BUY SIDE · HRTECH DILIGENCE

AI due diligence for HRTech acquisitions.

Hiring AI, performance scoring, and scheduling tools trigger EU AI Act Annex III, Illinois HB 3773, and NYC Local Law 144. PE buyers routinely miss all three.

SECTION 01

Why HRTech is different.

Resume screening, ranking, and scoring AI sits squarely in EU AI Act Annex III §4. Conformity assessment is required before market placement.

Illinois HB 3773 carries a private right of action against employer-side AI hiring tools. The exposure flows downstream to the AI vendor.

NYC Local Law 144 requires annual bias audits, posted publicly. Most HRTech targets either skip the audit or fail to file it.

SECTION 02

What IRON finds in HRTech deals.

  1. Resume screening AI (Annex III)
    Detected via privacy policy and job postings. Annex III §4 classification.
  2. EEOC adverse impact
    Internal validation not publicly documented; selection-procedure risk.
  3. NYC Local Law 144
    No bias audit filed publicly despite NYC operations.
  4. Illinois HB 3773
    Private right of action attaches to AI hiring tools used on Illinois applicants.
SECTION 03

Frameworks that apply.

Framework Trigger Obligation
EU AI Act Art. 6, Annex III §4 Conformity assessment, post-market monitoring
Illinois HB 3773 Hiring AI Private right of action; vendor passthrough
NYC Local Law 144 Bias audit Annual audit, publicly filed
Colorado SB 24-205 Consequential decisions Disclosure and impact assessment
EEOC Uniform Guidelines Adverse-impact validation for selection procedures
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