- Up to $1,500 per day, per non-audited tool, and up to an additional $1500 per day for failure to provide notice to candidates or employees
- Since the bias audits need to be publicly shared, it will be relatively easy to see if an employer is in compliance
- There are several factors that will impact how long compliance takes, including the bias auditing methods employed and the number of tools that need to be audited
Overview
NYC Local Law 144 (AKA NYC LL 144, or the NYC AEDT Law) will begin enforcement on 07/05/2023.
This law requires any employers hiring, evaluating, or promoting candidates in NYC and using automated employment decision tools (AEDT) in the process will have to perform third-party, independent audits on each of the tools they use, provide notice to candidates that these tools will be in use, and publicly post audit results.
Any employers not in compliance by that date could face fines up to $1500 per occurrence, per day.
Specifically, the law lays out the penalties as follows:
§ 20-872 Penalties. a. Any person that violates any provision of this subchapter or any rule promulgated pursuant to this subchapter is liable for a civil penalty of not more than $500 for a first violation and each additional violation occurring on the same day as the first violation, and not less than $500 nor more than $1,500 for each subsequent violation.
b. Each day on which an automated employment decision tool is used in violation of this section shall give rise to a separate violation of subdivision a of section 20-871.
c. Failure to provide any notice to a candidate or an employee in violation of paragraphs 1, 2 or 3 of subdivision b of section 20-871 shall constitute a separate violation.
d. A proceeding to recover any civil penalty authorized by this subchapter is returnable to any tribunal established within the office of administrative trials and hearings or within any agency of the city designated to conduct such proceedings.
How are these fines calculated?
There are two pieces of the fine that employers could be fined for:
- Using a non-audited AEDT
- Not providing notice to applicants or employees of the use of an AEDT
And each of these violations could be fined up to $1500 per day.
This means that an employer that is using two non-audited AEDTs and not providing notice could face fines of up to $4500 per day – that’s over $30,000 a week.
How do you see if a company is in compliance?
The posting of the audit results and the notices to candidates may both be public-facing, meaning it is relatively easy to look at an employer’s job board and see if they are in compliance.
For the audit results, they must be shared publicly – but not necessarily on the company’s site. Part of Proceptual’s service, for example, is to post the results on a microsite that an employer can link back to. This ensures the results are always posted and meeting regulatory requirements, but also that they can be quickly updated as the bias reports are updated every year.
For the notices to candidates, it must be:
(1) Including notice on the careers or jobs section of its website in a clear and conspicuous
manner at least 10 business days prior to use of an AEDT;
(2) Including notice in a job posting at least 10 business days prior to use of an AEDT; or,
(3) Providing notice to candidates for employment via U.S. mail or e-mail at least 10 business
days prior to use of an AEDT.
This means that there is a way to avoid public sharing of the notice if you choose to provide that notice to candidates via email or mail 10 days prior to the use of an AEDT – which could prolong the hiring process for employers who choose to go that route.
How long does compliance take?
It depends on a few factors:
- The method of performing the audit and posting the results
- The capacity of your third-party vendor to perform such work
- The number of AEDTs an organization is using
- The state of the data, and how much standardization work needs to be done
First, as the bias audit is a statistical data analysis, there is a certain level of data science that will go into the effort. That said, it doesn’t have to be a manual process. Proceptual’s tech-driven approach automates and standardizes much of the process, but applies expertise to analyzing and making recommendations on the outputs.
Second, there could be tens of thousands of employers needing to comply with this law in a short amount of time. Depending on the third-party auditor you choose, you may be waiting in line. Proceptual’s approach is fully scalable, so we do not anticipate there being a need for delay when working with us, but taking a fully manual approach could introduce delays.
Third, each AEDT needs to be audited separately. The more tools, the more audits. While Proceptual automates much of the process, there is a marginal time cost to each additional tool.
Last, the number of errors, any missing information, changes in format from one data set to the next, and other factors, could require additional work when preparing the data for analyses.
All in all, Proceptual anticipates turnaround in less than 4 weeks for most of our customers – but we will provide a full timeline after understanding more about your needs.
Have further questions? Reach out to Ken Hellberg and he will be happy to help: ken@proceptual.com