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

26 Jul

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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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