New York City Adopts AI Law to Mitigate Potential Discrimination in Employment Decisions

November 19, 2021

The New York City Council adopted the first significant measure aimed at combating discrimination associated with the use of automated decision tools in hiring and promotion decisions, with several audit and reporting requirements for employers.  

The audit must include—but not be limited to—testing to ensure an automated employment decision tool does not have a disparate impact based on race, ethnicity, or sex for workers who are residents of New York City.  

Under the law, employers and employment agencies are required to:

  • Subject any automated employment decision tool to be used in hiring and promotion decisions to an impartial evaluation by an independent auditor no more than one year prior to its use; and

  • Prior to such a tool's use, post to the company website a summary of the results of the most recent bias audit of such tool as well as the distribution date of the tool.

Pre-assessment notice: The measure requires employers to notify employees at least 10 days prior to its use that an automated tool will assess them, as well as the job qualifications or characteristics that were the subject of the assessment.  Upon a written request from a worker, the employer must provide additional information regarding the data that the automated tool uses, if the information is not already on their website.  The notice is required to allow a candidate to request an alternative selection process or accommodation. 

Violations of the measure will result in fines of no more than $500 for the first violation and no less than $500 but no more than $1,500 for each subsequent violation.  A separate violation occurs for each day an automated decision-making tool is used in violation of the statute and each time an employer fails to provide the required notice to a job candidate or employee.   

Outlook:  Assuming it is signed by Mayor Bill DeBlasio, the bill will take effect on January 1, 2023. As employers seek talent in a difficult labor market, policymakers have increased scrutiny on automated technology used in the employment context.  At the federal level, the EEOC has launched an initiative to ensure that artificial intelligence and algorithmic decision-making tools “do not become a high-tech pathway to discrimination.”  Meanwhile, the White House launched an initiative to develop an “AI Bill of Rights,” with an emphasis on eliminating bias and “freedom from pervasive or discriminatory” workplace monitoring.  HR Policy will be weighing in on these discussions. 

EEOC Commissioner Keith Sonderling will join our Future Workplace Policy Council to discuss the use of AI in the workplace and the attending legal and compliance issues on December 1.  You can find registration information for the webinar here