Yesterday (July 5, 2023), enforcement of New York City's AEDT law (Local Law 144 of 2021) went into effect, regulating the use of automated employment decision tools (AEDTs) in hiring and promotion. The law requires employers to notify job candidates and employees of their use of AEDTs, to conduct annual bias audits of the tools, and to publish the results of the audits.
What is an AEDT?
An AEDT is any tool that uses an algorithm to make an employment decision. This can include tools that screen resumes, score job candidates, or make hiring recommendations.
The law applies to all AEDTs that are used to make employment decisions in New York City. This includes tools that are used by employers, employment agencies, and staffing firms.
What are the requirements of the law?
The law has three main requirements:
- Notification: Employers must notify job candidates and employees at least 10 business days before they are screened with an AEDT. The notice must include information about the tool, how it works, and how the candidate or employee can request an alternative selection process.
- Bias audit: Employers must conduct an annual bias audit of each AEDT that they use. The audit must be conducted by a third-party company that is certified by the New York City Department of Consumer and Worker Protection (DCWP). The audit must assess the tool for disparate impact on the basis of race, ethnicity, sex, and other protected categories.
- Public disclosure: Employers must publish a summary of the results of each bias audit on their website. The summary must include information about the tool, the findings of the audit, and any corrective actions that the employer has taken.
What are the penalties for non-compliance?
Employers who violate the law can be fined up to $25,000 per violation. The DCWP can also order employers to take corrective action, such as disabling the AEDT or providing training to employees on how to use the tool without bias.
Impact of the Law
The law is designed to prevent AI hiring tools from discriminating against job candidates on the basis of race, ethnicity, sex, or other protected categories. It also requires employers to be transparent about their use of AI tools and to take steps to ensure that the tools are fair and unbiased.
The law has been praised by civil rights groups and advocates for fair hiring practices. However, some employers have expressed concerns about the cost and complexity of complying with the law. It is still too early to say what the long-term impact of the law will be.
The New York City regulations on AI in hiring tools are an attempt to fight against discrimination in the workplace. The law requires employers to be transparent about their use of AI tools and to take steps to ensure that the tools are fair and unbiased. These regulations are designed to ensure that all job seekers have an equal opportunity to be considered for employment, regardless of their race, ethnicity, sex, or other protected characteristics. Employers with a presence in New York City that leverage AEDTs in their hiring or promotion practices should ensure they are complying with these regulations.