Newly emerging artificial intelligence (AI) technologies can be a promising solution for streamlining certain employment practices and applicant hiring processes across a number of different industries. Historically, both federal courts and regulatory enforcement agencies have opposed the widespread use of AI tools, having scrutinized them under local, state, and federal anti-discrimination laws.
In what was welcome news for New York-based employers, the New York City Department of Consumer and Work Protection recently released a set of proposed rules that could dramatically reshape the hiring process and employment-based legislation that is still awaiting approval. For city employers heavily using Automated Employment Decision Tools (AEDT) for hiring, these proposed rules will provide initial guidance on the laws surrounding artificial intelligence, in hopes of clarifying the ambiguous AI law the city enacted in 2021 .
The law, which does not take full effect until January 1, 2023, prohibits employers from using any form of AEDT unless it has been subject to a bias audit by an independent auditor and full compliance with notification requirements. The proposed rules define an independent auditor as any “person or group not involved in the use or development of an AEDT”, but also clarify that an employer can use a bias audit on behalf of a supplier to comply with the requirements of the AI law. In addition, the law will prohibit employers from using AEDT in promotion decisions and will notify prospective applicants and current employees of the use of tools on all future job postings.
Simone Francis, an attorney at technology-based firm Ogletree Deakins, has noticed the growing prevalence of AI recruiting tools in the job market. “There has certainly been much debate about the ability of AI to potentially overcome biases, but the law is intended to put in place certain processes to ensure that AI is used in a way that does not lead to unintended outcomes, including outcomes that would violate existing anti-discrimination laws. New York City law specifically says you must have an independent audit, which means you cannot rely solely on the seller and the seller’s warranties. We are still trying to develop some understanding of what the city means by that,” said Francis, as reported by HR Executive.
However, the proposed rules do not explicitly address other important compliance issues that could affect city employers, including the exact requirements in the case of an employee opting out of an AEDT. In addition, employers are still uncertain whether the AI law requires bias audits to be updated annually or whether a single audit prior to using the tools is sufficient. Francis continues: “It is important to understand how AI tools are used. Employers need to find out because how they are actually used could lead to the application of this law in New York City or other jurisdictions in the future.