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March 2023: NYC to Finalize Rules and Begin Regulating AI Employment Tools After Public Hearing

08 Mar


Update Applicable to:
All employers who utilize automated employment decision tools for hiring new employees in New York City, New York.

What happened?
On January 23, 2023, the New York City Department of Consumer and Worker Protection (DCWP) held a second public hearing on Local Law 144’s proposed rules to address several ambiguities related to key definitions and the scope of the law.

What are the details?
Local Law 144 applies to employers and employment agencies in New York City that use “automated employment decision tools” (AEDTs) to screen applicants or employees for promotional opportunities within the city. The law makes it unlawful to use an AEDT to screen candidates or employees for an employment decision unless:

  1. The AEDT is subject to an annual “bias audit” by an “independent auditor” before use; and
  2. The most recent bias audit results and the AEDT’s distribution date are published on the employer’s or employment agency’s website.

The law was enacted in December 2021 and was initially scheduled to take effect on January 1, 2023.

The DCWP published its initial proposed rules in September 2022 and held a public hearing in November. After receiving public comments, the DCWP published revised proposed rules on December 15, 2022, which prompted the second public hearing on January 23. While the DCWP initially stated they would begin enforcing Local Law 144 on April 15, 2023, they have since announced that they are continuing to review a “substantial volume of thoughtful comments” and plan to finalize the rules and “begin enforcement in the coming months.”

Below is are hyperlinks from one of our trusted sources that contain a summary of issues that received the most attention at the January 23 hearing. They provide insight into stakeholder concerns and questions the DCWP is grappling with before enforcement begins.

Narrowing the definition of AEDT

Independent auditors

Defining machine learning, statistical modeling, data analytics, or artificial intelligence

Other comments raised at the January 23 hearing

For more information, please see the links below:

Local Law 144

Proposed Rules

Article 1Article 2

What do employers need to do?
Employers should review the links provided above and should be on the lookout for any more news regarding this law. Vensure will continue to provide more updates once more information has been received.

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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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