New York City Regulates Workplace Artificial Intelligence

NEW YORK CITY REGULATES WORKPLACE ARTIFICIAL INTELLIGENCE – RECRUITMENT AND SELECTION TOOLS:

On November 10, 2021, the New York City Council approved a measure, Int. 1894 – 2020A (the "Bill") to regulate employers' use of "automated employment decision tools" with the aim of reducing bias in hiring and promotions, joining Illinois and Maryland. The Bill, which is awaiting Mayor DeBlasio's signature, is to take effect on January 1, 2023.

Automated Employment Decision Tools:

The Bill defines “automated employment decision tools” as “any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence” that scores, classifies, or otherwise makes a recommendation that is used to substantially assist or replace the decision-making process from that of an individual. The Bill exempts automated tools that do not materially impact individuals, such as a junk email filter, firewall, calculator, spreadsheet, database, data set, or other compilation of data.

The Bill only applies to decisions to screen candidates for employment or employees for promotion within New York City and does not apply to other employment-related decisions.

Employer Requirements under the AI Bill:

The Bill prohibits employers or employment agencies from using the automated decision tools to screen candidates or employees for employment decisions with certain exceptions.

The Bill defines an acceptable "bias 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 1 category, "i.e., whether the tool would have a disparate impact based on race, ethnicity, or sex.

Moreover, New York City employers using automated employment decision tools must notify each employee or candidate who resides in New York City of their use of the tool. Failure to comply may result in penalties.