The New York City Department of Consumer and Worker Protection (DCWP) began enforcement of Local Law 144 of 2021 which regulates the use of Artificial Intelligence (AI) screening and hiring tools by employers and employment agencies that include an Automated Employment Decision Tool (AEDT) starting on July 5, 2023, according to a DCWP announcement.
The DCWP Rule prohibits employers and employment agencies from using an AEDT unless the tool has been subject to a “bias audit” within one year of usage, information about the audit is made publicly available on the website of the employer or employment agency prior to usage, and certain notices about AEDT usage are provided to employees or job candidates.
An AEDT is defined as “any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making for making employment decisions that impact natural persons.”
However, the AEDT definition “does not include a tool that does not automate, support, substantially assist or replace discretionary decision-making processes and that does not materially impact natural persons, including, but not limited to, a junk email filter, firewall, antivirus software, calculator, spreadsheet, database, data set, or other compilation of data.”
Employers and employment agencies that violate the provisions of Local Law 144 of 2021 will be subject to a civil penalty of not more than $500 for the first violation and each additional violation occurring on the same day as the first violation, and not less than $500 nor more than $1,500 for each subsequent violation. More information about the DCWP Rule is available here.
ClearStar is a leading global Human Resources technology company specializing in background checks, drug testing, and occupational health screening. Issues involving the usage of AI by employers is one of the “2023 Top Trends in Workforce Screening” researched and compiled in a white paper by ClearStar. To learn more about ClearStar, please contact us.
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Thomas Ahearn - Digital Content Editor
Thomas Ahearn is a Digital Content Editor at ClearStar, a leading Human Resources (HR) technology company specializing in background checks, drug testing, and occupational health screening. He writes about a variety of topics in the background screening industry including Artificial Intelligence (AI), "Ban the Box," class action lawsuits, credit reports, criminal records, drug testing, Equal Employment Opportunity Commission (EEOC), Fair Credit Reporting Act (FCRA), Form I-9, identity theft, privacy, social media screening, and workplace violence.
At ClearStar, we are committed to your success. An important part of your employment screening program involves compliance with various laws and regulations, which is why we are providing information regarding screening requirements in certain countries, region, etc. While we are happy to provide you with this information, it is your responsibility to comply with applicable laws and to understand how such information pertains to your employment screening program. The foregoing information is not offered as legal advice but is instead offered for informational purposes. ClearStar is not a law firm and does not offer legal advice and this communication does not form an attorney client relationship. The foregoing information is therefore not intended as a substitute for the legal advice of a lawyer knowledgeable of the user’s individual circumstances or to provide legal advice. ClearStar makes no assurances regarding the accuracy, completeness, or utility of the information contained in this publication. Legislative, regulatory and case law developments regularly impact on general research and this area is evolving rapidly. ClearStar expressly disclaim any warranties or responsibility or damages associated with or arising out of the information provided herein.
