New York City to require bias audits of automated employment tools

Introduction
Notice to job applicants and employees
Penalties for violation of the law
Comment

Introduction

By 1 January 2023, any employer in New York City that uses automated tools to screen job applicants must demonstrate that an annual bias audit has been completed to continue using such tools.

This law will require employers to arrange for an independent auditor to complete a yearly evaluation of automated tools that use machine learning, statistical modelling, data analytics or artificial intelligence to screen job applicants (eg, processing resumes and other information) to analyse the tool's potential to discriminate against candidates in protected groups, such as:

• race;
• age;
• sex; or
• national origin.

The law will also apply to automated tools used by an employer in decisions related to current employees, such as promotions.

Employers will be required to publish on their website a summary of the most recent audit results and the distribution date of the tool to which the audit applies.

Notice to job applicants and employees

No less than 10 business days before using an automated tool, an employer must inform a job applicant or employee of the following:

• an automated decision tool will be used in connection with the employment decision; and
• the types of qualifications and characteristics that such automated employment tool will use to assess the applicant or employee.

Once this information is disclosed to a job applicant or employee, an employer must give the applicant or employee an opportunity to request an alternative selection process. While the law requires that an employer provide this accommodation, it neither provides any specifics as to what this alternative selection process entails, nor states whether an employer must accept such a request or under what circumstances an employer is permitted to decline the request.

Further, if not already published on its website, an employer must, within 30 calendar days of a job applicant's or employee's written request, provide information about:

• the type of data collected for the automated employment decision tool;
• the source of such data; and
• the employer's data retention policy.

However, an employer cannot provide such information where such a disclosure would violate federal, state or local law, or where such disclosure would interfere with a law enforcement investigation.

Penalties for violation of the law

Failure to adhere to the requirements of this law may result in a fine of up to $500 for the first violation and up to $1,500 for each subsequent violation.

Comment

This law creates far more questions than it answers. It is expected that the NYC government will provide additional guidance, but not until closer to 2023. In the meantime, employers should evaluate their automated systems and determine whether they may be impacted by the new law.

For further information on this topic please contact Carolyn D Richmond, Glenn S Grindlinger or Timothy A Gumaer at Fox Rothschild by telephone (+1 212 878 7900​) or email ([email protected], [email protected] or [email protected]). The Fox Rothschild website can be accessed at www.foxrothschild.com.