The New York City Department of Consumer and Worker Protection (“DCWP”) has announced a delay on the effective date of the Automated Employment Decision Tools Law (“AEDT Law”) from January 1, 2023 to April 15, 2023.
As a refresher, the AEDT Law was passed on December 11, 2021 and institutes specific requirements on the use of automated employment decision tools (“AEDT Tools”) (defined as “any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues simplified output . . . that is used to substantially assist or replace discretionary decision making for employment decisions that impact natural persons”). Some examples of AEDT Tools could include automated resume scanners that prioritize applications based on certain content or job fit algorithms designed to evaluate potential applicant success. The AEDT Law prohibits the use of AEDT Tools unless the tools have been the subject of a bias audit conducted within one year of the tool’s use, a summary of the audit is made publicly available, and the employer provides notice to applicants or employees of the use of AEDT Tools and the characteristics the AEDT Tool assesses.
In September, the DCWP issued proposed rules in an attempt to clarify ambiguities in the law, including clarification regarding the definition of an AEDT Tool and specifying the requirements for bias audits. The definition of an AEDT Tool was narrowed to a tool that either relies solely on a simplified output, uses a simplified output as one set of criteria where the output is weighted more than any other criterion in the set, or uses a simplified output to overrule or modify conclusions derived from other factors including human decision-making. The proposed rules regarding bias audits require calculating the selection rate and impact ratio of each EEO-1 category on an employer’s Equal Employment Opportunity Commission Employer Information Report.
Despite this additional guidance, the DCWP received significant public comment requesting further revisions to the rules, particularly regarding the definition of an AEDT Tool as several advocacy groups argued that the narrowed definition would allow loopholes in the law. For example, a company could use multiple AEDT Tools and weigh them equally so that none of them “is weighed more than any other criterion in the set” and evade the law’s applicability.
Due to the high volume of public comments, the DCWP is planning a second public hearing and postponed the law’s effective date. Companies should consider the types of AEDT Tools used in their hiring practices and the extent to which the tools interact with (or override) other hiring criteria and reach out to vendors regarding compliance with the law. They should also work towards developing a compliant bias audit framework. We will keep monitoring the progress of the law and update as we receive new information.