New York is currently leading the race in regulating HR Tech. New York City Local Law 144, which was enforced on 5 July 2023, requires enterprises to obtain bias audits of automated employment decision tools (AEDTs) and New York State has proposed two assembly bills targeting automated employment decision tools. Assembly Bill A00567 would require annual disparate impact analysis of AEDTs, while Assembly Bill A07859, introduced 7 July 2023, seeks to increase the transparency of HR Tech tools by imposing notification requirements on employers and employment agencies using automated employment decision tools.
In this blog post, we outline the requirements of AB A07859 and compare them to Local Law 144, which the text has striking similarities to.
An automated employment decision tool is a computational process derived from machine learning, statistical modelling, data analytics or artificial intelligence that is used to issue a simplified output, including a score, classification or recommendation and either substantially assists or replaces discretionary decision making for employment decisions impacting natural persons. Employment decisions means to screen candidates for employment.
This doesn’t include tools that do not automate, support, substantially assist or replace discretionary decision making and that do not materially impact natural persons. Therefore, tools such as junk email filters, firewalls, antivirus software, calculators, spreadsheets, databases, data sets, or other compilations of data are excluded.
This definition is identical to the definition for an AEDT detailed in New York City Local Law 144, which requires annual bias audits of automated employment decision tools and imposes notification requirements on employers and employment agencies. However, Local Law 144 covers both hiring and promotion.
Any employer or employment agency using an AEDT to screen candidates who have applied for a position must notify each candidate that an AEDT will be used to evaluate them, the job qualifications and characteristics the AEDT will use in its assessment, and information about the type of data collected for use by the AEDT. This should include the source of the data and the employer or employment agency’s data retention policy.
Such notices should be given at least 10 business days before the use of the tool and should allow a candidate to request an accommodation or alterative selection process.
Like with the definition of AEDT, the notification requirements are similar to those of Local Law 144, although A07859 does not specify how the notices should be given – something that was clarified by the Department of Consumer and Worker Protection’s rules to support the enforcement of Local Law 144.
The provisions of the assembly bill should not be construed to limit the right of candidates to bring civil action or limit the authority of the division of human rights to enforce human rights laws. The Act would take effect on 1 January of the year following the date it became law.
AB A07859 is not the first law seeking to impose notification requirements on HR Tech – Illinois’ Artificial Intelligence Video Interview Act, Maryland’s prohibition of facial recognition services used by employers, New York City Local Law 144, and New Jersey AB 4909 all impose notification requirements for the use of AEDTs and similar systems. The upcoming EU AI Act will also impose transparency obligations on AI, including systems used in employment decisions.
Acting early is the best way to prepare for newly proposed laws and regulations. To find out how Holistic AI can help you, get in touch at we@holisticai.com.
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