Up until now, employers have been able to use artificial intelligence (AI)-powered hiring and promotional tools without worry about compliance with AI-specific laws. On July 5, 2023, that changed. New York City passed Local Law 144, legislation restricting employers’ use of artificial intelligence-driven employment tools.
Local Law 144 prohibits employers from using an automated employment decision tool (“AEDT”)[1] in hiring, promotion, and other employment decisions, unless the employer first ensures that the tool has been audited for bias within the preceding year. These AI-powered tools—ranging from programs that screen resumes for qualifications to those that assign scores to candidates based on mannerisms and responses in video interviews—are increasingly used by employers. However, AEDTs have generated controversy due to the potential for bias. Now, New York City employers are required to independently audit their AEDT systems for bias and publish the results on their company websites, or face fines. Local Law 144 also requires employers to provide job candidates with notice about the use of an AEDT system and offer them an opportunity to opt out. Employers found in violation of Local Law 144 face a $500 fine on the first offense and a $1,500 fine on each subsequent one.
New York City Local Law 144 comes amid a global push to regulate the use of AI and may provide a model for auditing rules that can be adopted in other jurisdictions. However, it does not provide any...
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