- NYC Local Law 144, which requires independent audits for “automated employment decision tools (AEDT)”, begins enforcement July 5th, 2023
- In this law, an AEDT is any employment tool leveraging computational processes to “substantially assist or replace” discretionary decision making, specifically when hiring or promoting employees
- The law covers tools beyond those that use AI, so it is important to analyze the tools in use to ensure compliance
NYC Local Law 144 begins enforcement 07/05/2023. Before that date, businesses who hire or employ NYC residents AND use automated employment decision tools (AEDT), will need independent, third-party audits performed for those tools. In addition, they will need to publicly post the results and provide notice that those tools are in use.
HR professionals are now asking: Are we using an AEDT?
Let’s clarify. An AEDT could be any employment tool leveraging computational processes to “substantially assist or replace” discretionary decision making, specifically when hiring or promoting employees. This definition definitely goes beyond any reasonable definition of “artificial intelligence” to encompass a broad range of hiring technology in wide usage today.
Let’s break that down.
The law defines AEDT as: “…any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making for making employment decisions that impact natural persons.”
It also defines what is NOT an AEDT: “The term “automated employment decision tool” does not include a tool that does not automate, support, substantially assist or replace discretionary decision-making processes and that does not materially impact natural persons, including, but not limited to, a junk email filter, firewall, antivirus software, calculator, spreadsheet, database, data set, or other compilation of data.”
Below are some categories that are likely to be considered AEDT under the current law and rules drafts, along with a few examples of widely used tools.
- Applicant Tracking Systems (ATS) that screen or pre-screen resumes
- Breezy HR
- Zoho Recruit
Why: The criteria used to automatically rank or prioritize resumes essentially replaces human decision-making
for a certain point in the hiring funnel
- Applicant assessments
- Modern Hire
Why: The automated scoring or ranking criteria could eliminate candidates, which replaces human decision-making
- Automated screening software (which could be integrated with an HRIS)
Why: The criteria used to automatically screen candidates could eliminate candidates without human review,
replacing human decision-making
- Performance Management
Why: The automatic, AI-driven scoring or ranking systems these tools use could substantially
replace parts of human decision-making
While the above is a basic list, Proceptual can help if there are tools you are using and want to be confident. Part of our evaluation process is listing all the tools that may require audits. Based on that list, we make recommendations and can help with the audits you may need.
Contact us today for more information at email@example.com