As artificial intelligence tools are rapidly adopted by businesses, New York City's law aims to prevent bias in employment decisions.
On Wednesday, new legislation focused on AI-driven employment tools went into effect in New York City, prohibiting employers and agencies from using automated employment decision tools (AEDTs) unless the tool has undergone a bias audit within the last year.
The new rules, under 2021 Local Law 144, are designed to prevent bias and ensure fairness in employment decisions using AI.
In addition to the one-year audit window, New York City Department of Consumer and Worker Protection (DCWP) rules require that audit results be made available to the public, and that appropriate notice must be provided to employees and job applicants.
Automated employment decision-making tools can assist or replace discretionary decision-making. Examples of these tools include Freshworks, Breezy HR, Greenhouse, and Zoho Recruits, which can screen or pre-screen resumes.
“DCWP will collect and investigate [bias] complaints,” a department spokesperson told Decrypt via email. “Civil penalties for violations will be calculated on a case-by-case basis,” the agency added, explaining that the law allows for a separate violation to be filed for each day that AEDT use is illegal.
In June, business review site B2B Reviews reported that 21% of HR departments surveyed used AI tools like OpenAI’s ChatGPT for training and development, saving an average of 70 minutes per week. One in 10 HR departments also said they used chatbots to draft termination letters.
“In developing the AEDT rules, we strive to strike the right regulatory balance between job seekers’ rights and the needs of businesses, as reflected in our rulemaking process,” the spokesperson said.