As the integration of Artificial Intelligence (AI) into various sectors accelerates, its use in hiring processes has come under increased scrutiny. This scrutiny has led to specific legislative actions aimed at ensuring fairness and transparency in employment. One such legislative milestone is New York City’s Local Law 144, which significantly impacts how employers in the city use AI-driven tools for hiring. 

What is New York Local Law 144?

Local Law 144, enacted in New York City, targets the use of Automated Employment Decision Tools (AEDTs) in hiring practices. This law was introduced as part of a broader initiative to address potential biases and discriminatory practices that could arise from the unchecked use of AI in employment decisions. Under Local Law 144, any employer in New York City using AEDTs to screen candidates must ensure these tools are audited for bias and certified for compliance annually.

Key Provisions of Local Law 144

Local Law 144 mandates several critical requirements aimed at regulating the deployment of AEDTs:

• • Bias Audits: Employers must conduct an independent bias audit of their AEDTs before use and annually thereafter. This audit aims to assess and mitigate any discriminatory impacts that these tools might have based on gender, race, or other protected characteristics.

• • Certification: Post-audit, employers must obtain a certification demonstrating that their tools have passed the bias audit. This certification must be submitted to a designated city agency and renewed annually.

• • Transparency and Disclosure Requirements: Employers are required to publicly disclose the use of AEDTs in their hiring processes. This disclosure must include details about the type of tool used, the kind of data it processes, and a summary of the bias audit results.

• • Data Handling and Privacy: The law also stipulates guidelines for handling the data used by AEDTs, emphasizing the need for privacy safeguards and the ethical use of candidate data.

Implications for Employers

The implementation of Local Law 144 carries significant implications for employers in New York City:

• • Enhanced Scrutiny of AI Tools: Employers must now examine their hiring processes more closely, ensuring any AI tools used are free of biases that could lead to discriminatory outcomes. This requirement places a higher burden on HR departments to understand deeply the mechanics of the AI tools they employ.

• • Operational Adjustments: Compliance with Local Law 144 may necessitate changes to existing operational practices. Employers might need to alter their data collection and processing methods, implement new software systems, and possibly adjust their hiring criteria.

• • Cost Implications: The requirement for annual audits and certifications can introduce additional costs. These costs include fees for independent auditors, investments in compliant AI technologies, and potential modifications to existing systems.

• • Legal and Reputational Risks: Non-compliance with Local Law 144 can lead to legal penalties, including fines and restrictions on the use of AEDTs. Moreover, failure to comply can damage an organization’s reputation, especially in an era where ethical considerations are increasingly influencing consumer and job seeker behavior.

Compliance Strategies for Employers

For employers in New York City using or considering the use of AEDTs, compliance with Local Law 144 involves several key steps:

• • Choosing the Right Auditor: Employers must select an independent auditor with expertise in AI and employment law to conduct the required bias audit. This selection is crucial as the auditor’s credibility and thoroughness directly impact the validity of the audit results.

• • Preparing Data: Employers need to prepare comprehensive datasets that reflect their candidate selection processes. These datasets should be representative of all applicant groups to ensure the audit accurately assesses potential biases.

• • Implementing Recommendations: Following the audit, employers should implement any recommendations made by auditors to mitigate identified biases. This implementation might involve technical adjustments to the AI algorithms or broader changes in the recruitment process.

• • Documentation and Reporting: Maintaining detailed records of the audit process, findings, and corrective actions is essential for annual recertification and potential inspections by regulatory bodies.

• • Ongoing Monitoring and Evaluation: Employers should continuously monitor the performance of their AEDTs and conduct internal assessments periodically. This proactive approach ensures sustained compliance and helps identify new biases as organizational practices and candidate pools evolve.

Embracing Ethical AI in Hiring

New York Local Law 144 represents a proactive step towards ensuring that the deployment of AI in hiring processes is both fair and transparent. For employers in New York City, this law necessitates a thorough re-evaluation of how automated tools are integrated into hiring practices. By fostering an environment of compliance and ethical responsibility, organizations can not only adhere to legal standards but also enhance their public trust and corporate integrity. As AI continues to reshape the landscape of employment, such regulations will likely become more prevalent, setting standards that could eventually influence global practices in AI governance in hiring.

Need Help?

The details of NYC Local Law 144 can be overwhelming, so don’t hesitate to reach out to BABL AI. Their team of Audit Experts can provide valuable insights on NYC Local Law 144 and other global regulations.