Privacy & Cybersecurity Law Blog

On October 24, 2022, the New York City Department of Consumer and Worker Protection (“DCWP”) proposed rules to implement its new law regarding automated employment decision tools (“AEDTs”).

The new law, NYC’s Local Law 144 (“LL 144”), will take effect on January 1, 2023 and will prohibit an employer or employment agency from using AEDTs for an employment decision (i.e., screening a candidate for employment, or an employee for promotion, within NYC) unless:

• within one year prior to using the AEDT, it has been subject to a “bias audit”; and
• prior to using the AEDT, a summary of the bias audit and the distribution date has been posted to the employer or employment agency’s website.

Under LL 144, an AEDT includes “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 is used to substantially assist or replace discretionary decision making” for employment decisions. Covered AEDTs expressly do not include tools that do not support discretionary decision-making and do not materially impact individuals, including, for example, junk email filters, firewalls, antivirus software, calculators, spreadsheets, databases, data sets or other compilations of data.

LL 144 also requires any employer or employment agency in NYC using an AEDT for screening to provide notice to NYC-resident employees or applicants, including:

• prior notice that the tool will be used and that a candidate may request an alternative selection process or accommodation;
• prior notice of the job qualifications and characteristics the tool will use to assess the candidate; and
• notice of the type, source, and retention policy relating to data collected for the AEDT.

LL 144 provides for enforcement by the NYC Corporation Counsel, including fines up to $1,500 per violation.

The proposed rules implementing LL 144 provide additional requirements, including for example:

• clarifying the scope of covered AEDTs, including the requirement that they “substantially assist or replace discretionary decision making”;
• clarifying the requirements for conducting and publishing the results of a bias audit, including where the AEDT selects, classifies, or scores individuals; and
• clarifying how to satisfy the law’s notice requirements.

A hearing on the proposed rules is scheduled for November 4, 2022.

Update: Following a hearing on the proposed rules, and due to the high volume of public comments received, the DCWP announced that it will not enforce LL 144 until April 15, 2023, and is planning a second public hearing.