NYC steps into regulation of workplace artificial intelligence tools

New York City will become the latest jurisdiction to regulate an employer’s use of artificial intelligence (AI) and other “automated employment decision tools” in screening job candidates. The law is intended to curb bias in hiring and promotion decisions. Effective January 2, 2023, employers and employment agencies will be prohibited from using automated decision tools for screening employment or promotion candidates unless: (1) the tool has undergone an independent bias audit no more than one year prior to its use; and (2) certain information relating to the audit results is made publicly available on the employer’s or employment agency’s website. Additionally, companies will be required to notify employees or job applicants whether an AI tool was used to make employment decisions (amongst other notice requirements).

NYC’s law comes on the heels of the Equal Employment Opportunity Commission’s (EEOC) announcement in October 2021 of an initiative to examine how AI technology is “fundamentally changing” the way employment decisions are made. The EEOC’s initiative “aims to guide applicants, employees, employers, and technology vendors in ensuring that these technologies are used fairly, consistent with federal equal employment opportunity laws.”

At the state level, lawmakers are already focusing on AI technology’s use in employment settings. For instance, Illinois previously passed similar regulations to NYC’s law, and Maryland already passed a law that prohibits employers from using facial recognition software without a job applicant’s consent. Recently, Washington, DC, also proposed legislation that would address AI discrimination and would require companies to submit annual audits about their use of these technologies. Other states and cities may follow by enacting similar measures.

Employers would be wise to consult with experienced employment counsel to assess their use of AI technology for hiring and promotion decisions. We can assist in implementing procedures and policies to ensure compliance with applicable laws.