New York City has passed the first law in the United States that will require employers to conduct audits of automated decision-making tools used to evaluate job candidates or employees. The law may have huge implications for employers and companies that develop such tools.

Starting on January 1, 2023 (one year from now), the law will require employers to conduct bias audits for software-driven tools that substantially assist in making decisions to hire or promote. The audits must be conducted by an independent auditor.

The new law also will require that a covered employer:

• Maintain a summary of bias audit findings on its website, and keep "information about the type of data collected for the automated employment decision tool, the source of such data and the employer or employment agency's data retention policy," which the employer would have to provide to the employee or candidate upon written request;
• Notify any employee or candidate who resides in New York City in advance about the use of such a tool, including "the job qualifications and characteristics that such automated employment decision tool will use in the assessment;" and
• Allow candidates/employees to request an accommodation from being subjected to the tool.

The City's department of consumer affairs will have enforcement authority. Employers that are not in compliance starting on January 1, 2023 will face daily fines for each violation ranging from $500 to $1,500. There is no private right of action in the...

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