(Disclaimer: This article is for general informational purposes only and should not be considered legal advice.)
AI tools are everywhere now, in our workplaces, schools, homes, you name it. People are using AI-powered apps and features to do just about everything, write emails, create and edit content, summarize documents, develop code, analyze data, chat with customers, and more.
This article provides general information and should not be considered legal advice. Requirements depend on your business, workforce, tools, and jurisdiction.
That’s great, right? Well, not so fast. As convenient and seemingly innocuous as AI-powered apps and features may be, they can put your business at risk. Without rules in place for using AI tools, employees could:
- Share confidential information
- Rely on inaccurate information
- Use unapproved AI tools for work
Employees need AI use policies they can easily understand. These AI policies for employees should explain which AI tools employees can use, how they can (and can’t) use them, and expectations around using, disclosing, and getting approval to use AI tools.
Add an AI policy for employees to your employee handbook so that employees and managers have a resource they can turn to. Here’s what to include in an AI policy for employees in 2026 and beyond.
Why Your Employee Handbook Needs an AI Policy
Think of your employee handbook as the place you explain to employees how things work at your company. Since AI tools are now part of “how things work,” it’s important to explain to employees how AI fits into their jobs and responsibilities.
Including a section on acceptable AI use in your employee handbook is a smart idea for many (if not all) employers. Having a policy in place can help your business:
- Protect confidential information
- Decide which AI tools employees can use
- Set expectations around reviewing work AI helped produce
- Outline how you use AI for hiring and other employment decisions
- Decide when employees need to disclose they used AI, get approval to use AI, or both
- Provide a process for asking questions and reporting problems
- Ensure managers apply expectations around AI use consistently
Note that adding an AI use policy to your employee handbook isn’t a legal requirement for every business.
What Should an AI Policy for Employees Include?
Employees could use chatbots, writing assistants, meeting and productivity tools, browser extensions, and more for work. Some AI-powered apps and features may require approval from you, and employees may not be able to tell which are AI-powered and which aren’t.
To protect your business, outline clear expectations for using AI at work. Explain your policies in plain language that’s easy for employees to understand, and cover these topics:
- Approved AI tools
- Confidentiality
- Reviewing AI output
- AI-powered employment decisions
- Accuracy
- Disclosure
- Intellectual property
- Security
- Training
Employees should know:
- Which AI tools they can use
- What they can (and can’t) do with AI tools
- When they should get approval
- When they need to disclose that they used AI
- Who they can talk to for support if they have questions or run into a problem
When in doubt, err on the side of caution. And while the sections below offer language you can use, tweak these AI policy examples to fit your business.
1. Approved and Prohibited AI Tools and Use Cases
Outline which AI tools and accounts employees can use for work and what they can use them for. Depending on your business, employees may be able to use AI to:
- Write emails for internal use
- Summarize non-confidential documents
- Brainstorm ideas
- Create drafts of marketing content
- Organize notes
- Improve grammar and tone
- Help with research (so long as employees fact-check information on their own)
Consider including a list of AI tools employees can use, the jobs they’re okay to use AI for, the types of data they can input, and the person who can grant access or permissions if necessary.
Employees may use only company-approved AI-powered tools and accounts for approved business purposes. An approved AI-powered tool or account may not be suitable for all tasks or uses or with all types of information. Employees must get approval before using a new AI-powered tool or account or using an existing AI-powered tool or account for new business purposes.
2. Confidentiality and Data Privacy Rules
Next, lay out expectations around data privacy and sharing (or not sharing!) confidential company, customer, client, and employee information. While some AI-powered apps and features may be secure, that can depend on the app or feature’s terms of service, an employee’s account and app settings, and agreements between your business and the AI tool provider. That’s why it’s important for employees to follow your rules and processes around data privacy and AI-powered tools and accounts.
Here are some examples of confidential information that employees should avoid sharing with AI-powered apps and features:
- Customer, client, and contact names and information
- Employee names and personal information
- Employee compensation, benefits, and medical information
- Client or customer contracts
- Legal documents
- Financial information
- Trade secrets
- Proprietary processes and workflows
- Login information
- Any information protected by privacy, industry, or contractual rules
Employees must follow company policies around using AI-powered tools and accounts and must not input or share confidential, personal, regulated, or otherwise restricted information with an AI-powered tool or account unless the company has specifically given the OK for that combination of tool or account, task or use, and type of information. Approval to use a tool or account doesn’t mean employees can use it with any type of information.
Tie this section of your AI use policy for employees back to your acceptable use, data protection, confidentiality, and cybersecurity policies. If you used a template to start your employee handbook, double-check that the sections on these policies align with your AI policy to avoid giving employees mixed messages.
3. Human Review and Accountability
It’s important for employees to review and approve any AI-generated content before using or publishing it. Spell out which team members are responsible for reviewing AI-assisted work and situations when additional review and approval are necessary (like when work will be shared with customers, includes financial data or analysis, has legal implications, informs employment decisions, or will be shared outside the company).
Employees must review any AI-assisted work product for accuracy, quality, confidentiality, and appropriateness before using, submitting, publishing, or sharing. Team members follow standard company processes to get manager or subject-matter expert review and approval when necessary, whether or not they used AI to help with the work product.
Be as specific as possible here. For example, marketing content might require manager or team review and approval, while changes to HR policies may require legal review. And keep in mind that holding employees accountable for their use of AI doesn’t let your company off the hook!
4. AI Use in Hiring and Employment Decisions
Some businesses use AI-powered tools and algorithms to screen and rank résumés, analyze interview responses, monitor employee productivity and performance, and more. Before using AI in the workplace for employment decisions, figure out who can give the OK and the process team members will follow to get the nod.
Employees and managers must not use AI-powered tools or algorithms to make (or inform) decisions about hiring, promotions, pay, discipline, termination, and other employment decisions without approval following the company’s HR, legal, and technology review process.
Depending on the type of AI tool and where your business operates, you may need to follow additional laws and regulations. For example, New York City employers using certain automated employment decision tools must conduct annual bias audits, share summary information from audits publicly, and provide notice to candidates and employees. And California adopted regulations, effective October 1, 2025, clarifying how state antidiscrimination laws apply to AI and other automated decision-making systems used in employment decisions.
Colorado also enacted a new law in 2026 that supersedes the SB 24-205 framework. Some requirements begin January 1, 2027. Rather than relying on previous descriptions of the law, employers should refer to the current law and related resources for details and effective dates. Note that making AI subject to human review or prohibiting employees from using AI without company permission likely isn’t, standing alone, enough to comply with all requirements of these laws.
5. Accuracy, Bias, and Quality Control
AI can provide inaccurate, incomplete, or out-of-date information, and can include inappropriate, inaccurate, or biased content or references. Provide guidance about reviewing AI-generated information for accuracy, completeness, timeliness, and potentially discriminatory, biased, or otherwise inappropriate content. For example, encourage or require employees to check names, numbers, and other information for accuracy, verify dates and calculations, look up sources to make sure they’re real and back up what the employee wants to say, review customer and other personal information for accuracy against source documents, and check the information and tone for alignment with company policies and values.
Employees may especially want to follow these steps before using AI-generated content to respond to customers, in financial or other analytical reports, in technical directions, in customer- or public-facing content, or in content related to hiring, discipline, or other personnel matters. Employees shouldn’t, for example, rely on AI’s confident-sounding, but potentially erroneous, summary of company policy instead of checking the actual, current policy in the employee handbook.
6. Disclosure of AI Use
It isn’t enough to just tell employees to “be transparent” about their use of AI. Provide clear guidance about when they must disclose that they used AI to generate content, to whom they should disclose it, and how they should make the disclosure. This is especially important when employees use AI to:
- Prepare work product for clients.
- Draft published content.
- Prepare reports or other materials used to make business decisions.
- Generate creative works such as images or videos.
- Assist with performance reviews, hiring, or other employment decisions.
- Communicate with customers.
Different disclosure requirements may apply for different tasks. Depending on your company’s policies, client contracts, and applicable laws, you may want to have different expectations for employees’ minor use of AI, such as for spell-check or other editing assistance, and more significant use. Here’s an example disclosure policy:
Employees must disclose their use of AI in accordance with applicable law, client contracts, and Company policy as set forth in the [applicable policy/procedure]. Employees who are unsure about whether and how to disclose their use of AI should check with their manager/[other policy contact] before using AI-generated work product.
7. Intellectual Property and Ownership
Address intellectual property and copyright in your generative AI policy. Help employees understand that just because an AI tool spits out content, that doesn’t mean the content is original, cleared for commercial use, or owned exclusively by your company. For example, according to the U.S. Copyright Office, copyright protection for creative works requires sufficient human authorship, as merely entering prompts into a generative AI tool likely won’t be enough. No employee handbook policy is going to magically give your company copyright protection for works generated solely by AI.
Make sure your AI policy dovetails with your IP-related terms in contracts with employees, applicable laws about IP and copyright, your requirements about obtaining third-party permissions and licenses, and the terms of service of your approved AI tools. Also consider providing guidance about when additional review is appropriate, such as for client work product, published content, branding, and software.
8. Remote Work and AI Security
Employees may use AI tools even while they work remotely, on their personal devices, or through their personal accounts. Your policy should make clear that your AI use expectations and your confidentiality, data, and information security policies still apply when employees use AI remotely. Also, don’t forget about AI tools that employees might not even consider AI tools, such as browser extensions, transcription services, document integrations, and meeting assistants. Depending on how your employees use these tools, the tools may collect company data and confidential information.
You may want to include language such as the following:
Employees must abide by [the Company’s AI use policy and] all applicable data security, confidential information, and other related policies at all times, including when working remotely. Employees may use AI through personal accounts, on personal devices, or through integrations or browser extensions only if and to the extent expressly authorized under this policy for the relevant data/information.
Coordinate your guidance about devices and personal accounts with your remote work and technology use policies, and be sure to explain where employees can seek permission to use a device, tool, or account.
9. Training and Reporting
Finally, don’t forget to train your employees! An AI policy can only do so much, as your employees need to understand what tools they can and can’t use, when they can use AI, what data/information they can and can’t provide to AI tools, how to review AI-generated content, when they have to disclose their AI use, and whom to contact with questions or for approval. Tailor your training and examples to reflect your employees’ day-to-day tasks and responsibilities.
Make sure your AI use expectations also include:
- Information about reporting AI concerns or incidents, including inaccurate or biased AI outputs, suspected or actual policy violations, and requests to use AI inconsistently with your policy
- Instructions about how employees should report that they inadvertently disclosed confidential information to an AI tool and whom to contact, and consider spelling out what kind of information the AI contact person will need in order to evaluate the disclosure
- A designated AI point-person or monitored reporting mechanism for employees to report AI concerns
- Information for managers about consistent enforcement and when and how to escalate AI use concerns
How Often Should You Update Your AI Policy?
Generative AI is a rapidly evolving topic! Commit to updating your policy as laws and regulations change, generative AI use cases and capabilities evolve, your business needs and processes shift, and your employees’ job responsibilities change. You might consider:
- Building AI policy review into your regular employee handbook review process
- Revisiting your policy every time you:
- Add an AI tool or integration to your list of approved AI tools
- Find out that one of your approved AI tools has changed its terms of service, functionality, or data security or collection practices
- Begin using AI in employment processes, such as recruiting and hiring
- Experience a data security incident or receive reports of policy violations or other concerns that suggest your policy isn’t working
- Learn that your employees are using AI for new purposes
- Assigning responsibility for AI policy updates to a particular individual or team, along with responsibility for maintaining your list of approved AI tools
- Keeping track of policy versions and dates, alerting employees to significant policy changes, and making sure employees always have access to the latest version
How Handbooks.io Can Help
Wondering how to create an AI policy that employees will actually use? Start by making sure your policy answers the following questions: What AI tools can employees use? What information can they feed those tools? Who should review AI-generated content? And whom can employees turn to with questions? Incorporate your AI policy alongside your information security and confidential information policies, technology and internet use policies, remote work policies, and workplace conduct policies. Then, train your employees on their responsibilities.
Handbooks.io helps businesses create, customize, and manage employee handbooks that keep up with today’s workplace challenges, including AI use, data privacy, remote work, compliance, and employee expectations.
Ready to update your employee handbook for 2026?