In this installment of LaborSpeak, we discuss the rise of artificial intelligence (AI) in the workplace and the subsequent wave of new regulations employers should be aware of, including New York City’s new law prohibiting the use of some automated tools in employment decisions.
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Transcript
Against the backdrop of AI dominating the headlines on July 5th, 2023, New York City will begin enforcing its new law that prohibits the use of automated decision tools, or AEDT in employment decisions unless certain audit, notice,and reporting requirements are met.The law applies not just to what many think of as AI, like using chat GPT to screen job applicants. It includes "any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output that is used to substantially assist or replace discretionary decision making." However, the law only applies to decisions around hiring and promotions, other employment decisions such as for compensation, terminations, or performance evaluations are not subject to the law, even if an AEDT is used.
New York City employers should determine whether they use an AEDT to make hiring or promotion decisions, and if so, they must commission an independent bias audit within one year of the tool's use, publish the results, and notify applicants and employees of the tools use. Employers nationwide should prepare for a likely wave of new legislation regulating AI. Federally, no law has yet been passed regulating AI in employment decisions, but in May, 2023, the EEOC published guidance focused on discrimination against applicants and employees when using AI.
Under the guidance, an employer may be liable for discrimination caused by an AI powered tool, even if the tool was developed and administered by a third party. On the state level, New York, New Jersey, California, and DC have introduced bills to regulate AI and employment. An Illinois and Maryland already have AI related employment laws on the books. These regulations are intended to prevent AI tools from making discriminatory employment decisions that have an adverse impact on protected groups of employees, by requiring bias audits of these AI tools, and to hold employers liable for discrimination caused by these tools.
With this wave of new regulations, employers should be careful to understand the AI tools they're considering and be mindful of their own liability when negotiating contracts with third party AI tools.Feel free to contact our team if you have questions about preparing for this wave of AI laws, or if you have any other labor and employment related questions.