New York City Shares FAQs On Automated Employment Decision Tools

The New York City Department of Consumer and Worker Protection has shared answers to common questions it received before the city began enforcing the New York City Local Law 144 (the “NYC AI Law”) on July 5.

Some of the key points from the FAQs for employers grappling with compliance with the NYC AI Law include:

• The law covers an Automated Employment Decision Tool (“AEDT”) if it generates a prediction or a classification and identifies the inputs, relative importance of the inputs or any other parameters to improve the accuracy of the generated prediction or classification. The FAQs explain that a:
  • Prediction includes “an assessment of a candidate’s fit or likelihood of success.”
  • Classification is “an assignment of an observation to a group, such as categorizations based on skill sets or aptitude.”
    
    
• The NYC AI Law applies when the AEDT is used “in the city.” That means:
  • the job location is an office in New York City, at least part time, or
  • the job is fully remote but the location associated with it is an office in New York City, or
  • the employment agency using the AEDT is in New York City.

• An employment decision is not limited to a final hiring or promotion decision and can include screening candidates or employees. The FAQs make clear, though, that if the tool is used to scan a resume bank, conduct outreach to potential candidates or invite applications, it is not covered by the NYC AI Law because the person has not applied for a specific position.
  
  
• Vendors can conduct a bias audit of its own tool, but ultimately employers and employment agencies must ensure a compliant bias audit was done before using the AEDT.

The department previously provided guidance in its final rules on AEDTs in April.

For advice on complying with the NYC AI Law, please contact a member of Orrick’s employment team.