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NYC Targets Artificial Intelligence Bias in Hiring Under New Law

Dec. 10, 2021, 10:41 AM

New York City has a new law on the books—one of the boldest measures of its kind in the country—that aims to curb hiring bias that can occur when businesses use artificial intelligence tools to screen out job candidates.

Employers in the city will be banned from using automated employment decision tools to screen job candidates, unless the technology has been subject to a “bias audit” conducted a year before the use of the tool.

The New York City Council passed the measure on Nov. 10. Without the signature from Mayor Bill de Blasio, it “lapses” into law after 30 days, which falls on Friday. The mayor said he supports the law. It takes effect Jan. 2, 2023.

Companies also will be required to notify employees or candidates if the tool was used to make job decisions. Those that don’t comply could face a $500 fine for first violations and up to $1,500 for subsequent violations.

The use of artificial intelligence for recruitment, resume screening, automated video interviews, and other employment tasks has for years been on the radar of federal regulators and lawmakers, as workers began filing allegations of AI-related discrimination to the U.S. Equal Employment Opportunity Commission. The EEOC recently signaled it would delve in into artificial intelligence tools and how they contribute to bias.

Illinois previously passed a measure similar to New York City’s to crack down on the use of such technology in employment decisions. Maryland also passed a measure that prohibits employers from using facial recognition technology without job applicants’ consent.

The attorney general in the Washington, D.C. announced Thursday proposed legislation that would address “algorithmic discrimination” and require companies to submit to annual audits about their technology.

Automated employment decision tools refer to technology that uses machine learning, statistical modeling, data analytics, or artificial intelligence to score or classify job seekers and replace some discretionary decisions by employers, the New York lawmakers say.

A bias audit is an impartial evaluation by an independent auditor, who would test the tool’s disparate impact—a neutral policy that could lead to discrimination against protected groups on the basis of race, age, religion, sex, or national origin.

To contact the reporter on this story: Erin Mulvaney in Washington at emulvaney@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com