On April 6, 2023, the DCWP issued final regulations regarding the New York City Automated Employment Decision Tools Law (“AEDTL”).  Pursuant to the law, employers must conduct automated decision tool audits to confirm that such tools are not biased.  The new law went into effect on January 1, 2023, but the New York City Department of Consumer and Worker Protection (“DCWP”) deferred enforcement of the regulation to April 15, 2023. Enforcement of the law has now been further extended until July 5, 2023. 

Pursuant to the new law, before using AI 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.

Under the law, automated employment decision tools are defined as: “any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence…that issues [a] simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making for… employment decisions that impact natural persons.

The final regulations modify the definition of “machine learning, statistical modeling, data analytics, or artificial intelligence” to expand its scope by eliminating the requirement that the computer-based technique at issue refine “inputs and parameters . . . through cross-validation or by using training and testing data.” 

In addition, the final regulations require bias audits to indicate the number of individuals that the tool assessed that are not included in the calculations because they fall within an unknown category, and requiring that number to be included in the summary of results.

Employers have until July 5, 2023, to determine whether they use automated employment decision tools to make employment decisions, and if so, conduct an audit and publish a summary of the results. Employers should still begin to prepare now, as the audits can take weeks or months to complete.

We will continue to monitor developments regarding this new law. Should you have any questions or need assistance with the audit process, please contact Ali Law Group.

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