Effective January 1, 2023, employers in New York City will be banned from using automated employment decision tools (such as artificial intelligence) to screen job candidates unless the technology has been subject to a “bias audit,” making this law the first of its kind in the nation.

Automated employment decision tools that fall within the scope of the law are defined as computational processes that issue simplified outputs (e.g., scores) that are used to “substantially assist or replace discretionary decision making for making employment decisions . . . .”

Before using such tools, employers must conduct a bias audit, defined as an impartial evaluation by an independent auditor that evaluates the relevant tool for its disparate impact on the basis of race/ethnicity and sex, within one year before the tool is used. Employers must then publish the results of the audit and the distribution date of the tool subject to the audit on their public website.

Employers will also be required to disclose to “employees and candidates that reside in the City” who apply for a position or promotion that such a tool will be used in the assessment or evaluation of such individuals at least 10 business days before the tool’s use and allow a candidate to request an alternative selection process or accommodation.

In addition, employers must also notify “employees and candidates that reside in the City” about the job qualifications and characteristics that the decision tool will be used in the assessment of such candidate or employee at least 10 business days before use. Candidates and employees who reside in the City are entitled to, within 30 days of written request, information about the type of data collected for the decision tool, the source of such data, and the employer or employment agency’s retention policy.

Violations of the law could result in a $500 fine for the first violation and up to $1,500 for subsequent violations, and enforcement is vested in the corporation counsel or such other persons designated by the counsel.