The New York City Council recently enacted an ordinance prohibiting artificial intelligence (“AI”) in employment decisions unless the technology has undergone an independent audit of biases in the workplace. year of use.
Many employers have been using AI in employment decisions for years without regulation. This technology can range from algorithms finding ideal candidates to software used to assess a candidate’s performance during selection interviews. While AI tools promote efficiency, reduce costs, and can help employers make informed decisions, technology can run afoul of discrimination laws by reinforcing bias or weeding out applicants from classes. protected.
The law, which takes effect January 1, 2023, prohibits these unregulated practices in New York by requiring employers to obtain an independent audit of their automated tools within one year of use. Employers will be required to publish the results of the audit on their websites.
Additionally, employers must notify candidates who reside in New York within 10 days of using automated tools and detail the job qualifications and characteristics the tool will use to assess the candidate. Employers who fail to comply will be subject to a $500 fine for the first violation and a $1,500 fine for each subsequent violation. The penalty will then be multiplied by each day the problem is not resolved. These penalties can add up quickly, making it crucial for employers to review their automated employment tools before the law takes effect.
There are unanswered questions that the City must answer for a smooth implementation of this law. The law does not specify which independent persons or agencies are qualified to perform a “bias audit”, although many large employers validate similar types of pre-employment tools before using them for years.
Although the Municipal Office of the Company’s attorney is authorized to bring legal action to remedy violations of the new law, private lawsuits by injured parties are not expressly permitted. The law does not specify whether class action lawsuits could be brought, it is likely that the new law would promote the filing of such lawsuits as long as the AI tools would be used in accordance with uniform policies and practices.
Although NYC has not released any guidelines at this time, it is likely that further guidelines will be released before the law takes effect in January 2023. We will keep you posted on further developments.