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July 2022: NYC Places Groundbreaking Restrictions on AI Use in Hiring Practices

26 Jul


Update Applicable to:
All employers who use AI decision-making tools in New York City.

What happened?
On December 11, 2021, the New York City Council passed a measure (“the NYC measure”), which imposes restrictions on automated decision-making tools.

What are the details?
Effective January 2, 2023, employers will be prohibited from using AI tools to:

  1. Screen job candidates for employment; or
  2. Evaluate current employees for promotion.

Employers may use the AI tools if it has been subject to a “bias audit” conducted not more than one year before using the tool.

Employers who utilize an employment decision tool must conduct a biased audit and publish a summary of the audit results on their websites. They must also notify all NYC employees and/or job candidates that:

  1. The tool will be used in connection with the assessment or evaluation of their employment or candidacy; and 
  2. Specify the job qualifications and characteristics the tool will use to assess or evaluate.

Utilizing an automated employment decision tool without a compliant bias audit exposes employers to civil penalties of up to $500 on day one, followed by penalties of $500 to $1,500 every day thereafter.  Failure to properly notify candidates or employees about using such tools constitutes a separate violation.

For more information, please see the links below:

The NYC Measure

Article 1Article 2

What do employers need to do?
Employers should review the links above and refrain from using AI decision-making tools during an assessment and evaluation of an employee or job candidate unless they conduct annual bias audits and share the results on their website.

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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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