New York City began enforcing Local Law 144 on July 5, 2023. This law regulates the automated employment decision tools (AEDT) in New York City. It bans New York employers and employment agencies from using AEDTs when making decisions concerning promotion, hiring, or screening for these processes. 

However, employers can use AEDTs if they undergo bias audits and post the required notices. Unfortunately, the regulations and exceptions have proven complicated for many employers. This confusion spurred the New York City Department of Consumer and Worker Protection to release guidance on the law.

Here is a summary of Local Law 144 and some topics covered by the FAQ.

How Far the Law Reaches

According to Local Law 144, it covers AEDTs used “in the city.” Though used throughout the text, its interpretation remained open, so the FAQ clarified “in the city” as requiring one of the following:

• Part-time or full-time, the job’s location is an office in NYC;
• A fully remote job with an associated location in an office in NYC;
• The employment agency using AEDT is in NYC; if located outside of NYC, then one of the above bullets proves true

Bias Audits Explained

According to Local Law 144, employers must conduct bias audits to use AEDTs. They must also publish a summary of the most recent audit, showing when the employer started using it. However, the law provides no specific actions employers must take after receiving the audit’s results.

As such, the FAQs explained compliance requirements for employment agencies and employers. It described the anti-discrimination laws and how to comply with them after receiving the audit results.

Demographic Information

The FAQs also covered what employers can do if demographic information becomes unavailable or lacks significant historical data. In these cases, employers and employment agencies can use test data when conducting bias audits. Otherwise, they may use the historical data of other agencies or employers.

However, the law issued stipulations when relying on this data. The employer or employment agency must supply the independent auditor conducting the bias audit with historical data from their AEDTs. Otherwise, they may use this data if this is the employer’s or agency’s first time using AEDT. In addition, they cannot impute or infer demographic information when unavailable.

Vendors

AEDT vendors cannot perform bias audits on their devices. However, they may hire an independent auditor to review their equipment. This action is optional for the vendors, as they hold no responsibility for guaranteeing bias audited tools. The employer or employment agency maintains responsibility for ensuring AEDTs undergo bias audits.

The FAQs provide more information for employers and employment agencies within Local Law 144’s reach. Those who must comply should work with an experienced background screening company to ensure compliance with the AEDT law. The right provider will keep them up-to-date, comply with all relevant employment laws, and deliver accurate reports.

Keep your business up to date on new laws and regulations with JDP’s free news resources. Contact a sales rep today.

Source