Law

Who watches the watchers – you know, the resume gatekeepers that screen you out for reasons unknown and unclear? New York City is attempting to do just that through NYC Local Law 144 which regulates the use of Automated Employment Decision Tools (“AEDTs”), proprietary algorithmic apps that use proxies to screen out job applicants on grounds known only to its programmers, or which these ai agents may glean from data amassed in bygone times when sensibilities were subject to the slings and arrows of outrageous misfortune.

Case in point from the bad old days in the 1980s: A progressive Human Resources manager sought to correct underutilization of African Americans in the Maintenance Department of about 100 persons, 100% of whom were white. 8-Factor analysis suggested that minority representation should have been about 20%. So, all other things being relatively equal, the employer needed to strive (take affirmative action) to correct this imbalance. The Maintenance portal-of-entry position presented a great opportunity to take a step in correcting this underutilization. HR selected a great candidate to fill this Jackie Robinson-esque role. A compelling human factor made this particular candidate stand out from the rest of the screening crowd. His car broke down en route to the interview. Undeterred, he ran two and a half miles from the break down, across the Monongahela River, arriving in time to slay the HR screening interview. However, upon learning that the referred candidate was black, the Maintenance Department hiring manager eliminated the position.

In the Information Age, algorithms have shouldered the burden of screening candidates in a process likened to a wide funnel. Attract numerous qualified candidates and screen them down to a select few. The algorithmic devil is in the details.

Enter groundbreaking New York City Local Law 144 which regulates the use of Automated Employment Decision Tools (AEDTs) in hiring and promotion processes within the city to prevent algorithmic bias. 

The law prohibits employers and employment agencies from using an AEDT unless specific conditions are met regarding bias audits and public notice.

StartupWorks would like to use its domains AuditWorks.com and JurisWorks.com as Reinforcement Learning labs to audit AEDT validity as to legally protected categories.

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New York City 

Local Law 144 of 2021 regulates the use of Automated Employment Decision Tools (AEDTs) in hiring and promotion processes within the city to prevent algorithmic bias. 

The law prohibits employers and employment agencies from using an AEDT unless specific conditions are met regarding bias audits and public notice. Enforcement began on July 5, 2023. 

Key Requirements for Employers

  • Annual Bias Audits: Employers must ensure that any AEDT used has been subject to an independent, annual bias audit conducted by an impartial third party. The audit must assess the tool’s impact across race, ethnicity, and gender categories.
  • Publicly Available Summary: A summary of the bias audit results, including the date the tool was distributed, must be conspicuously posted on the employer’s website prior to using the tool. This information must remain available for at least six months after the tool’s last use.
  • Candidate and Employee Notice: Employers must provide clear notice to candidates or employees residing in NYC who are being evaluated by an AEDT. This notice must be given at least 10 business days before the use of the tool and include:
    • Information about the use of the AEDT in their assessment.
    • The job qualifications and characteristics the tool will use to make its assessment.
    • Instructions on how individuals can request a reasonable accommodation or an alternative selection process, if available.
    • Information on the types of data collected, the source of data, and the employer’s data retention policy (either on the website or upon written request). 

Scope and Penalties

  • Applicability: The law applies to employers and employment agencies with a physical office in New York City using an AEDT for jobs located in NYC (either fully or partially remote with an NYC office association).
  • Definition of AEDT: The law defines an AEDT as a computer-based tool that uses machine learning, statistical modeling, data analytics, or artificial intelligence and substantially assists or replaces discretionary decision-making in employment decisions.
  • Penalties for Non-Compliance: Violations can result in significant civil penalties. An employer may be fined not more than $500 for a first violation on a given day, and not less than $500 nor more than $1,500 for each subsequent violation. Each day an uncompliant tool is used constitutes a separate violation. 

For official information and detailed FAQs, refer to the NYC Department of Consumer and Worker Protection website.