Navigating the EU AI Act from a Pay Equity Perspective

Just as the European Union moved quickly to set the standard for pay transparency and pay gap reporting, it’s also getting out in front in regulating Artificial Intelligence (AI). 

The EU AI Act requires that any AI systems used in the EU are safe, transparent, traceable, non-discriminatory, and environmentally friendly. An onus is placed on having human oversight as opposed to completely autonomous systems. 

This point is especially prescient as it relates to pay equity. While remedial tasks can be expedited or augmented via generative AI, deterministic decisions about compensation should remain in the hands of humans. 

At Trusaic, responsible AI is a core aspect of our product innovation. From inception to deployment, every Trusaic AI™ capability is developed with governance, fairness checks, and human oversight. We run continuous bias testing, risk assessments, and regulatory reviews — ensuring ethical outcomes for every user.

In this context, we believe the EU AI Act provides a valuable framework for strengthening and formalizing these efforts. 

What Is the EU AI Act?

Adopted in 2024, the EU AI Act is the world’s first comprehensive law governing the development and use of artificial intelligence. It introduces a risk-based framework designed to protect individuals and organizations while encouraging innovation.

The Act classifies AI systems into four categories:

• Unacceptable risk: Banned outright (e.g., social scoring systems).
• High risk: Subject to strict obligations, including those used in HR, hiring, and pay-related decisions.
• Limited risk: Required to meet transparency obligations, such as chatbots disclosing they are AI.
• Minimal risk: Largely unregulated, covering applications like spam filters.

For employers, the “high risk” category is most relevant. AI systems that influence employment or compensation decisions — such as tools used for analyzing pay equity, recommending salary adjustments, or informing hiring practices — must meet rigorous standards for transparency, oversight, and accountability.

Why the EU AI Act Matters for Pay Equity

The intersection of AI and pay equity is clear: systems that assess, report, or recommend changes to employee compensation directly impact livelihoods. That’s why the EU AI Act places such importance on human oversight and non-discrimination.

For example:

• Pay equity reporting tools must not reinforce bias or opaque logic in compliance outputs.
• Remediation simulations — such as Trusaic’s R.O.S.A.™ (Remediation Optimization Spend Agent) — must be explainable and traceable so that employers can defend their pay adjustment decisions.
• Narrative-generation tools supporting pay transparency disclosures must be accurate, consistent, and auditable.

In practice, this means that organizations cannot rely on “black box” AI systems when addressing compliance with the EU Pay Transparency Directive or making remediation decisions. Instead, they must adopt tools that are both intelligent and defensible.

Trusaic’s Responsible AI Approach

Trusaic AI was built with the principles of the EU AI Act already in mind. Our framework emphasizes responsibility, transparency, and human oversight at every stage.

• Governance by design: Each AI agent is developed with embedded compliance checks, ensuring outputs align with pay equity and data protection regulations.
• Bias testing and risk assessment: Continuous monitoring identifies and mitigates potential inequities.
• Transparency and explainability: Every recommendation includes traceable logic, documented assumptions, and clear explanations.
• Human-in-the-loop: AI augments decision-making but never replaces human judgment in areas like pay adjustments or hiring.
• Global compliance alignment: Trusaic AI is SOC 2 certified, ISO 27001 compliant, and aligned with GDPR, the EU AI Act, and emerging state AI regulations in the U.S.

In other words, Trusaic AI is not just a technological advancement, it’s a compliance partner, designed to withstand regulatory scrutiny and support legally defensible pay equity outcomes.

How Employers Can Prepare

With enforcement of the EU AI Act on the horizon, employers should begin preparing now. Here are practical steps to take:

1. Audit your current AI tools: Do they provide transparent, explainable outputs? Can you defend their recommendations to regulators, employees, or courts?
2. Map compliance overlap: Understand where the EU Pay Transparency Directive and EU AI Act intersect — both demand accountability, fairness, and traceability in pay-related systems.
3. Demand traceability: Prioritize AI tools that offer clear documentation, data lineage, and audit-ready outputs.
4. Strengthen human oversight: Ensure compensation and remediation decisions are reviewed by qualified HR, legal, and compliance professionals.
5. Choose trusted partners: Work with solution providers, like Trusaic, that embed responsible AI principles into every product.

Conclusion

The EU AI Act is more than just a technology regulation. It represents a shift toward trust, fairness, and accountability in systems that directly affect people’s lives and livelihoods.

For employers, the dual challenge of complying with both pay transparency requirements and AI regulations underscores the importance of choosing solutions that are built responsibly from the ground up.

At Trusaic, we see the EU AI Act as validation of our long-standing approach: AI should enhance efficiency without ever compromising fairness, transparency, or legal defensibility. 

With Trusaic AI, organizations can embrace innovation confidently — knowing their pay equity strategies are compliant, ethical, and future-proof.

Learn more about how Trusaic approaches Responsible AI.