Your employees may already be using artificial intelligence at work, whether you have officially approved it or not.
They may be using ChatGPT to draft an email, summarize a document, rewrite marketing copy, prepare a spreadsheet, brainstorm client communications, or help with a presentation. Managers may be experimenting with AI-assisted hiring tools or performance software. Someone may even be pasting company or customer information into an AI platform without realizing that doing so could create a confidentiality problem.
For many businesses, the question is no longer whether employees will use AI. The better question is: what rules do you want them to follow when they do?
For a growing business, a short and practical AI policy can provide useful guardrails without banning a technology that may genuinely improve productivity.
AI creates several different kinds of business risk, and most of them are not particularly exotic.
They are familiar business risks showing up in a new format.
This is often the first issue businesses should address.
An employee may use an AI tool to summarize:
Depending on the tool, account settings, contractual protections, and how the information is processed, entering confidential information into a third-party AI platform may expose information outside of systems the company has approved.
The employee may think, “I am just asking the program to summarize this.”
The business should instead be asking, “What information just left our environment, and what rights does the provider have to it?”
An AI policy should therefore make clear what information employees may and may not enter into AI tools.
Generative AI tools can produce polished answers that are inaccurate, incomplete, or entirely fabricated.
That does not necessarily make the technology unusable. It does mean that businesses should not treat AI output as automatically reliable.
If an employee uses AI to prepare:
the company should require an appropriate level of human review before the work is relied upon or sent outside the organization.
A useful policy should reinforce a simple rule:
AI may assist with the work. It does not replace the employee's responsibility for the work.
Employees may use AI to create written content, graphics, marketing materials, software code, presentations, or other work product.
That raises questions about both inputs and outputs.
For example:
Businesses do not necessarily need to prohibit AI-generated work. They should, however, establish who is responsible for reviewing it before publication or commercial use.
There is an important distinction between employees using AI to help perform their jobs and employers using automated tools to make decisions about employees or applicants.
Federal employment laws still apply when technology is involved. The EEOC has specifically warned that AI and algorithmic tools used for hiring, promotion, monitoring, compensation, or other employment decisions can create discrimination concerns, including under the Americans with Disabilities Act.
Colorado employers also need to pay particular attention to this area.
Colorado enacted Senate Bill 26-189 in 2026, regulating certain automated decision-making technologies used to materially influence consequential decisions, including employment decisions. Among other things, the law creates disclosure, documentation, data, and human-review requirements for covered systems, with significant provisions beginning January 1, 2027.
A general employee AI-use policy will not, by itself, solve those compliance issues.
But if your company is using software to screen applicants, rank candidates, evaluate employees, recommend compensation, or otherwise influence important employment decisions, that use deserves a separate legal review.
Without a policy, employees may create their own rules.
One employee may use a paid enterprise AI platform. Another may use a free personal account. Another may install an AI browser extension. Someone else may upload documents to a tool the company has never reviewed.
That makes confidentiality, cybersecurity, records management, and vendor oversight difficult.
A policy can establish:
For many small businesses, this is more useful than trying to create a lengthy technology policy covering every possible AI platform.
The appropriate policy depends on how your business operates, but most policies should address at least the following areas.
Identify uses that are generally permitted.
For example, a business might allow employees to use approved AI tools to:
Employees should understand what they should not enter into an AI system without authorization.
Depending on the business, that may include:
The policy should identify when an employee must verify AI-generated work before using it.
The higher the potential consequence of an error, the more important human review becomes.
Consider whether employees may use AI to prepare customer-facing or public materials and whether any additional review is required before publication.
Businesses should consider restricting employees and managers from independently using AI tools to make hiring, termination, compensation, promotion, disciplinary, or performance decisions.
Those uses create substantially different risks from asking AI to help rewrite an email.
The policy should address the use of third-party content, company intellectual property, and AI-generated materials.
Employees should know whether they can adopt new AI tools themselves or whether approval from management or IT is required.
Not necessarily.
For some businesses, the better approach may be to add a short AI section to an existing:
For others, particularly companies where employees use AI frequently, a standalone policy may be clearer.
The goal is not to create another policy simply because AI is receiving attention.
The goal is to establish reasonable rules before employees are forced to guess what is allowed.
Businesses sometimes respond to AI in one of two ways.
The first is to prohibit it entirely.
That may be appropriate in certain environments, but for many companies it simply drives AI use underground.
The second is to have no rules at all.
That leaves employees making individual decisions about confidentiality, security, accuracy, and acceptable use without guidance from the business.
There is usually a more practical middle ground:permit reasonable use, identify higher-risk activities, protect sensitive information, and require employees to remain responsible for the final work product.
Before drafting a policy, find out what is already happening.
Ask:
The answers will usually tell you whether your business needs a simple handbook provision or a more detailed AI-use policy.
AI is likely to become a normal workplace tool in the same way that email, cloud storage, and collaboration platforms did.
The businesses that manage it well will not necessarily be the businesses with the longest policies.
They will be the businesses that give employees clear, practical rules about what they can do, what they cannot do, and when human judgment still needs to take over.
This article is provided for general informational purposes only and is not legal advice. AI regulation is developing quickly, and businesses should evaluate their policies based on their particular operations, workforce, technology, and legal obligations.
© 2026 Poorvi Parkhie
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