My general rule is to not get too excited about state regulations that are proposed and have yet to go through committee or a vote. Additionally, even when laws pass, they generally have a long timeline to go into effect (e.g. New York Local Law 144 passed in 2021 and went into effect 2 years later). However, New York State’s proposed new regulation (S07623) of AI is interesting, and suggests a new direction for state-level AI regulation that HR leaders and execs should be aware of.

What’s New — A focus on Electronic Monitoring Tools

S07623 does two big things — first, it regulates the use of electronic monitoring tools (“EMTs”) by employers. It:

  • Defines a narrow set of allowable purposes for EMTs
  • Requires that the EMT be “strictly necessary” and the “least invasive means” of accomplishing that goal
  • Requires that the EMT collect as little data as possible on as few employees as possible to accomplish the goal.

If passed, this will be a very strict set of requirements that will require a ton of compliance and certification work for employers. Since the bill will require employers to “prove a negative” — that the EMT they have chosen is the least invasive means — there will be substantial room for interpretation. (Right of private action is not mentioned in the bill).

What’s Old — Another State Level AI Audit Requirement

New York S07623 includes very similar language regulating AEDTs as in Local Law 144 as well as proposed legislation like New Jersey A4909. Employers will be required to conduct and post an independent bias audit, and provide notification requirements to candidates that a tool is in use.

One interesting twist is that this law will require “meaningful human oversight” of the decisions of automated tools. Employers will want to carefully document that their process includes a “human in the loop” on all employment decisions. (I am not familiar with any employer who really truly makes final hiring, promotion, or termination decisions without human intervention).

These provisions both echo legislation introduced at the federal level — the well-branded “No Robot Bosses” and clunkier  “Exploitative Workplace Surveillance and Technologies Task Force Act.”

As always, we will continue to monitor emerging AI regulation as it nears a point requiring action on the part of HR leaders and execs.

Proceptual provides compliance solutions for the emerging regulation of AI and automated hiring systems in HR.