New York City to regulate use of AI in hiring and promotion

New York City will be the latest jurisdiction to regulate the use of artificial intelligence in the workplace. The City has just passed a law requiring employers to perform bias audits not more than one year before using automated employment decision tools in connection with hiring and promotion. The law goes into effect on January 1, 2023.

The law defines an automated employment decision tool as “any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence that is used to assist an employer in making a decision on an individual based on the score or recommendation calculated by the AI.” The law also defines an acceptable audit as “an impartial evaluation by an independent auditor that includes the testing of the tool to assess its disparate impact on persons of any federal EEO-1 component category.”

The law applies only to decisions related to a prospective candidate’s hire or promotion. It is unclear whether passive recruitment tools, such as ZipRecruiter’s or LinkedIn’s suggested jobs, are covered under the law.

The law prohibits an employer from using an automated decision tool to screen for hiring or promotion unless (1) the tool was subject to an independent bias audit no more than one year before its use, and (2) a summary of the audit results, as well as the distribution date of the tool to which the audit applied, has been made publicly available on the employer’s website.

An employer who uses an automated employment decision tool for hiring or promotions must notify each candidate who resides in New York City of the following at least 10 business days before the decision tool is used:

• That an automated employment decision tool will be used in connection with the assessment or evaluation, and that the candidate has the right to request an alternate selection process or accommodation.
• The job qualifications and characteristics that the decision tool will use in the assessment of the candidate.
• If not disclosed on the employer’s website, that the employer will provide to the candidate information about the type of data collected for the decision tool, the source of the data, and the employer’s data retention policy. The employer must provide this information within 30 days of the written request of the candidate. However, information may not be disclosed if the disclosure would violate federal, state, or local law, or interfere with a law enforcement investigation.

An employer may be subject to a $500 fine for a first violation, and up to $1,500 per offense for repeat violations.

For a printer-friendly copy, click here.