New York to implement new AI employment law in April

Companies with employees in New York City have four months to adapt to Local Law 144, the nation’s first law regulating the use of artificial intelligence in recruiting. The law took effect on January 1, but the city delayed enforcement until April 15.

144 Local law imposes restrictions on the use of Automated Employment Decision Tools (AEDTs), which are used to help companies conduct candidate evaluations and assist in their hiring decisions who. The law directly targets AI and AI-assisted hiring and requires AEDT users to undergo a "bias audit" by a certified auditor to look at racial/ethnic and gender selection rates for each job category.

According to the law, the technical term “automated employment decision tool” refers to “any computational process derived from machine learning, statistical modeling, data analysis, or artificial intelligence that issues simplified output, including scores, classifications or recommendations that materially assist or substitute for discretionary employment decisions affecting a natural person."

Andrew Burt, co-founder and managing partner of BNH.AI LLP in Washington, D.C. Burt, said the new law marks a turning point in the intersection of AI and law.

“This law represents a tectonic shift in the way artificial intelligence systems are regulated—the first in a larger shift in which artificial intelligence is increasingly regulated , making it more difficult for organizations to deploy and use these systems."

Burt continued: "Overall, this shift is a good thing and requires more time and attention to minimize artificial intelligence. risks. But currently most companies are not ready for this shift, which will require new and more thorough reviews of AI systems and more comprehensive risk testing of these systems."

While Local Law 144 is intended to control the misuse of artificial intelligence in recruiting, a broad interpretation of its new legal requirements could leave more companies in trouble, including those working on Companies using other computerized methods.

"While the law certainly covers AEDTs that incorporate artificial intelligence, the law's broad definition of 'AEDT' goes well beyond those processes that utilize advanced AI and extends to processes that utilize more basic analytics, ranking systems Calculation processes and systems. Therefore, when complying with the law, employers should carefully examine all processes that may be construed as AEDT."

After two rounds of public comment and a hearing last October, the City The Department of Consumer and Worker Protection (DCWP) decided in mid-December to delay enforcement in order to hold a second public hearing to address the numerous issues raised during public comment. While companies are encouraged to comply with the new law in January, DCWP will not take any enforcement actions until mid-April, giving companies an additional 15 weeks to determine whether their hiring methods fall within the scope of the new law.

Burt, Immuta’s former chief counsel, said Local Law 144 may be the first new law in the United States to regulate artificial intelligence, but it certainly won’t be the last.

New regulations and AI regulatory mechanisms, such as New York City’s local municipal laws targeting AI systems in employment settings, will make AI systems more difficult to deploy in practice – increasing AI overall compliance burden.

"In 2023, we can expect that many other jurisdictions will adopt similar mechanisms requiring more oversight of artificial intelligence systems. The Stopping Algorithmic Discrimination Act of 2021 is likely to be the next bill. The bill will provide for more comprehensive regulation of AI systems, followed by other local and state-level efforts. All of this will culminate in the EU Artificial Intelligence Act, which will do to AI what the GDPR does to privacy Artificial intelligence faces high-profile risks for executives at nearly every global company."

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