NYC’s New AI Bias Law Is In Effect. Here’s What It Entails
Source: Reworked, Erica Sweeney
Photo: Colin Lloyd on Unsplash
New York City has enacted a new law aimed at bringing more transparency to the use of automated employment decision tools (AEDT), including artificial intelligence. The goal is to ensure there’s no unfair bias or discrimination in hiring new candidates or promoting existing employees when these technologies are used.
Local Law 144 requires an independent bias audit on an AEDT before it can be used, and that job candidates and employees be notified if a tool is used in their hiring or promotion. Enforcement of the law began July 5, and those who don’t comply face a penalty of up to $500 for their first offense.
“This is a landmark law,” said Saira Jeanie, deputy executive director of the Data & Trust Alliance, a nonprofit guiding the responsible use of data and AI. She believes it will help organizations make certain that they’re adhering to their diversity, equity and inclusion (DE&I) agendas.
“What you don’t want is to have a tool that you’re using for hiring go haywire, go farther away from your DE&I goals than closer to it,” she explained. “The problem with these kinds of automated decision tools is oftentimes, you don’t know what’s going on. So, by doing that bias audit, you have a little more transparency so you can meet your DE&I goals.”
The law comes as more companies embrace automation tools to make employment decisions, including recruitment and hiring. It’s therefore not surprising that the automation tools are facing more scrutiny over the possibility that they could foster discrimination and hinder an organization’s diversity, equity and inclusion efforts.
As the use of AEDTs expands, human resources experts say more cities and states will likely pass similar laws. Experts say although it’s a little too early to tell how the new law will affect the companies that use AEDT in their hiring, those companies will be paying attention and learning from how it works in New York City.
What Local Law 144 Entails
The law defines AEDT as a computer-based tool that uses machine learning, statistical modeling, data analytics or artificial intelligence that helps employers and employment agencies make employment decisions and replaces or aids “discretionary decision-making,” according to DCWP.
New York City-based employers and employment agencies that use AEDTs must now conduct a bias audit of the tool every year and publish the results. The audit is an “impartial evaluation by an independent auditor,” DCWP said, and the evaluation must include scoring rates and the impact ratio across sex, race, ethnicity and intersectional categories.
The audit should be conducted based on historical data, which has been collected during the AEDT’s use. But employers can use test data if there isn’t sufficient historical data available; DCWP hasn’t yet set requirements for test data.
While there are already federal, state and city anti-discrimination laws that employers must follow, New York City’s new law ensures that using automation tools doesn’t lead to discriminatory results.
Robert Toole, founding partner of Kona HR Consulting in New York City, said he believes the law will mostly affect larger employers who regularly attract hundreds of applicants for open positions and can afford to use AEDTs, which can be costly.
“A company that wants to use this process is going to have an expense because they’re going to have to hire someone to do the bias audit,” he said.
The NYC Department of Consumer and Worker Protection (DCWP), which is enforcing the law, just released Frequently Asked Questions offering guidance, but Toole said he hopes the city will release additional guidance, such as a sample audit process, to help organizations.
“If you’re using one of these tools, you want to make sure your bias audit has some sort of city seal of approval before you start, to make sure you’re completely compliant,” he said, noting that DCWP said it doesn’t approve independent auditors.
Corinne Jones, president of CJC Human Resource Services in New York City, speculates that many organizations will develop their own systems and protocols for the bias audit until the city releases more parameters.
“For the time being it’s rather ambiguous,” she said, adding that most of the companies that she works with don’t use AEDTs.
Keeping Job Candidates Informed
Another aspect of the law aimed at boosting transparency is that employees and job candidates, who are New York City residents, must be notified that their current or prospective employer is using an AEDT and what qualifications or characteristics the AEDT is assessing.
DCWP says notice should be posted 10 days before an AEDT is used, and the notice should be included in a job posting or sent by email or mail.
“I think the pretty standard process right now would be to inform applicants via the job ad itself, no different than when the compensation requirement posting in New York City rolled out,” Jones said. But DCWP says employers should also post it in the employment section on their websites.
If an organization is using AI internally, Jones said they should include it in their employee handbook or standard policies.
Complaints regarding the new law can be made by calling the city’s 311 system or at nyc.gov/dcwp. Any AEDT-related discrimination claims should go to the NYC Commission on Human Rights.
https://www.reworked.co/talent-management/nycs-new-ai-bias-law-is-in-effect-heres-what-it-entails