New York City Automated Employment Decision Tool Law

New York City Department of Consumer and Worker Protection

United States
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Private sector

Policy overview

The New York City Automated Employment Decision Tool Law, also known as Local Law 144, is a local law applicable in New York City that regulates the use of automated employment decision tools. According to the law employers and employment agencies are prohibited from using an automated employment decision tool unless the tool has been subject to a bias audit within one year of the use of the tool, the information about the bias audit is available for the public, and specific notices have been provided to employees or job candidates. The Law became effective on 5 July, 2023. 

The Automated Employment Decision Tool Law applies to both employers and employment agencies. Employers and employment agencies with a physical office located in New York City utilising an automated employment tool either for jobs based in New York City, or for remote positions where the designated location for such remote work in an office within New York City are covered by the law.

The automated employment decision tools (AEDT) that use of which the law regulates are defined as computer-based tools that use machine learning, statistical modelling, data analytics, or AI to aid employers and employment agencies in making employment decisions, that significantly reduce or replace discretionary decision-making. The requirements in the law apply when AEDTs are used to assess candidates for hiring and promotion. The New York City Department of Consumer and Worker Protection has clarified that the law does not apply where an AEDT is employed by an employer or employment agency for tasks such as scanning a resume bank, reaching out to potential candidates, or soliciting applications. This exemption is based on the definition of a candidate for employment as an individual who has applied for a specific position by submitting the required information or items in the format specified by the employer or employment agency.

The law requires employers and employment agencies to have their AEDT's undergo a bias audit, an impartial evaluation that must be conducted by an independent third party. This bias audit must at minimum include calculations of selection or scoring rates and the impact ratio across sex categories, ethnicity/race categories, and intersectional categories. Employers and employment agencies can rely on a bias audit for one year from the date it was conducted. This means that to be able to use an AEDT, employers and employment agencies must ensure the AEDT has had a bias audit within the past year. It should be noted that the vendor that created the AEDT is not responsible for a bias audit. Furthermore, employers and employment agencies are required to publicly share a summary of the most recent bias audit results, including audit date, data source, unknown category count, applicant details, selection rates, and impact ratios. Additionally, employers must notify employees and job candidates who are New York City residents about AEDT usage and the criteria it assesses at least 10 business days before employing the tool. Alternatively, this notice can be placed on the organisation's website for job seekers and included in a written policy for employees.

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