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NYC Passes Ordinance Restricting Use of AI in Employment Applicant Screening

September 6, 2022

We recently wrote about the Equal Employment Opportunity Commission’s Guidance on the use of Artificial Intelligence in the hiring process.  AI is exploding.  It is being put to use in many different industries and toward many different applications, including in various human resources related functions.  As we previously discussed, the use of AI can be extremely helpful to employers, if done properly.

Recently, New York City became one of the first jurisdictions to address the proliferation of AI tools in the employment context.  NYC passed a local ordinance prohibiting employers from using AI tools, which it calls Automated Employment Decision Tools, unless the employer takes certain steps to “vet” and disclose use of the tool.

The local law goes into effect on January 1, 2023 and will apply to employers operating in New York City that target NYC residents.  It will require that employers subject the AI screening tool to a validation test.  The ordinance calls the test a bias audit.  The bias audit must be conducted by an impartial auditor and will require evaluation of the tool’s potential disparate impact on protected traits.  In addition, the employer must post a summary of the bias audit on the employer’s web site.

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