Artificial system

New York City Passes Law Restricting Use of Artificial Intelligence in Employment Decisions

December 27, 2021

Click for PDF

Effective January 1, 2023, employers in New York City will be banned from using artificial intelligence machine learning products in hiring and promotion decisions. Before the effective date, employers who already rely on these AI products can start preparing to ensure their use complies with the verification and notification requirements of the new law.

The new law governs the use by employers of “automated employment decision tools”, defined as “any computational process, derived from machine learning, statistical modeling, data analysis or data analysis. artificial intelligence, which delivers simplified output, including a score, classification or recommendation. , which is used to assist or substantially replace discretionary decision-making in making employment decisions that impact individuals. “

The law prohibits the use of such tools to pre-select a candidate or employee for a hiring decision, unless they have undergone a “bias audit” no later than one. year before use. A “bias audit” is defined as an impartial assessment by an independent auditor who tests, at a minimum, the tool’s disparate impact on individuals based on their race, ethnicity and gender. Notably, the new law does not define who (or what) is considered to be an adequate independent auditor. Nor does it address employers’ use of an automated employment decision-making tool that turns out to have disparate impact through a bias audit – not expressly prohibiting the use of such tools or authorizing their use if, for example, it has a significant relationship with an important business objective of the employer.

An employer is not permitted to use an automated hiring decision tool to select a candidate or employee for a hiring decision until it has made public on its website: (1 ) a summary of the tool’s most recent bias audit and (2) the tool’s release date.

The new law also includes two notice requirements, both of which must occur at least ten working days before an employer uses an automated employment decision-making tool. Employers interested in using such tools should first inform each candidate or employee who resides in New York that an automated employment decision tool will be used as part of a job assessment or assessment. ‘individual. The candidate or employee then has the right to request another selection process or accommodation. Employers should also inform each candidate or employee residing in New York City of the qualifications and job characteristics that the tool will use in their assessment.

Additionally, an applicant or employee may submit a written request for certain information if it has not been previously disclosed on the employer’s website, including: (1) the type of data collected for the automated hiring decision, (2) the source of this data, and (3) the employer’s data retention policy. Employers are required to respond within 30 days of receiving such a request.

The new law will be applied by the City and does not create a private right of action. It provides for potentially significant monetary penalties, including a fine of no more than $ 500 for an initial violation and each additional violation occurring on the same day, and penalties of between $ 500 and $ 1,500 for subsequent violations. Significantly, each day that an automated employment decision-making tool is used in violation of the new law is considered a separate violation. Failure to provide the required notice to each candidate or employee is also a separate violation.

* * *

The potential for learned algorithmic bias has recently been a topic of interest to legislatures and regulators. For example, on October 28, 2021, the EEOC announced a new initiative aimed at prioritizing and ensuring that artificial intelligence and other emerging tools used in employment decisions comply with federal civil rights laws.

The following Gibson Dunn attorneys helped prepare this client update: Danielle Moss, Harris Mufson, Gabby Levin, and Meika Freeman.

Gibson Dunn attorneys are available to answer any questions you may have regarding these developments. For more information on these matters, please contact the Gibson Dunn lawyer you normally work with, any member of the firm’s Labor and Employment practice group, or the following:

Danielle J. Moss – New York (+1 212-351-6338, [email protected])

Harris M. Mufson – New York (+1 212-351-3805, [email protected])

Gabrielle Levin – New York (+1 212-351-3901, [email protected])

Jason C. Schwartz – Co-Chair, Labor and Employment Group, Washington, DC (+1 202-955-8242, [email protected])

Katherine VA Smith – Co-Chair, Labor and Employment Group, Los Angeles (+1 213-229-7107, [email protected])

© 2021 Gibson, Dunn & Crutcher srl

Lawyer Advertising: The accompanying documents have been prepared for general information purposes only and are not intended to be legal advice.