Key Highlights:

• A recent amendment expressly codifies disparate impact liability under the New York State Human Rights Law (NYSHRL) for employment discrimination claims. This comes as the U.S. Equal Employment Opportunity Commission has backed away from disparate impact theories in enforcing federal employment discrimination statutes.
• The increasing use of Artificial Intelligence (AI) tools in personnel processes and decision-making has the potential to raise disparate impact issues to the extent that AI processes have varying effects on specific groups.
• New York employers may face increased potential exposure from neutral employment practices, underscoring the importance of proactive review and documentation.

New York Governor Kathy Hochul signed Senate Bill S8338 on Dec. 19, 2025, which codifies that a facially neutral employment practice may violate the New York State Human Rights Law (NYSHRL) based on its discriminatory effects, even absent discriminatory intent. While the amendment l largely clarifies existing law, it comes at a time when federal enforcement of disparate impact theories has become less certain, as the U.S. Equal Employment Opportunity Commission has taken a more restrained approach to pursuing disparate impact claims under federal employment discrimination statutes. Against that backdrop, the amendment underscores the continuing importance of state-law compliance and employer attention to outcome-based employment practices, as well as the...

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