New York City, NY: DCWP Provides Clarification on Use of AI Tools in Employment Decisionmaking

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APPLIES TO

Employers with Employee Positions within New York City, NY

EFFECTIVE

July 5, 2023

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Quick Look

  • Applicability of Local Law 144 is dependent upon where a position is physically located, whether within or outside of New York City.
  • Employers are not required to follow any geographical or temporal parameters for submitting the required bias audit; however, employers should provide an explanation of the data used in their audit summary.
  • Employers are required to provide ten business days’ notice before implementing the use of an automated decision tool when making employment decisions in New York City.

Discussion

On May 22, 2023, New York City’s Department of Consumer and Worker Protection (DCWP) held an educational roundtable with business advocates and employers to discuss the final rules implementing New York City’s Local Law 144, which regulates the use of automated tools when making employment decisions, such as requiring a bias audit of the tool and providing a notice when using the tool. The roundtable was intended to review the requirements under the law and to address employer questions that remain ahead of the law’s July 5, 2023 enforcement date.

Local Law 144 provides that “in the city, any employer or employment agency that uses an automated employment decision tool to screen an employee or candidate who has applied for a position for an employment decision shall notify each such employee or candidate who resides in the city.” At the roundtable, the DCWP clarified that the key factor that will determine whether Local Law 144 applies to a specific position is the physical location of the position. For example, if a position is located within New York City, then both a bias audit and notice of New York City residents is required. However, if a position is located outside of New York City, neither a bias audit nor notice to New York City residents are required.

For a fully remote position, if the employer only has an office located within New York City, both a bias audit and notice is required to New York City residents. However, if the employer does not have an office within New York City, then neither is required. The analysis is fact specific in instances where the employer has offices both within and outside of New York City. This analysis will likely include factors such as whether the employee will ever need to report to a physical office, and if so, which one.

The DCWP also clarified that there are no geographical or time parameters that an employer is required to follow in providing data for the bias audit. However, employers are required to provide an explanation of the data used in their summaries of the audit responses.

Additionally, the DCWP explained that employers are required to provide ten (10) business days’ notice of the use of the automated decision-making tools to candidates/employees residing within New York City. This notice does not need to be specific to any particular position, meaning that an employer may post a general notice on the employment section of its website. Ten days following posting of the notice, employers are permitted to begin using the automated decision tool.

 

Action Items

  1. Update policies and procedures regarding the use of automated decision-making tools when making employment related decisions.
  2. Implement required notice for use of automated decision-making tools.
  3. Implement bias audit procedures when using automated decision-making tools.
  4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase