The European Artificial Intelligence Act (AI Act), officially entered into force on February 2, 2025, is a landmark regulation and the first of its kind.

Now, for HR departments, understanding and preparing for EU AI law must be more than a simple tick-box exercise.

It’s a wake-up call to rethink how artificial intelligence is used in recruitment, performance management and employee engagement, ensuring every process remains fair, transparent and people-centric.

EU AI law: key deadlines and compliance milestones

Here’s a quick overview of what’s already in effect and what’s coming next:

February 2, 2025

• Some applications of AI, such as emotion recognition and manipulation systems, are now banned in the workplace.
• AI knowledge requirements also came into effect for personnel involved in AI operations. HR teams must ensure that affected employees understand how AI works and how to manage it responsibly.

August 2, 2025

• General purpose AI (GPAI) vendors must begin documenting training data, publishing transparency reports, and disclosing potential risks. This impacts suppliers that HR teams may already work with.

August 2, 2026

• Full compliance is required for high-risk AI systems, including those used in recruiting, promotions and performance reviews.
• Employers must conduct data protection impact assessments (DPIAs), maintain technical documentation, and provide human oversight of AI-based decisions.

August 2, 2027

• Additional transparency obligations come into effect, expanding what HR teams must disclose and monitor.

How HR teams should prepare

If your HR department uses AI tools for recruiting, assessment, or workforce planning, here’s what you should do today:

• Train your team: develop AI knowledge across all HR roles so everyone understands the tools they use
• Be transparent: inform candidates and employees when AI is involved in decision-making and explain how it works
• Ensure human supervision: AI should aid decision-making, not replace human judgment
• Conduct DPIAs: When personal data is processed by AI, assess the risks and document your findings
• Monitor AI systems: regularly test for bias, errors and unintended consequences

Non-compliance risks

The consequences of non-compliance with the AI ​​law are serious:

• Fines: sanctions can reach up to 35 million euros or 7% of the overall annual turnover
• Investigations and restrictions: Organizations may face regulatory investigations, reputational damage and operational restrictions.

HR departments are at the forefront of AI adoption and now AI accountability.

The time to act is now! Audit your tools, align with the law and strengthen your internal capacity to manage AI responsibly.

The AI ​​law is not just a legal framework: it is a model for a more transparent, inclusive and human-centered workplace.

The EU AI Act as a catalyst for HR transformation

My colleague, Dan J GraceDirector of IRIS HR Consulting Services, shared his thoughts stating: “The EU AI law represents much more than a compliance requirement: it marks a pivotal moment for HR leaders in redefining how their organizations engage with artificial intelligence.

“As we find ourselves at a crossroads, the choice is clear: view the law as a compliance burden or accept it as an opportunity to champion ethical, human-centered AI practices that will shape the future of work.

“The gradual implementation of the law provides a practical roadmap, but the timelines leave little room for hesitation.

“With emotion recognition systems already banned and full compliance of high-risk AI systems required by August 2026, HR teams must act now.

“The potential sanctions – up to €35 million, or 7% of global annual turnover – underline the seriousness of these obligations.

“But focusing solely on avoiding fines misses the bigger picture.

“The so-called ‘Brussels effect’ ensures that these rules will not remain confined to the EU.

“Just as GDPR has become the global benchmark for data protection, AI law is poised to influence regulatory frameworks around the world.

“At the heart of this transformation is trust – trust between organizations and their people.

“By prioritizing algorithmic transparency, human oversight, and continuous bias monitoring, HR departments can transform AI from a “black box” into a transparent tool that enhances human judgment rather than replacing it.

Collaborate with experts in global HR and payroll compliance

EU AI law is an opportunity for HR leaders to champion the ethical adoption of AI and ensure the technology empowers people rather than replacing them.

At IRIS, we help organizations around the world stay compliant and future-ready through our comprehensive global payroll management services and global human resources consulting services.

Need help assessing your HR technology stack for AI compliance? Our experts can help you with audits, training and policy development to ensure your organization complies with both the letter and spirit of the new regulations.

About the author: Sanchayika Joshi, Senior HR Consultant at IRIS

Sanchayika Joshi is an accomplished professional specializing in human resources and international labor relations.

Holding a Masters in International Labor Relations from the prestigious London School of Economics, she has developed a deep understanding of the complex and evolving HR landscape.

With over a decade of experience, Sanchayika has successfully led initiatives in several areas of HR including talent acquisition, employee relations, HR policy development, performance management, change management and cultural transformation.

A positive psychosocial environment improves both employee performance and overall well-being.

Conversely, unmanaged risks such as stress, poor communication or harassment can significantly harm mental health at work.

Mental health as a legal obligation in the EU

The EU recognizes mental health as a legal requirement under the European Framework Directive 89/391/EEC.

Employers are required to identify, assess and manage all workplace hazards, including psychosocial risks.

This responsibility includes:

• Carry out workplace risk assessments
• Identify potential stressors (e.g., work-related stress, harassment or violence)
• Apply preventive measures to protect vulnerable groups, such as new and pregnant women

As specific legislation on psychosocial risks continues to evolve at European level, the directive highlights the employer’s duty to protect the health and safety of its employees in all work-related aspects.

Employer obligations regarding psychosocial risk assessment

Employers should carry out regular risk assessments to detect and address psychosocial risks.

This includes special considerations for new or expectant mothers, defined as employees who are pregnant, have given birth within six months, or are breastfeeding.

Upon written notification, employers are legally required to carry out individual assessments and implement protective measures, such as changing working conditions or offering suitable alternative roles.

Risk assessments should not be a one-off exercise.

They should be reviewed periodically and updated when workplace circumstances change to maintain compliance.

Employers also have a responsibility to ensure that those carrying out assessments are properly trained, competent and supported with sufficient time and resources.

Examples of common psychosocial risks

Psychosocial risks vary by sector, but generally include:

• Excessive workload and job insecurity
• Harassment, intimidation or abuse (both physical and verbal)
• Poor communication and lack of recognition
• Monotony, lack of autonomy or underutilized skills

The EU strategic framework for health and safety at work places emphasis on adapting working conditions to reduce these risks, ensuring that employees’ mental health is treated with the same importance as physical safety.

Best practices for supporting mental health at work

To create a safe and supportive workplace, organizations must use a comprehensive mental health strategy that includes prevention, intervention and ongoing support:

• Develop a mental health strategy: integrate mental health into HR and well-being policies with the contribution of employees and professionals
• Train managers: provide line managers with training to help them recognize mental health issues, promote open communication and effectively support employees
• Primary prevention: promote good mental health through stress management programs, equitable job design and healthy workloads
• Secondary intervention: offer early support, such as training or resilience workshops, to employees who show signs of distress
• Tertiary support: facilitate return-to-work programs for employees recovering from mental health-related absences with flexible arrangements
• Mental health first aiders: train designated staff to provide initial support and direct colleagues to professional resources
• Promote awareness and reduce stigma: communicate regularly about available mental health resources and encourage employees to seek help
• Reasonable adjustments: proactively adapt working conditions, such as flexible hours or adapted workloads, to support employees in distress

By implementing these measures, employers can create a supportive environment that not only addresses mental health issues but also promotes overall employee well-being.

Example: Step-by-step psychosocial risk assessment guide

Moving beyond compliance to real care

My colleague, Dan J GraceDirector of IRIS HR Consulting Services, shared his thoughts, saying: “Having reviewed Claudia’s analysis of psychosocial risk management in EU workplaces, I am struck by a fundamental paradox: while mental health has rightly become a legal requirement, there is still a troubling gap between regulatory compliance and genuine well-being at work.

“The European Framework Directive 89/391/EEC has undoubtedly placed mental health among the priorities of companies, and this is progress.

“However, what Claudia and I are observing in practice is concerning.

“Too many organizations carry out risk assessments that end up gathering dust, ticking boxes without speaking to the people behind the data. “They study stress levels, document harassment risks and file reports, but employees continue to struggle in silence, fearing stigma more than seeking support.

“The real challenge is not defining psychosocial risks: we already know that excessive workloads, harassment, poor communication and monotonous work are major dangers.

“The challenge is that many employers still view mental health as a compliance exercise rather than a human responsibility.

“What gives me hope are successful organizations.

“These employers are integrating mental health into leadership culture, creating safe spaces for open dialogue, and most importantly, putting what they learn into practice.

“They recognize that a psychologically safe workplace is not only a legal requirement; it’s both commercially smart and morally essential.

“My takeaway is this: legislation provides the framework, but only real commitment produces results. »

Closing the gap

The main obstacle lies in misunderstanding: mental well-being requires a holistic approach to risk management, not just awareness.

To make real progress, employers must turn assessment findings into concrete action plans that address employee needs, such as providing mental health days, access to counseling or peer support networks.

At IRIS, our Global HR Services helping organizations close this gap by turning compliance into meaningful actions.

From designing bespoke psychosocial risk assessments to implementing employee wellbeing programs across borders, we provide the expertise and support to create workplaces where people feel truly heard, valued and supported.

Find out how our Global HR Services can help you move beyond compliance to build a healthier, more resilient workforce.

About the author: Claudia Morel-Zifonte, Senior International HR Consultant at IRIS

Passionate about delivering people results, Claudia is a seasoned leader with extensive experience in the European market.

She holds a CIPD Level 7 Diploma and Chartered MCIPD status, bringing additional expertise and operational excellence to IRIS’ international consultancy service.

Having lived in several countries and speaking three languages ​​fluently, Claudia thrives in multicultural environments and enjoys building meaningful connections between diverse teams.