New York City Issues Proposed Rules Regarding Artificial Intelligence Bias Law

Late last year, New York City enacted a law governing employers’ use of automated employment decision tools (“AEDT”). Under the law, which takes effect January 1, 2023, New York City employers may not use an AEDT to screen candidates or employees for employment decisions unless the tool was subject to an independent bias audit within one year prior to use and the employer makes a summary of the bias audit publicly available. Further, New York City employers that use an AEDT must provide certain notices to covered employees or candidates prior to the use of such AEDT.  

The law defines an AEDT as a “computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making for making employment decisions that impact natural persons.” 

The New York City Department of Consumer and Worker Protection (“Department”) recently issued proposed rules addressing the following issues:

• Who is an “independent” auditor? Employers may only use an AEDT if the tools have been independently audited in the last year. The Department clarified that the independent auditor must be a person or group not involved in using or developing the tool at issue.
• Who is a “candidate for employment?” In order to be a candidate for employment, a person must have applied for a specific employment position by submitting the necessary information and/or items in the format required by the employer. Therefore, formal candidates are covered by the law, but potential candidates who express a general interest in a position without submitting the requisite application materials are not covered.
• How Does One Conduct a Bias Audit? Among other things, the independent bias audit must calculate the selection rate and the impact ratio.
  • Selection Rate: The rate at which individuals in a category are either selected to move forward in the hiring process or assigned a classification by an AEDT.
  • Impact Ratio: This is either (1) the selection rate for a category divided by the selection rate of the most selected category, or (2) the average score of all individuals in a category divided by the average score of individuals in the highest scoring category.
• How Should an Employer Make Bias Audit Results Publicly Available? Employers must post the results on the careers or jobs section of their website in a clear and conspicuous manner. The results must include the date of the most recent bias audit, a summary of the results (including the selection rates and impact ratios), and the distribution date of the AEDT to which the bias audit applies. Employers must keep a summary of the results and distribution date posted for at least six months after they last use an AEDT.
• How Should Employers Provide Notice to Candidates and Employees? Employers can provide notice on the careers or jobs section of their website in a clear and conspicuous manner at least 10 business days prior to use of an AEDT. Alternatively, employers may include the notice in a job posting or by mailing/e-mailing candidates at least 10 business days before using an AEDT.

Next Steps

The Department will hold a hearing on the proposed rules on October 24, 2022. The Department will then issue final rules, which may modify the proposed rules.

New York City employers should take steps now to determine: (1) whether their selection processes utilize an AEDT; and (2) if they are using an AEDT, that such use complies with the requirements in this new law, by the start of 2023.

Please feel free to reach out to any of our attorneys if you have any questions or would like our assistance in complying with New York City’s artificial intelligence bias requirements.

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