These considerations are of particular salience as
Complying with NYC Local Law 144
Before proceeding further, it is important to understand the basic contours of NYC Local Law 144, including which issues remain unsettled. As we discussed in our previous post, NYC Local Law 144 represents a first-of-its-kind law that regulates the use of AEDTs in the workplace. NYC's broad law, unlike narrow laws passed in other states such as
As a threshold matter, employers must recognize the myriad ways they may already be using AEDTs that fall within the ambit of the law. These could include resume scanners that utilize AI or machine learning to sort through and select candidates for further consideration based upon keywords and experiences that the employer believes may equate to success in the given position, software that measures an employee's aptitude for a certain job, or computer-involved monitoring software that evaluates employees' performance.
Apart from the question of which tools actually constitute AEDTs subject to the law, many other questions emerged following the passage of Local Law 144, such as (i) what must a "bias audit" include; (ii) who can qualify as an "independent auditor" capable of conducting the bias audit; (iii) what must the bias audit ascertain; and (iv) how much information must employers publish for employees and candidates? Notably, these questions persisted despite the
- AEDTs are tools "derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issue simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making." The proposed rules explain that AEDTs meet the "substantially assist or replace discretionary decision making" standard if they are: (1) the sole factor in an employment decision, (2) more heavily weighted among several other factors, or (3) used to overrule conclusions derived from other factors. Some public commenters noted that this proposed standard is more restrictive than lawmakers had intended and could subject fewer AEDTs to the law's requirements.
- The law makes clear that bias audits for AEDTs must be conducted by "independent auditors." The proposed rules state that an independent auditor must be "capable of exercising objective and impartial judgment" and cannot be involved in using, developing or distributing the AEDT; have an employment relationship with an employer/agency that uses, or vendor that developed or distributes, the AEDT; or have a direct or material indirect financial interest in an employer/agency that uses or vendor that developed or distributed the AEDT.
- The proposed rules state that employers using the same AEDT can rely on a single bias audit covering multiple employers, so long as each employer using the AEDT provides historical data to the independent auditor or can explain why such data is not available. "Historical data" in this context means "data collected during an employer['s] use of an AEDT to assess candidates for employment or employees for promotion."
- Regarding accommodation, notice and publication requirements, while employers using AEDTs must provide notices allowing individuals to "request an alternative selection process or accommodation" if one is available—the new law does not create new accommodation rights.
There are still open questions as to the jurisdictional reach of the law as well. Local Law 144 defines "employment decision" to mean screening "candidates for employment or employees for promotion within [
Using Local Law 144 as a Tool to Advance DE&I Objectives
A key legislative purpose behind the required bias audit is to ensure that AEDTs are being utilized in a manner that does not violate
Of note, the bias audit actually affords employers an opportunity to review and scrutinize how a given AEDT works in practice and make corrections based on the results of a given audit. Of course, these corrections may be essential to avoiding potential alleged violations of the City's Human Rights Law (i.e., claims of disparate impact or disparate treatment discrimination), but they could also ensure that the AEDT is actually useful to the employer. In annually auditing a given AEDT, employers should also review the metrics and data they are using to ensure that the AEDT is properly aligned with the employer's goals and objectives and is actually working to improve diversity goals in the decision-making processes. Indeed, these tools are intended to assist employers in making employment decisions. Thus, employers should take the bias audit requirement as an opportunity to not only advance their own DE&I goals, but also to ensure that AEDTs are actually working as intended by helping employers select qualified, diverse candidates via better, more informed choices.
What Should Employers Do Now?
The guidance in this area continues to evolve. Government enforcement agencies, including the EEOC, have taken note of these trends and have eyed workplace AI tools with increased scrutiny. For instance, as noted in the EEOC's
Employers must heed these developments and work with their trusted advisors to audit their use of AEDTs and organize their workplace data in a manner that will facilitate legal compliance. NYC employers that are already using automated technologies in their employment decision-making processes, or plan to implement them in the workplace in the future, should consider taking the following actions:
- Review NYC Local Law 144 and the proposed rules to understand new compliance obligations, and monitor changes in the law and related agency guidance.
- Assess which categories of automated tools and technologies the employer uses in its workplace decision-making schemes, and determine with counsel whether these tools are legally compliant.
- Incorporate counsel in the bias audit process to ensure attorney-client privilege protection where possible.
- Organize job descriptions and workplace demographic data in a manner that facilitates proper training of algorithmic tools (e.g., by ensuring that the appropriate "success" variables inputted for these tools are not proxies for impermissible discrimination) and periodically test tools to confirm they do not create a disparate impact.
- Adhere to applicable legal requirements for requests for accommodation throughout these processes.
- Devise prudent recordkeeping procedures to demonstrate compliance with applicable laws and NYC Law 144's requirements.
- Work with third-party vendors, including AEDT vendors, to ensure their compliance with the new law and make any desired updates to service agreements.
- Train Human Resource professionals and other managers involved in hiring and employment decision-making processes to ensure they are familiar with the new legal requirements and to address any issues that may arise with implementation.
- If the employer is utilizing AEDTs, ensure that notices are effectively provided to any candidates or employees, where appropriate.
Parting Words
In recent years, our workplaces have evolved to meet certain challenges and new realities. Employers continue to navigate remote and hybrid work arrangements, talent wars, generational shifts, data privacy concerns for workers, and an increasingly pointed focus on diversity, equity and inclusion initiatives and ESG (Environmental, Social, and Governance) considerations in the workplace. The proliferation of AI and various automated employment decision tools are just the most recent workplace development. Employers now utilize technologies to increase worker productivity, improve team communication, and streamline services, and increasingly, these technologies are used to aid recruitment, interviewing, hiring and retention processes. AI and related technologies can be a boon to employers in these areas, but, they are not issue-free. Against the backdrop of the EEOC's focus on this issue, the developing legal infrastructure governing the use of AI and AEDTs, and an ever-increasing body of knowledge concerning how these tools work, it is incumbent upon employers to deploy these tools thoughtfully and with intent. Taking a holistic approach to the integration and use of these tools into workplace decision-making is imperative.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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