New York City Postpones Enforcement of Law Regulating Use of Artificial Intelligence (AI) Screening Tools by Employers

In December 2022, the New York City Department of Consumer and Worker Protection (DCWP) announced it would postpone enforcement of Local Law 144 of 2021 – which was originally scheduled to take effect on January 1, 2023 – until April 15, 2023. The law would regulate the use of artificial intelligence (AI) screening tools by employers in the hiring and promotion process.

Specifically, the law will regulate “automated employment decision tools” which are 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 are substantially used to make employment decisions.

The law will require that a “bias audit” be conducted on “automated employment decision tools” prior to use. The law will also require that candidates or employees that reside in New York City be notified about the use of such tools in the assessment or evaluation for hire or promotion and be notified about the job qualifications and characteristics that will be used by the tools.

“Automated employment decision tools” do not include tools that do not “automate, support, substantially assist or replace discretionary decision-making processes” and that do 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.”

In its announcement, the DCWP stated it “is working on rules” for the law that regulates “automated employment decision tools.” The DCWP held a public hearing about the law in November 2022 and is “planning a second public hearing” due to the high volume of public comments. New York City employers can check the DCWP New Laws & Rules page for updates.

Violations of the provisions of the law will be subject to a civil penalty. Violators will be liable for a civil penalty of not more than $500 for a 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. The complete text of Local Law 144 of 2021 is available here.

ClearStar is a leading Human Resources technology company that specializes in background checks, drug testing, and occupational health screening. ClearStar offers intuitive background check solutions that empower employers to make smarter hiring decisions while also complying with federal, state, and local laws. For more information, contact ClearStar.

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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 "Ban the Box," class action lawsuits, credit reports, criminal records, drug testing, the Equal Employment Opportunity Commission (EEOC), the Fair Credit Reporting Act (FCRA), HR technology, identity theft, privacy, social media screening, and workplace violence.

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