As you may recall, we previously reported about the Equal Employment Opportunity Commission’s guidance addressing how employers’ use of artificial intelligence (“AI”), algorithms, and software in hiring and employment practices may be at risk for violating the Americans with Disabilities Act (“ADA”). The document also provides practical tips to employers on how to comply with the ADA when utilizing these tools. See the alert here.
 
Now, New York City has become one of the first jurisdictions to pass a local ordinance that protects individuals from unlawful bias by the employer when automated employment decision tools are used. Pursuant to the law, employers must conduct AI tool audits to confirm that such tools are not biased. The results of those audits must be published on publicly-available websites. Furthermore, the employer is required to disclose the data that the AI tool collects either by disclosing it publicly or in a response to an inquiry. The new law will go into effect on January 1, 2023,
 
New York City employers using Automated Employment Decision Tools will also need to provide certain notices to applicants. Employers will need to notify applicants at least 10 days in advance that the AI tool will be used and must allow the applicant to request a different testing/screening method. The employer must also give notice of the characteristics that the AI tool will assess, the types of information that will be collected, and how that information will be retained by the employer. The law will be enforced by New York City’s Office of the Corporation Counsel. Non-compliance could result in a $500 fine for the first violation, and $1,500 for each subsequent violation. 
 
While the law only applies to New York City employers at this time, all employers should be aware of this trend addressing the use of AI in the hiring process, as it may be indicative that more jurisdictions state and nationwide will adopt such restrictions. Should you have any questions regarding the new law, please contact Ali Law Group.