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Update: Effective Date of NYC Law Regulating the Use of AI in Employment Decisions Pushed Back

Due to significant interest generated by the proposed rules, the New York City Department of Consumer and Worker Protection (DCWP) postponed a hearing originally scheduled for October 24, 2022, in order to designate a virtual platform that could accommodate a larger number of participants. The rescheduled hearing, which was held on November 4, 2022, attracted more than 270 attendees. In addition, the proposed rules generated a high volume of written comments. As a result, the DCWP will conduct another public hearing and will not enforce the law until April 15, 2023, postponing the original effective date of January 1, 2023.

Background on the Law

The law prohibits New York City employers or employment agencies from using an automated employment decision tool to screen a candidate or employee for an employment decision unless:

  • The tool has been the subject of a bias audit within the last year; and
  • The results of the most recent bias audit of the tool have been made publicly available on the employer or employment agency’s website prior to the use of the tool.

An employer that uses an automated employment decision tool must provide notice to employees and candidates at least 10 business days before use and must allow a candidate to request an alternative selection process or accommodation.

Violations may be punished by civil penalties of up to $500 for a first violation and up to $1,500 for subsequent violations.

Next Steps for Employers

While the new effective date provides employers with more time to prepare, employers should carefully examine any AI tools they plan to use in their internal and external recruitment, hiring and promotion processes ahead of the effective date. Specifically, employers may consider conducting a preliminary bias audit with an independent auditor to determine whether their current technology will meet the requirements of the law or whether it is necessary to adjust, modify or discontinue use of any applicable AI tools.

It is recommended that employers and employment agencies work with their legal counsel to develop and implement practices that comply with the notice provisions required by the law.

HR Works will continue to monitor this topic and provide updates as more information becomes available.

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.