New York City Law Regulating the Use of Artificial Intelligence in Employment Decisions | Bond Schoeneck & King SARL

On November 10, 2021, the New York City Council passed a bill that regulates the use by employers and employment agencies of “automated employment decision tools” to make employment decisions. job. The bill was returned without Mayor Bill de Blasio’s signature and became law on December 11, 2021. The new law takes effect on January 1, 2023. This new law is part of a growing trend to review and regulate the use of artificial. intelligence (AI) in hiring, promotion and employment decisions.

Requirements of the new law. The new law regulates the use by employers and employment agencies of “automated employment decision tools” for applicants and employees residing in New York. An “automated employment decision tool” refers to “any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that emits a simplified output, including including a score, classification or recommendation, which is used to assist or replace discretionary decision-making in making employment decisions that impact individuals.

The new law prohibits an employer or employment agency from using an automated employment decision tool to make an employment decision unless, before using the tool, the following conditions are met : (1) the tool has undergone a bias audit within the past year; and (2) a summary of the results of the most recent bias audit and tool distribution data have been made publicly available on the employer’s or agency’s website for the job. A “bias audit” is defined as “an unbiased assessment by an independent auditor”, which includes “the testing of an automated employment decision tool to assess the tool’s disparate impact on people of any category of Component 1 to be reported by employers pursuant to 42 USC § 2000e-8(c) and 29 CFR § 1602.7.

The new law also requires employers and placement agencies to meet two notice requirements. First, at least 10 business days prior to using the tool, the employer or employment agency must notify an applicant or employee who resides in New York of the following: (1) that an automated employment decision tool will be used to assess the candidate or employee; and (2) the professional qualifications and characteristics that the tool will use in the assessment. The employer or employment agency must allow the applicant or employee to request an alternate process or accommodation. However, the law is silent on the obligation of the employer or employment agency to provide such an alternative process or accommodation. Second, the employer or employment agency must disclose on its website or make available to an applicant or employee within 30 days of receiving a written request, the following information: (1) information about the type of data collected for the automated employment decision tool; (2) the source of the data collected; and (3) the employer’s or employment agency’s data retention policy.

Penalties for Violations. Violations of the new law will result in civil liability of up to $500 for the first violation and each additional violation occurring on the same day as the first violation, and a civil penalty between $500 and $1,500 for each subsequent violation . It is important to note that each day the automated employment decision tool is used in violation of the law constitutes a separate violation and failure to provide any of the required notices constitutes a separate violation.

Recommendations for timely compliance. Employers with applicants or employees residing in New York can take several steps now to facilitate compliance with this new requirement when it takes effect on January 1, 2023. Employers should ensure that any decision-making tool covered automated job that they plan to use in 2023 or later to assess New York City applicants and employees is subject to a bias audit by an independent auditor and the results of this audit are available on their website. In addition, we recommend that employers and placement agencies work with their legal counsel to develop and implement practices consistent with the notice provisions required by the new law.

Other regulations on automated employment decision tools. Several states and cities have passed or are considering similar laws regarding the use of artificial intelligence and other technologies in employment decisions. For example, the Illinois Artificial Intelligence Video Interviewing Act, which went into effect January 1, 2020, requires employers using AI interviewing technology to provide notice and an explanation of the technology to contestants, obtain contestant consent to use technology, and comply with restrictions on the distribution and retention of videos. Similarly, Maryland enacted a law effective October 1, 2020, that requires employers to obtain written candidate consent and a waiver before using facial recognition technology in pre-employment interviews. hiring. California and Washington, DC have also proposed legislation that would address the use of AI in the context of employment.

Additionally, on October 28, 2021, the U.S. Equal Employment Opportunity Commission (EEOC) launched a new initiative to ensure that artificial intelligence and other technological tools used to make employment decisions of employment comply with federal civil rights laws. As part of its initiative, the EEOC will gather information on the adoption, design, and impact of employment-related technologies, and provide technical assistance to provide employers with guidance on algorithmic fairness and use of artificial intelligence in employment decisions.

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