Handbooks and AI-Use Policies · South Carolina

No generally applicable South Carolina or federal law requires a private employer to issue an employee handbook, and no South Carolina statute specifically regulates employers’ use of AI in employment decisions. But several laws require written policies or notices, and federal anti-discrimination law applies to decisions made with AI tools. The South Carolina employment lawyers at Bettis Law Group draft both for employers.

By Bettis Law Group, LLP · Columbia, South Carolina

Does South Carolina Require an Employee Handbook?

No generally applicable statute requires one, but a handbook is the practical home for the written policies and notices employers give employees.

It also carries a South Carolina risk: a handbook can create an implied employment contract, and for handbooks issued after June 30, 2004, S.C. Code § 41-1-110 sets the disclaimer that prevents it, as our at-will employment article explains. Handbook rules must also leave room for most private-sector employees to discuss pay and working conditions together, which the National Labor Relations Act protects even without a union; our article on handbook rules shows how the NLRB has read rules on arguing, recording and access to information.

The Written Policies the Law Requires or Rewards

FMLA Notice

A private employer engaged in commerce or an industry affecting commerce is covered by the Family and Medical Leave Act if it employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year (29 U.S.C. § 2611(4)). If it has eligible employees, it must put the FMLA general notice in any handbook or other written guidance on benefits or leave, or, lacking those, give it to each new employee at hiring (29 C.F.R. § 825.300(a)(3)).

Anti-Harassment Policy

When a supervisor’s harassment does not end in a tangible employment action such as discharge or demotion, an employer can defend a Title VII harassment claim by proving it used reasonable care to prevent and promptly correct harassment and the employee unreasonably failed to use the preventive or corrective opportunities it provided or to avoid harm otherwise (Faragher v. City of Boca Raton, 524 U.S. 775 (1998); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998)). A policy with a complaint procedure is not required in every case, the Court said, but the need for one “may appropriately be addressed in any case.”

Drug and Alcohol Testing

South Carolina’s workers’ compensation merit-rating system must include a premium credit, at least five percent unless the insurance director finds a smaller credit actuarially sound, for an insured in a program to prevent drug and alcohol use on the job. Under S.C. Code § 38-73-500, a qualifying program includes a substance abuse policy statement, employee notice and testing with random sampling; the insurer or the Department of Insurance sets certification details. The unemployment statute’s drug-use disqualification applies only if the company “has communicated a policy prohibiting the illegal use of drugs, the violation of which may result in termination” (S.C. Code § 41-35-120(3)).

Pregnancy Accommodation Notice

An employer covered by the South Carolina Human Affairs Law (15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year) must give new employees written notice, when employment begins, of the right to be free from discrimination for medical needs arising from pregnancy, childbirth or related medical conditions, and must conspicuously post it (S.C. Code §§ 1-13-30(e), 1-13-80(A)(4)).

Pay Terms, Leave and Posters

  • Pay terms. The Payment of Wages Act requires written notice at hiring of the normal hours and wages agreed upon, the time and place of payment and the deductions; the employer “has the option of giving written notification by posting the terms conspicuously at or near the place of work.” Changes need seven calendar days’ written notice (raises excepted). Employers with fewer than five employees at all times during the preceding 12 months are exempt from this notice rule (S.C. Code §§ 41-10-20, 41-10-30).
  • Civil Air Patrol leave. Since October 1, 2026, public and private employers must give employees who are Civil Air Patrol members at least 30 days of leave per calendar year for emergency service operations and at least 10 days per year for training, subject to the Act’s conditions, notice rules and exceptions, paid or unpaid at a private employer’s choice (2026 Act No. 250).
  • Posters. A handbook does not replace a covered employer’s duty to post the EEOC’s anti-discrimination notice and the FMLA notice (29 C.F.R. §§ 1601.30, 825.300(a)(1)).

Does a South Carolina Business Need an AI-Use Policy?

No law requires one, but AI tools are easy to use with company information, and employment laws apply however a decision was made.

What the Federal Agencies Say Today

  • EEOC. Its 2022 (ADA) and 2023 (Title VII) technical-assistance documents on AI are no longer on eeoc.gov; their pages return “not found.” In January 2025, Executive Order 14148 revoked the 2023 AI executive order, and Executive Order 14179 directed agencies to review actions taken under it and suspend, revise or rescind those inconsistent with its policy.
  • Department of Labor. Its 2024 AI principles page (dol.gov/general/AI-Principles) now shows “Page Not Found,” and the releases announcing them carry the department’s note that, as of January 20, 2025, information in some news releases may be out of date.
  • NLRB. On February 14, 2025, the Acting General Counsel rescinded the prior General Counsel’s electronic-monitoring memo (GC 23-02); no later memo replaced it.
  • Disparate impact. Executive Order 14281 (April 2025) directs agencies to deprioritize disparate-impact enforcement, and a June 2026 Justice Department legal opinion asserted that the EEOC’s Title VII guidelines are unconstitutional “because they contemplate liability based on disparate effects alone,” and read disparate-impact liability narrowly. That is an executive-branch position, not a court ruling, and it did not change the statute.

What Has Not Changed

None of this amended Title VII, the ADA or the ADEA, which apply whether a manager or software shaped a decision. Title VII still lets a plaintiff challenge a practice that causes a disparate impact, which the employer must then show is job-related and consistent with business necessity (42 U.S.C. § 2000e-2(k)). The ADA bars tests and selection criteria that screen out people with disabilities unless, as used, they are job-related for the position and consistent with business necessity (42 U.S.C. § 12112(b)(6)), and accommodation can include “appropriate adjustment or modifications of examinations” (42 U.S.C. § 12111(9)(B)).

South Carolina and Other States

As of October 2026, South Carolina has no enacted statute specifically regulating private employers’ use of AI in employment decisions. Since January 1, 2026, Illinois has made it a civil rights violation for an employer to use AI that has the effect of subjecting employees to discrimination on a protected basis, or to fail to notify employees that it uses AI for those decisions (Public Act 103-0804). Colorado repealed and reenacted its 2024 AI Act in May 2026; the new law applies to consequential decisions, including employment decisions, made on or after January 1, 2027 (SB 26-189).

What an AI-Use Policy Should Cover

  • Approved tools: which AI tools employees may use, who approves new ones and which uses are off limits.
  • Confidential information: no trade secrets, customer data, or personnel or medical information in public AI tools. A trade secret must be “the subject of efforts that are reasonable under the circumstances to maintain its secrecy” (S.C. Code § 39-8-20(5)(a)); an enforced rule helps show that.
  • Disclosure: when employees must say work was drafted with AI, and when the company tells applicants and employees it uses AI.
  • Human review: no hiring, promotion, discipline or termination decision rests on an AI output alone; a trained person reviews it, can override it and handles accommodation requests.
  • Vendors: ask how a screening tool was tested for adverse impact; the employer remains answerable for its decisions.
  • Records: keep AI-assisted screening results and reviewer notes with the hiring file. Employers covered by Title VII, the ADA or GINA must keep records having to do with hiring, promotion and termination for one year from the record or the action, whichever is later, and, once a charge is filed, relevant records until its final disposition (29 C.F.R. § 1602.14); FMLA and ADEA rules require three years for some records (29 C.F.R. §§ 825.500, 1627.3), so keep each record for the longest period that applies.

What Drives the Cost of a Handbook or AI-Policy Project

What moves the work: revising a handbook or starting fresh; headcount (counted for each working day in 20 or more weeks of the current or preceding year, 15 employees brings in Title VII and most Human Affairs Law claims, 20 the ADEA and state age claims, and 50 FMLA coverage); states with employees; union status; whether the AI work is a usage policy or a review of an AI hiring tool; and rollout (manager training, signed acknowledgments).

Frequently Asked Questions

Does my South Carolina business need an employee handbook? No generally applicable law requires one, but several federal and South Carolina laws require written notices and policies, and a handbook keeps them in one place. If you issue one, include a disclaimer that meets S.C. Code § 41-1-110.

Does my South Carolina business need an employee AI policy? No statute requires one, but a written AI-use policy keeps confidential information out of public AI tools and makes sure a person reviews any employment decision an AI tool informs.

Can an employee handbook create a contract in South Carolina? It can, unless it carries a disclaimer in the form S.C. Code § 41-1-110 requires.

Does South Carolina have a law on using AI in hiring? No enacted South Carolina statute specifically regulates employers’ use of AI in employment decisions. Federal anti-discrimination law still applies, and Illinois and Colorado have their own laws.

What does it cost to have a lawyer write an employee handbook? It turns on the drivers above: the starting point, headcount, states, union status, the AI work and rollout; we scope each project to the business.

Request an Appointment with a South Carolina Employment Lawyer at Bettis Law Group

For a first handbook, a review of an old one or an AI-use policy, the South Carolina employment lawyers at Bettis Law Group can help. To speak with one of our employment lawyers in confidence, call (803) 799-9311 or request an appointment online. You can also learn more about our employment law practice.

This article is general legal information, not legal advice, and does not create an attorney-client relationship. Federal and South Carolina employment laws change, agencies update their rules, and every situation turns on its specific facts. Consult a licensed South Carolina employment attorney about your business’s situation.