Illinois Becomes the Second State to Enact Broader Regulations on AI
Illinois Governor J.B. Pritzker signed House Bill 3773 into law on August 9, 2024, expanding the state’s regulations on the use of artificial...
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Verified Credentials Jan 5, 2022 12:00:00 AM
Technology could help simplify the hiring process, including adopting new technologies to manage your candidate pool, run video interviews, and conduct background checks. Employers may use automation to process candidates and hire faster. A New York City law will soon place restrictions on the use of certain automation tools during the hiring process.
The New York City council enacted the new law on December 11, 2021. The law goes into effect on January 23, 2022. Once effective, employers and employment agencies (“employers”) cannot use “automated employment decision tools” unless they meet certain conditions. An automated employment decision tool includes any computational process, with some exceptions, that issues simplified output, including a score, classification, or recommendation to assist or replace discretionary decision making for employment decisions through:
The city seeks to remove situations where these technologies may create bias in hiring.
Automated tools that assist employers with decision-making during the hiring process won’t be banned entirely in New York City. The city will allow employers to use automated employment decision tools after they meet certain requirements. This includes:
1. Conducting a bias audit of the automated employment decision tool. This must be an impartial evaluation by an independent auditor. The bias audit must be done within the year before using the tool.
2. Bias audit results must be available to the public. A summary of the results of the most recent bias audit and the distribution date of the tool to which the audit applies, must be publicly available on the employer’s website before using the tool.
In New York City, employers that use an automated employment decision tool to screen a candidate or employee must provide certain notices to employees or candidates that reside in the city, including:
Employers that violate the restrictions could face civil penalties. The first violation and any additional violations made on that same day will result in a $500 civil penalty. Later violations require a fine of $500-$1,500 for each subsequent offense. The law notes that each day an employer uses an automated employment decision tool is a separate violation. Failing to provide any notice to a candidate or employee is also a separate violation. Additionally, New York City’s corporation counsel, or other persons designated by the corporation counsel, may initiate court proceedings to correct violations, including mandating compliance with the law or other appropriate relief.
If you hire candidates that reside in New York City, you may want to become familiar with this law before the effective date. Employers should review the law with their legal counsel to understand the impact on the hiring process.
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