New York City Will Soon Regulate the Use of Artificial Intelligence in Employment Decisions – Employee Rights/Labour Relations



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On January 1, 2023, New York City employers will have to comply with a new law aimed at preventing bias in artificial intelligence-based hiring tools. These tools, which include algorithms and software intended to find ideal candidates, have been criticized in recent years for their potential to unlawfully discriminate against protected classes.

Obligations of the employer

New York City law, Local Law Int. No. 1894-A, specifically regulates the use of “automated employment decision tools” in making employment decisions, including “any computational process, derived from machine learning, statistical modeling, data analytics or artificial intelligence, which issues a simplified output, including a score, classification, or recommendation, which is used to substantially assist or replace discretionary decision-making in making employment decisions that have an impact on individuals.

The law protects candidates and employees who interview and work in New York and provides that an automated employment decision tool cannot be used to screen such candidates for employment and promotion unless the tool : (i) has not been the subject of a “bias audit” carried out no more than one year before the use of such a tool; and (ii) a summary of the results of the most recent bias audit of this tool, along with the date the tool was distributed, was made public on the employer’s or agency’s website for before using this tool. A bias audit is an “unbiased assessment by an independent auditor” and includes, but is not limited to, “the testing of an automated employment decision tool to assess the tool’s disparate impact on people of any [gender, race and job level]must be declared by employers [on the Employer Information Report EEO-1] in accordance with
[federal law]. Notably, the law does not specify who or what qualifies as an “independent auditor.”

The law also requires that the employer or New York City employment agency meet certain notice requirements. First, the employer or employment agency must, no later than ten (10) days prior to such use, notify a candidate or employee who resides in New York (i) of their intention to use a Tool automated employment decision; and (ii) the professional qualifications and characteristics that this automated employment decision tool will use in evaluating that candidate or employee. The 10 day period is intended to give the candidate or employee time to request an alternative process or accommodation. However, the law does not require an employer or placement agency to provide an alternative process or accommodation. Second, if information about the type of data collected from the automated employment decision tool is not disclosed on their website, an employer or placement agency must make available to a candidate or an employee within 30 days of receiving a written request, the following: (i) information about the type of data collected for the automated employment decision tool; (ii) the source of the data collected; and (iii) the employer’s or employment agency’s data retention policy.

Penalties

Employers or employment agencies that violate this new law will face a civil fine of up to $500 for the first offense (and each additional offense occurring on the same day as the first offense), and a civil fine between $500 and $1,500 for each subsequent violation. . The law provides for separate violations (i) each day an automated employment decision tool is used in violation of the law; and (ii) whenever an employer or employment agency fails to provide proper notice under law. In other words, these relatively minor penalties can multiply daily for employers who do not correct problems that break the law.

Analysis and recommendations

There are several issues with this law that remain unclear. First, employers have no guidance on who or what to rely on to audit their automated employment decision tools to comply with the law. The only requirement is that the auditor be “independent”.

Second, these independent auditors have no guidance to ensure employers are complying with the law. At this time, the city has not issued any guidelines of its own. Employers and auditors can refer to the U.S. Equal Employment Opportunity Commission’s technical assistance document that covers artificial intelligence hiring tools, although it’s not currently known if the city intends to use these tips or post your own.

Third, the 10-day notice requirement appears, from the text of the law, to apply only to applicants or employees live inNew York (while the rest of the law appears to apply to any candidate or employee interviewing or working for a New York employer, regardless of residency). However, this limitation is probably negligible from a practical point of view, since the notification will most likely be made via the website of an employer or employment agency subject to the law.

Fourth, employers are not required to change the use of their automated employment decision tools simply based on a request from a candidate or employee, leaving an open question as to how these requests and responses will be processed or evaluated.

While we await the answers to these questions, we encourage New York City employers to ensure that all automated employment decision tools they intend to use in 2023 undergo a bias audit. by an independent auditor. The results of these bias audits should then be made available on New York City employer websites. We further encourage New York City employers to work with Labor Counsel to develop and implement practices consistent with the notice provisions of the new law.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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