New York City Releases Final Rules on Automated Employment Decision Tools
New York City regulators have finalized rules implementing the city's law requiring bias audits of automated employment decision tools, publication of audit results, notice to employees, and other requirements.
On April 6, 2023, the New York City Department of Consumer and Worker Protection released final rules to implement Local Law 144 ("LL 144"). LL 144 prohibits any employer or employment agency from using automated employment decision tools ("AEDT") to screen job candidates for employment or evaluate employees for promotion unless the employer publishes a bias audit of the AEDT conducted within the previous year and provides certain notices to employees and candidates who will be screened by the AEDT.
An AEDT is a tool that uses artificial intelligence to issue "simplified output" to substantially assist or replace discretionary decision-making for employment decisions. The final rules clarify the scope of an AEDT by defining key terms such as "simplified output" and "machine learning, statistical modeling, data analytics, or artificial intelligence."
The rules also clarify requirements for conducting a bias audit, including: (i) how to calculate the selection rate, impact rate, or scoring rate; (ii) the types of data—historical or test data—used to conduct the audit; and (iii) the criteria for selecting an independent auditor. The audit must assess the AEDT's impact on individuals in the EEO-protected categories of race/ethnicity and gender, including intersectional categories. Multiple employers using the same AEDT may rely on the same bias audit if they provide historical data for the audit.
Employers must publish a summary of the audit results, including the source and explanation of the data used to conduct the bias audit, the number of applicants or candidates considered, the selection or scoring rates, the impact ratios for all categories, and the number of individuals the AEDT assessed who are not included in the calculations because they fall within an unknown category.
Employers also must provide notice to employees and candidates explaining that an AEDT will be used in the selection process, disclosing the job qualifications and characteristics used by the AEDT, and allowing the employee or candidate to request an alternative selection process or a reasonable accommodation.
Given the July 5, 2023, enforcement date, employers are encouraged to determine quickly whether they are using any AEDTs and, if so, ensure compliance with LL 144.
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