NYC will be watching: Is your AI hiring program compliant?

Many industries, including the financial sector, now routinely use artificial intelligence (AI) to make business decisions. Employers, employment agencies, and human resource vendors have used tools or applications that use AI (think Indeed) to assist them in screening, hiring, and promotion of individuals. Recently, several states and many municipalities, including New York City, have passed laws to ensure AI isn’t causing discriminatory outcomes in the hiring process. NYC Local Law Int. No. 1894-A, which takes effect on January 1, 2023, requires employers and employment agencies to show proof of an annual “bias audit” to use “automated employment decision tools” to screen candidates or employees. Read on to understand how the law will affect your hiring practices.

Bias audit required

The new law makes it “unlawful for an employer or an employment agency to use an automated employment decision tool to screen a candidate or employee for an employment decision” unless:

• Such tool has been the subject of a “bias audit” conducted no more than one year before its use; and
• A summary of the results of the most recent bias audit of such tool (as well as the distribution date of the tool) has been made “publicly available” on the website of the employer or employment agency before its use.

Key definitions