Navigating The Future Of Hiring: New York City’s Groundbreaking AI Regulation Enters Enforcement Phase

The Evolution Of New York City’s AI Bias Regulation

The journey towards New York City’s AI bias regulation began on January 1st, 2023 when the first-of-its-kind law took effect. However, enforcement was temporarily delayed, accommodating essential clarifications and revisions in the regulations. Each rulemaking stage brought about material changes, leaving employers and stakeholders anticipating the final outcome. The release of frequently asked questions (FAQs) by the New York City Department of Consumer and Worker Protection alongside the enforcement date aimed to provide much-needed clarity on the law’s provisions.

Addressing AI Bias: A Step Toward Equality And Fairness

With AI taking on a more prominent role in hiring and promotion decisions, concerns about bias and discrimination have become more prevalent. The New York City law compels employers to conduct bias audits of their HR technology systems to identify and fix any potential bias. These audits, conducted by impartial third parties, are instrumental in holding employers accountable for the fairness and impartiality of their AI-driven employment processes. While AI has undeniably streamlined hiring processes, there’s also a potential for unintended biases to perpetuate if left unchecked. New York City’s regulation is a crucial safeguard to ensure that AI enhances the hiring process without compromising equality.

Coverage And Compliance: Who And What Is Included

The FAQs accompanying the law provide clarity on its scope and application. Employers and employment agencies fall under the regulation if the job is located in New York City. The employer’s location is not the determining factor; rather, the job’s physical location decides applicability.

As for automated tools covered by the law, AEDTs encompass computational processes derived from machine learning, statistical modeling, data analytics, or AI that issue simplified outputs. These outputs may include scores, classifications, or recommendations used to assist or replace discretionary decision-making in employment decisions. If an AEDT is used at any stage of hiring or promotion to assess candidates, the employers and agencies must comply with the law’s requirements. Notably, the regulation only applies to AEDTs directed towards actual job seekers or employees, not those used for sourcing candidates or conducting outreach.

Transparency And Bias Audits

Transparency is a cornerstone of the law, and employers must publish a summary of the results of their most recent bias audit. The audit’s purpose is to evaluate AI tools’ potential disparate impact on sex, race, and ethnicity. To maintain impartiality, the audit must be conducted by third-party entities with no vested financial interests in the employer. The results of the bias audit must include relevant data, demographic information, and selection or scoring rates, all with a focus on upholding non-discriminatory practices.

Collaboration And Compliance

As businesses adapt to this regulation, they can expect the New York City Department of Consumer and Worker Protection to work alongside them in a spirit of collaboration rather than punitive action. This approach acknowledges that regulating AI-driven employment activities requires a nuanced understanding and is best achieved through collaboration between stakeholders.

What Employers Should Know

New York City’s law regulating employers’ use of AEDTs in hiring and promotions marks a momentous milestone in the journey towards fair and bias-free AI integration in the workplace. Amidst the complexities of New York City’s groundbreaking AI bias regulation, businesses should be aware of the support and expertise of a professional employer organization (PEO). PEOs like GMS offer comprehensive HR solutions, including AI compliance services, that ensure seamless integration of automated employment decision tools while adhering to the law’s requirements. By partnering with GMS, businesses can access the latest auditing practices, unbiased third-party assessments, and tailored guidance to ensure transparency and fairness in their hiring and promotion processes.

As businesses face the challenges of this ever-evolving landscape, GMS serves as a trusted partner, helping them harness the full potential of AI while protecting against bias, discrimination, and compliance issues. With GMS by your side, businesses can confidently embrace the future of AI in New York City while prioritizing diversity, equity, and a thriving workforce. Contact us today to learn more.