesetzbuch, BGB).

The decision of the LAG Hesse is not final; the appeal is pending before the BAG (docket No. 2 AZR 89/25) and is eagerly anticipated, as a great deal of uncertainty still exists in connection with the termination of contracts with managing directors. In particular, in cases where the basis of the collaboration is an employment contract and no separate managing director’s service agreement has been concluded, there is often uncertainty as to how the company can terminate the contract without the risk of protection against dismissal.

One thing is clear: the employer should definitely only declare the managing director’s dismissal from office after receipt of the notice of termination, or at least simultaneously with its receipt. This is because, according to prevailing opinion, in this case no protection against dismissal exists in the managing director’s favour pursuant to Section 14 (1) No. 1 KSchG.

The LAG mentions an interesting aspect almost incidentally: If the managing director tries to pre-empt the dismissal by resigning from his executive position and thus establishing protection against dismissal in accordance with the KSchG, this is likely to be assessed as an act in breach of trust, from which no advantage can be gained. The BAG will hopefully also take a position on this issue in the expected decision, as it is also of great practical relevance.

Kathrin Vossen

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1.2 ​​​​​​End of the waiver of minimum holiday entitlement by court settlement?

In its judgement of 3 June 2025 (9 AZR 104/24), the BAG has clarified that statutory minimum holiday cannot be waived by court settlement. This is also the case if the employee is no longer able to take the holiday by the end of the employment relationship due to illness.

The plaintiff was employed by the defendant as a plant manager. He had been unable to work due to illness since the beginning of 2023 and was therefore unable to take his statutory holiday. In March 2023, the parties concluded a court settlement to terminate the employment relationship. Among other things, the settlement contained the clause that "holiday entitlements are granted in natura". From the company's point of view, the holiday entitlement was thus settled.

In a further lawsuit, the plaintiff then sought compensation for his remaining days of statutory minimum holiday. The lower courts upheld the claim and the BAG dismissed the company's appeal on points of law.

The BAG clarified: The clause "holiday entitlements are granted in natura" regulated an impermissible exclusion of the statutory minimum holiday and was therefore invalid. The statutory minimum holiday cannot be excluded or limited in advance during an ongoing employment relationship. The purpose of the holiday claim is the employee’s recuperation in the sense of the protection of their health and is not discretionary. This is the case even if it is clear at the time of concluding the settlement that the employee will no longer be able to take the holiday due to illness and a settlement is paid.

The clause also does not constitute an agreement on the factual situation regarding the holiday claim (so-called “Tatsachenvergleich”). The prerequisite for this is that an existing uncertainty as to the actual prerequisites for the claim is to be dispelled by mutual concession. Due to the plaintiff's continuous inability to work, however, there was no uncertainty regarding the prerequisites for the holiday claim.

What are the practical implications of the decision? Caution is required when concluding a court settlement or cancellation agreement during an ongoing employment relationship, especially in the case of employees who have been on long-term or permanent sick leave, as there is usually no uncertainty regarding existing holiday entitlements in such case.

On the whole, the standard “Tatsachenvergleiche” that stipulate that the holiday entitlement has already been granted in natura should not be agreed without further examination. If it is not foreseeable whether the holiday can still be granted by the end of the employment relationship, such agreements on the factual situation regarding the holiday entitlement are still possible. Furthermore, it is still possible to reduce the severance payment, which is also regularly agreed, by possible claims to remuneration in lieu of holiday and to provide for an irrevocable release from duties which encompasses the holiday entitlement in the court settlement.

Different arrangements are still possible with regard to the contractual holiday claim, as the decision only affects the statutory minimum holiday.

Katharina Schäffer

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1.3 Damages caused by testing cloud-based software

When a company transfers personal data within its group to another company in order to test cloud-based software for HR management ("Workday"), this is subject to the provisions of the GDPR. If the transfer takes place - even partially - without an adequate legal basis, this constitutes a breach of the GDPR. Consequence: a possible claim for damages by the employee, according to the BAG in its judgement of 8 May 2025 - 8 AZR 209/21.

The company intended to introduce the Workday software as a standardised group-wide HR management system. To this end, it had regulated the provisional test operation of the software with the works council in a so-called toleration shop agreement. However, in addition to the transfer of master data authorised for the test purposes, the company had transferred further personal data to the parent company based in the USA, including salary information, private residential address, marital status, social security number and tax ID.

The plaintiff ultimately demanded compensation for immaterial damages in the amount of EUR 3,000 pursuant to Art. 82 (1) GDPR, based on the fact that the company had exceeded the limits of the toleration agreement.

The BAG awarded the plaintiff a claim for damages in the amount of EUR 200. Insofar as the company had transferred personal data not regulated in the toleration agreement to the group parent company, this had not been necessary within the meaning of Art. 6 (1) sub-para. 1 letter f) GDPR. Consequently, the corresponding data transfer violated the GDPR. The BAG justified the damage claim with the loss of control over the personal data this had caused.

The legally compliant processing of data in an employment relationship poses a challenge for companies. In the previous referral proceedings, the ECJ emphasised (see judgement of 19 December 2024 - C-65/23) that shop agreements that establish "more specific rules" for the processing of personal data in the employment relationship in accordance with Art. 88 (1) and (2) GDPR must nevertheless still comply with the general principles of the GDPR. Insofar as the GDPR gives the employer and works council room for manoeuvre with regard to the "necessity" of the processing of personal data, this is subject to full review by the courts.

Against this background, companies must bear two aspects in mind: Insofar as the data processing 1) takes place on the independent basis of a shop agreement, this must fulfil the requirements of the GDPR overall - a lower level of protection to the detriment of employees is not permitted. Secondly, the specific data processing must 2) take place within the limits of the shop agreement.

We recommend that companies already critically examine during the conception phase whether and which processing of personal data is actually "necessary" or "proportionate". The processing must be GDPR-compliant overall, which means that its principles need to be observed on a constant basis. Furthermore, there is a practical risk of the successive expansion of the scope of the processing of personal data – system-driven - after the shop agreement has been concluded, and that it thus may become unlawful. Under compliance aspects, this will have to be kept under constant review. Otherwise, there is a risk of higher and not just "symbolic" damage claims or fines. Relevant training courses help to sensitise the responsible parties.

Johannes Kaesbach

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1.4 Expiry of virtual option rights after the end of the employment relationship?

Ideally, employee participation in the form of virtual share option plans (VSOPs) promises a classic win-win situation: if the company performs well, employees benefit financially through performance-related participation; if the company is not economically successful, it bears no additional burden. Forfeiture clauses in the event of an employee’s premature departure from the company harbour particular potential for conflict. The BAG has now restricted such clauses in its ruling of 19 March 2025 - 10 AZR 67/24.

The company had granted the employee 23 virtual option rights as part of a VSOP programme on the basis of a four-year vesting period (including a one-year cliff). After the employee himself gave notice of termination in due time on 31 August 2020, 31.25% of these virtual options were "vested". The participation programme stipulated that these were to expire either through the employee's own termination or the passage of time.

The BAG classifies the VSOP programme as general terms and conditions and initially clarified that the mere use of English technical terms such as "vested" or "forfeited" does not lead to a lack of transparency within the meaning of Section 307 (1) sentence 2 BGB.

Nevertheless, neither of the forfeiture clauses were upheld by the BAG. The basis for the decision was the legal categorisation of the vested virtual options. The BAG attested the VSOP programme at issue as having the character of remuneration because, among other things, the economic value of the options depends on the company's development, to which the employee indirectly contributes. This connection is inherent in the nature of VSOPs and supports their being examined in future according to the criteria for examining general terms and conditions for services that have the character of remuneration.

Against this background, the BAG first criticises the clause on the immediate forfeiture of all vested options in the event of the employee’s own termination. This deprives the employee of remuneration already earned and unreasonably impedes their right of termination protected by Article 12 (1) of the German Constitution (Grundgesetz, GG). Notably, the BAG does not declare the invalidity of the immediate forfeiture per se. Rather, it suggests that a differentiation according to responsibility for the termination could be permissible. The second clause, which provides for a staggered forfeiture within 24 months, also does not stand up to an examination as general terms and conditions. In particular, the BAG criticises the fact that the options are to expire in half the time in which they were previously built up. Such acceleration is not justified.

Even following this decision, VSOP programmes remain an attractive instrument for employee retention. In future, however, even greater care must be taken in their design. Numerous programmes contain clauses that are legally contestable from today's perspective. So-called bad leaver clauses need to be reconsidered. A differentiated consideration according to the responsibility for the termination is required. Staggered forfeiture provisions are also no longer a sure-fire solution. At the very least, a congruence between the period of the vesting phase and the intended forfeiture period will have to be maintained in future in order to fulfil the proportionality requirements. Should you wish to continue using VSOPs as a long-term retention instrument in the future, their labour law structure will have to be regularly reviewed and, if necessary, adjusted. This does not only apply to the design of new programmes.

Roman Braun

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1.5 ​​​​​Default interest (1): remuneration claims in the event of grouping

On 29 January 2020, the BAG ruled that default interest must also be paid in the event of the late payment of remuneration owed in the case of disputed grouping issues. Default interest can be claimed from the first day of grouping.

The plaintiff had worked as a lorry driver in the public sector for over 30 years and was paid according to pay group 5 of the public sector collective agreement TVÖD/VKA. He claimed that his job fulfilled the requirements of pay group 6, as he operated a special vehicle with an integrated loading crane. The defendant rejected the claims and argued that the plaintiff had no formal vocational training as a professional lorry driver. The plaintiff demanded the differential remuneration for several years as well as default interest for the late payment. The lower court, the LAG Munich, dismissed the claim on grounds of its different assessment of the grouping criteria.

The BAG clarified (BAG, judgement of 29 January 2025 - 4 AZR 69/24) that default interest is payable in accordance with Section 286 (2) No. 1, Section 288 BGB if the company is in default of payment. The preclusive period under Section 37 (1) TVÖD/VKA had been complied with through the timely assertion of the main claim. A misconception of the law on the part of the employer, which was based on the unclear grouping issue, was not recognised as having exonerating effect. The BAG overturned the judgement of the LAG and referred the case back for a new hearing, as the grouping criteria had not been sufficiently examined. In particular, it had to be clarified whether the plaintiff's many years of practical experience should be regarded as equivalent to formal vocational training.

Companies need to be aware of the fact that default interest is also owed in the case of disputed grouping issues, provided that the preclusive periods stipulated in the collective agreement have been observed. Reference to a misconception of the law is generally not sufficient to avoid default interest.

Jörn Kuhn

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1.6 Default interest (2): social plan claims in the event that the social plan is contested

On 28 January 2025, the BAG ruled that severance payment claims under a social plan fall due on the date specified in the social plan, even if the social plan issued by decision of the conciliation board is challenged in court. Default interest can be claimed from the due date specified in the social plan.

The plaintiff was employed by the defendant until 31 July 2019. In 2018, a social plan was adopted by a conciliation board, which provided for severance payments for the employees concerned. According to the provisions of the social plan, claims arose upon the conclusion of the social plan and became due upon the legal termination of the employment relationship. The defendant contested the social plan as it considered it to be invalid. A final decision on the contestation was not made until 2021, with the courts in all instances confirming the validity of the social plan. The defendant did not pay the plaintiff's severance payment until after the conclusion of the proceedings in 2021, whereupon the plaintiff demanded default interest for the period between the due date of the severance payment and the actual payment.

The BAG clarified (BAG, judgement of 28 January 2025 - 1 AZR 73/24) that the severance payment becomes due upon termination of the employment relationship unless a different date is stipulated in the social plan. The legal contestation of the social plan has no suspensive effect on the due date of the claims. The company had therefore been in default from the due date without any need for a reminder. The court emphasised that a misconception of the law on the part of the company based on the contestation of the social plan and the uncertainty of the payment obligation does not have an exonerating effect.

In practice, this decision means that delaying severance payments in comparable situations in which the social plan has been contested will lead to further cost increases. From the company's perspective, it is only possible to attempt to realise possible repayment claims in the event of a successful contestation and subsequently lower payment obligations insofar as the employees have been made aware of the contestation and possible consequences thereof upon payment of the severance. This should also render the objection of financial loss on the part of former employees futile.

Jörn Kuhn

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1.7 Multiple voting rights of matrix managers: new challenge in upcoming works council elections

The BAG is extending its case law on the inclusion of matrix managers and has clarified that they are entitled to vote in works council elections in several businesses within the same company. As we approach the regular works council elections being held next year, this creates a need for companies organised in matrix structures to review their situation – which should not be underestimated.

The BAG's decision of 22 May 2025 - 7 ABR 28/24, to date only available as a press release, was preceded by the decision of the LAG Baden-Württemberg of 13 June 2024 - 3 TaBV 1/24, which rejected the multiple voting rights of a matrix manager in different businesses of the contractual employer. Diametrically opposed to this, on 22 January 2024 - 2 BV 860/22, the LAG Hesse ruled that employees who are "integrated" into several businesses are also entitled to vote in all of these businesses (see article in Focus on Labour Law 4th Quarter 2024).

The BAG has now clarified that an employee's eligibility to vote in a works council election at a business depends on their integration into the business organisation. An existing integration into a business does not exclude the right to vote in another business of the company, meaning that a double right to vote is certainly possible. The decisive factor is in which cases such integration exists.

In previous decisions, the BAG stated that the mere authority to issue professional and/or disciplinary instructions to employees of another business is not sufficient. Whether a manager is integrated into the work processes of a business must be clarified on a case-by-case basis, whereby this does not necessarily require work activities on site at the business (BAG, decision of 26 May 2021 - 7 ABR 17/20; 14 June 2022 - 1 ABR 13/21). However, the new press release now available from the BAG reads in such a way that it might already suffice for an assignment to the business and thus also for a right to vote at the business if the manager issues only professional instructions to employees.

The BAG's decision will have a massive impact on the works council elections next year. Companies would be well advised to check whether and in which businesses their matrix managers are integrated, as this may result in larger works council committees (Section 9 of the German Shop Constitution Act [Betriebsverfassungsgesetz, BetrVG]) and releases from duties (Section 38 BetrVG). As disputes with the works councils are pre-destined, companies should take early measures to prepare for election contestations.

However, the BAG does not only provide clarity: the assessment of the eligibility to vote in cross-company matrix organisations, in particular in a group of companies or with a foreign connection, in which other contractual employers are involved, remains unclear. The LAG Bremen recently commented on this in 2024 and took the view that a foreign matrix manager can also be integrated into a German business (decision of 2 May 2024 - 2 TABV 2/23). However, it is unclear whether such foreign matrix managers are entitled to vote or even stand for election at the German business and whether shop agreements apply to them despite the fact that they work for a foreign contractual employer abroad. It remains to be seen whether the BAG will go this far in future. However, the doubts concerning such a further development of the law are considerable.

In order to make it quicker and easier for you to determine the correct size of works council committees for the coming year in preparation of the works council elections, we will shortly be making our Legal Tech threshold tool available to you. Please feel free to contact us in this connection.

Annabelle Marceau & Alexandra Groth

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2. Legislation

Reform of the Maternity Protection Act

The reform of the Maternity Protection Act (Mutterschutzgesetz, MuSchG) came into force on 1 June 2024. This significantly strengthens the protection of employees who have suffered miscarriages and closes a previous legal loophole.

Previously, statutory maternity protection only applied to live births or stillbirths after the 24th week of pregnancy. Miscarriages before this time were not taken into account under maternity protection law. Affected employees were neither entitled to a period of protection nor to maternity benefits.

The legislator has recognised this legal loophole and has introduced staggered protection periods following miscarriages with its reform of the Maternity Protection Act:

• Miscarriage from the 13th week: protection period of 2 weeks
• Miscarriage from the 17th week: protection period of 6 weeks
• Miscarriage from the 20th week: protection period of 8 weeks

Before the change in the law, many employees had to return to work immediately after a miscarriage or could only protect themselves by taking sick leave. The reform now introduces a fundamental ban on employment during the protection period. Companies must take this into account in their personnel planning and work organisation.

During the protection period, employees who have suffered a miscarriage receive maternity benefit and companies are obliged to pay the employer’s contribution to maternity pay. However, they can have the expenses reimbursed in full as usual via the U2 levy insurance. This creates a financial balance that relieves the burden on companies and at the same time supports the employees concerned.

The reform of the Maternity Protection Act recognises the particular mental and physical strain on employees who have suffered a miscarriage and brings a long overdue improvement for them. At the same time, it provides a clear legal framework for companies to ensure the protection and support of affected employees.

Fatoumata Kaba

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3. High-risk AI in the HR sector

With the AI Act, the EU has created the world's first comprehensive legal framework for artificial intelligence. The new regulations are particularly important in the HR sector, where AI offers a wide range of potential applications. The AI Act has been in force since August 2024 and the employer training obligations under Art. 4 of the AI Act and the provisions on prohibited AI practices under Art. 5 of the AI Act have been applicable since February of this year. From 2 August 2026, the specific obligations for high-risk AI systems, which play a central role in HR, will also apply. As the implementation of IT systems in companies can generally take a considerable amount of time - especially in light of the strict requirements for AI systems - we are already taking this opportunity to provide you with an overview of which AI systems are categorised as high-risk under the AI Act in the HR sector and what obligations this entails for companies.

1. What is an AI system?

The term "AI system" is the central point of reference for the AI Act. According to Art. 3 No. 1 of the AI Act, an AI system is software that is not based solely on rules programmed by humans, but itself derives how outputs are created. Many software programmes already use so-called Large Language Models (LLMs) such as ChatGPT, DeepSeek, Claude or other AI models. Only software that works purely deterministically is not considered AI within the meaning of the AI Act.

2. High-risk AI systems in the HR sector

The AI Act categorises AI systems into different risk categories: systems that implement prohibited practices (Art. 5 AI Act), high-risk systems (Art. 6 AI Act) and systems with low risk. The focus of regulation is on high-risk systems. There is a particularly high risk in the HR sector. This is because the following HR applications are categorised as high-risk:

1. Personnel selection and recruiting: systems that screen and evaluate applications, such as automated candidate screening tools like "Workday Recruiting", personalised communication with applicants like "Cornerstone - Galaxy" or video interview platforms with language analyses like "My Interview".
2. Decisions on employment conditions: Systems that influence salary increases, promotions or terminations, also known as "human capital management systems (HCM systems) such as "Workday".
3. Assignment of tasks and personnel deployment planning: Systems that assign tasks based on individual behaviour or personal characteristics (task management systems) such as "Asana" and tools for individual personnel deployment planning that predict staff requirements and detect anomalies - such as overtime - such as the AI-supported workforce management tool from "UKG (Ultimate Kronos Group)".
4. Monitoring and evaluation of employees: Tools that analyse employee performance or behaviour, for example by evaluating work patterns or performance such as "Microsoft Viva Insights".

Art. 6 (2) in conjunction with Annex III No. 4 of the AI Act regulates which systems are considered high-risk AI. The definitions are broad, meaning that HR software is already subject to the strict regulation for high-risk AI systems if is only contains one function that falls into one of the areas mentioned.

Point (d) in particular could be a major gateway, as it is very similar to the wording of Section 87 (1) No. 6 BetrVG, according to which co-determination rights exist when introducing technical equipment that monitors the behaviour or performance of employees. According to case law, this is ultimately the case for any software that processes employee data. If this is applied to the AI Act, any HR software that uses AI would be a high-risk AI system. Even harmless AI-supported applications in time-recording systems, tools for holiday planning or programmes for creating performance reports could then fall under the strict requirements for high-risk AI.

The majority of software providers currently advertise AI-supported functions. However, whether the system being offered actually constitutes an AI system or even a high-risk system within the meaning of the AI Act will need to be analysed in detail. At the latest when the specific obligations for high-risk AI systems come into force from 2 August 2026, software providers will also adapt their marketing slogans.

The only possible rescue option in this case would be in accordance with Art. 6 (3) of the AI Act, which excludes systems from the high-risk area that only perform preparatory tasks or structure data without carrying out independent content assessments.

3. Obligations for users of high-risk AI systems

Companies that use AI-supported HR tools often obtain the systems as solutions from specialised providers. In these cases, the companies are not the providers of the AI system, as they have not developed it themselves (Art. 3 No. 8 AI Act). Instead, they take on the role of the deployer (Art. 3 No. 4 of the AI Act) and are therefore subject to strict legal requirements when using high-risk AI, which aim to protect the safety and fundamental rights of the employees concerned and at the same time promote innovation in the EU. According to Art. 26 of the AI Act, these requirements include in particular

• Complying with operating instructions (para. 1): Deployers must ensure that the AI system is used in accordance with the operating instructions provided by the provider.
• Ensuring human oversight (para. 2): Supervision of the AI system must be assigned to qualified persons who have the necessary competence and authorisation.
• Checking input data (para. 4): Deployers are obliged to ensure that the input data corresponds to the intended purpose of the AI system and is sufficiently representative.
• Operational monitoring and reporting (para. 5): Deployers must continuously monitor the operation of the AI system and, in the event of risks or serious incidents, immediately inform the provider, distributor and relevant authorities.
• Retaining logs (para. 6): Deployers must retain automatically generated logs of the AI system for at least six months, unless other legal requirements apply.
• Notifying employees and their representatives (para. 7): Before a high-risk AI system is put into operation in the workplace, employees and their representatives, i.e. works councils, must be informed about the use of the system.

Since February of this year, companies have also already been obliged to train their employees involved with AI systems, regardless of the level of risk of an AI system (Art. 4 AI Act). Technical knowledge, professional experience, training and further education as well as the specific context of AI use must be taken into account.

4. Consequences of infringements and recommendations for action

Art. 99 of the AI Act provides for severe sanctions in the event of violations of the AI Act. Violations of the obligations for high-risk AI systems can result in penalties of up to 15 million euros or 3% of annual global turnover, Art. 99 (4) of the AI Act.

To ensure your timely preparation, the following measures should be taken now:

• Check the current situation: Identify whether your company uses AI systems and whether these could be categorised as high-risk.
• Ensure your compliance: Develop AI governance that is suitable for your company.
• Carry out training measures: Ensure employees have the necessary AI literacy.
• Promote collaboration: Involve works councils, data protection officers and specialist departments at an early stage, if necessary.

Conclusion

The use of AI systems in HR opens up a wide range of opportunities for companies to optimise processes and make them more efficient. At the same time, however, it entails considerable liability risks if the strict requirements of the AI Act are breached. It is essential for companies to take measures at an early stage to counter these risks: from identifying potentially high-risk AI systems to developing company-specific AI governance and training employees. We would be happy to support you in this connection.

Annabelle Marceau & Kathrin Vossen

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For queries and comments, the authors can be reached directly by e-mail at [email protected].

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