New York’s Artificial Intelligence Employment Practices Act Takes Effect January 1, 2023 | Greenberg PC Flaster
WHAT IS THE LAW FORBIDDEN?
Before we can discuss how this law applies, let’s start with what the law actually says.
The law prohibits employers or an employment agency from using a automated job decision tool pre-screen a candidate or employee for a job decisionunless:
- The tool has undergone Bias Audit;
- The Bias Audit was completed no more than a year before using this tool;
- A summary results of the most recent bias audit are made public on the employer’s website before using such a tool.
It is a fairly broad bill, and it requires a bit of unpacking before understanding the responsibilities of employers. Unfortunately, the law as written does not provide much guidance to employers. Let us try to dissect what the bill provides.
WHAT DO THESE WORDS MEAN?
Before discussing what this means for employers, let’s look at some definitions:
- Automated Employment Decision Tool (“AI Tool”) All the law revolves around automated job decision tools. The law provides the following definition:
…any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that generates simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision-making in making an employment decision that impacts individuals.
- Bias audit. As noted above, the law requires annual bias audits of the AI tool. As will be seen below, the definition leaves much to be desired and offers little guidance to employers.
The bias audit should include testing of the AI tool to assess the tool’s disparate impact on people of all Component 1 Category.
It’s semi-useful. The law applies to certain categories of employees identified by the EEOC. However, even a quick look at the Component 1 category reveals that the list is long. It makes more sense for employers to act as if the law applies to all hires, instead of passing judgment on every new position.
- Employment decision. This definition turns “hiring decision” into a verb and reads as follows:
The term “employment decision” means selecting job candidates or employees for promotions in the city.
This definition provides a bit more information. First, the law applies to internal promotions. Second, the law only applies to employment decisions made in the city. This means that the law only applies to hirings and promotions that take place in New York City, not out of town.
This law requires employers to provide notices to employees and applicants. Below is the text of the law accompanied by our commentary:
Any employer or placement agency that uses a [AI Tool] to filter a [employee/candidate] for a hiring decision must notify each of these employees or applicants who resides in the city of the following:
[NOTE: The law only requires employers to provide notice to individuals who live in New York City.
(1) That an automated employment decision tool will be used in connection with the assessment or evaluation of such employee or candidate that resides in the city.
[NOTE: Again, the notice only needs to be directed to individuals who live in New York City.]
(2) Such notice must be given at least 10 business days prior to such use and allow a candidate to request an alternative selection process or accommodation.
[NOTE: Employers may want to contemplate providing such notice in the job postings, promotion announcements etc.]
(3) The professional qualifications and characteristics that these [AI Tool] will use in the assessment of that candidate or employee.
(4) If not disclosed on the [employer’s website]information on the type of data collected for [AI Tool]the source of this data and the [employer’s] The data retention policy must be available upon written request from a candidate or employee. This information must be provided within 30 days of the written request.
The bottom line is that employers should be aware of and comply with these notice requirements. This is a sweeping law that has a significant impact on the hiring/promotion process in New York. It is important to note that employers who use compliant tools may still be breaking the law.
PENALTIES AND CIVIL REMEDIES
Violations of this law are punishable and give employees/candidates the right to bring civil actions. It is crucial that employers understand this law and prepare for the new year accordingly.