What is Local Law 144, AKA the NYC Bias Law, AKA the Automated Employment Decision Tool Law (AEDT)?
I run a remote-first or hybrid company and we are not based in NYC although we have employees there. Am I required to comply?
Local Law 144 applies to companies that have offices and employees in NYC. Companies that have offices and hire remotely may or may not need to comply based on the details of the employment situation. (We are happy to talk this through!)
Are there other similar laws on the horizon in other jurisdictions?
Yes! Every jurisdiction is likely to regulate these tools differently, but there will definitely be regulation. We expect regulation to go into effect in California, Colorado, and likely Washington DC.
Most importantly, the EEOC has designated bias in automated systems as one of its top 3 focus areas for rule-making in 2023 and is actively working through its regulatory process now.
Won’t my vendor simply provide the audit? Why can’t we just do this audit internally?
No. The most recent guidance from NYC states that an auditor cannot be independent if the auditor “is or was involved in using, developing, or distributing the AEDT,” and “at any point during the bias audit has an employment relationship with an employer or employment agency that seeks to use or continue to use the4 AEDT or with a vendor that developed or distributed the AEDT.”
Is this really happening?
New York City has published its Final Rules for implementing Local Law 144. The law goes into effect on July 5, 2023. This date has been moved back twice.
We don’t use AI in our hiring. Do I need to comply?
Many HR leaders we speak to say something similar, and are correct. However, the New York law applies not only to AI or Machine Learning tools but to any automated tool that qualifies.
Further, the law applies to hiring processes that use an automated tool at any point of the hiring funnel; it does not have to be the case that an automated tool is making the final hiring decision.
How do I know if the tools we use for hiring require audit?
Please contact us to schedule a free consultation to go over your NYC local law 144-specific use cases. As a very general rule, when a tool is screening some candidates out of hiring contention, or when a tool produces an “objective” score or rank-orders candidates, the tool may require an audit. The most common use cases that end up requiring audit are:
- Resume screening conducted by ATS
- Assessments that provide a score or pass/fail metric
- Interview tools that produce scores or otherwise rank candidates
What happens if I don’t comply? What are the penalties?
Penalties have been set at up to $1,500 per day. Each tool that falls under the law that is not audited is a separate violation. So, a company that uses 3 automated tools, starting on the third day after violation, will incur a penalty of $4,500 per day indefinitely until they comply.
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