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April 2023: New York City Adopts Final Rules on Automated Decision-making Tools, AI in Hiring

27 Apr

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Update Applicable to:
All employers who utilize Artificial Intelligence (AI) for hiring and promotions in New York City.

What happened?
In a previous communication, we notified you that New York City’s Department of Consumer and Workplace Protection (DCWP) will not enforce Local Law Int. No. 1894-A regulates the use of automated employment decision tools (AEDT) in hiring and promotion decisions until April 15, 2023. This is an update for that communication.

What are the details?
On April 6, 2023, the DCWP adopted highly anticipated final rules implementing the city’s law regulating the use of automated employment decision tools (AEDT) tools in hiring that will take effect on July 5, 2023.

The AEDT law, which took effect on January 1, 2023, restricts the use of automated employment decision tools and artificial intelligence (AI) by employers and employment agencies by requiring that such tools be subjected to bias audits and requiring employers and employment agencies to notify employees and job candidates that such tools are being used to evaluate them.

The final rules come after the DCWP first proposed rules in September 2022, which it later revised in December 2022 after a public hearing. The final rules include several changes to earlier versions, including expanding the scope of “machine learning, statistical modeling, data analytics, or artificial intelligence,” modifying bias audit standards, and clarifying information that must be disclosed.

Below are some hyperlinks that contain detailed information on key subjects within the law, provided by one of our most trusted sources, Ogletree Deakins:

Automated Employment Decision Tools

Bias Audits

Sources of Data

Characteristics of an Independent Auditor

Bias Audit Summary Results

For more information, please see the links below:

Final Rules

New York City’s Department of Consumer and Workplace Protection (DCWP)

Local Law Int. No. 1894-A

Previous Vensure Communication (December 28, 2022)

Article 1Article 2

What do employers need to do?
Employers should review the links provided above and consider reviewing their use of automated decision-making tools or AI in making hiring and promotion decisions. If such devices are being used or are planned to be used, employers may want to consider whether the tools being considered have been subjected to bias audits.

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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