New York City law aimed at curbing AI bias takes effect

New York City law aims to prevent bias in employment decisions as artificial intelligence tools are rapidly adopted by businesses.

Artificial Intelligence Image: Shutterstock

New legislation focused on artificial intelligence-powered employment tools went into effect in New York City on Wednesday, banning employers and agencies from using automated employment decision-making tools (AEDT) unless the tool has been audited for bias in the last year.

Under Local Law 144 of 2021, the new rules aim to prevent bias and ensure the fairness of employment decisions using artificial intelligence.

In addition to the one-year audit window, NYC Department of Consumer and Worker Protection (DCWP) rules require that audit results be made available to the public, and appropriate notices must be provided to employees and job applicants.

Automated employment decision-making tools can assist or replace self-determination. Examples of these tools include Freshworks, Breezy HR, Greenhouse, and Zoho Recruits, which can screen or pre-screen resumes.

"The DCWP will collect and investigate [bias] complaints," a department spokesperson told Decrypt via email. "Civil penalties for violations will be calculated on a case-by-case basis," the agency added, explaining that the law allows for separate violations for each day in which the use of AEDT is violated.

In June, business review site B2B Reviews reported that 21% of HR departments surveyed used AI tools like OpenAI's ChatGPT for training and development, saving an average of 70 minutes per week. One in 10 HR departments also said they use chatbots to draft termination letters.

"In developing the AEDT rules, we strive to strike the right regulatory balance between the rights of job seekers and the needs of businesses, as reflected in our rulemaking process," the spokesperson said.