April 20, 2023
The New York City Department of Consumer and Worker Protection, or DCWP, released final rules on April 6 regarding the city’s Local Law 144 and announced that it would begin enforcement on July 5.
Local Law 144 restricts employers and employment agencies from using an automated employment decision tool in hiring and promotion decisions unless it has been the subject of a bias audit by an “independent auditor” no more than one year prior to use. The law also imposes certain posting and notice requirements to applicants and employees subject to the use of AEDTs.
The DCWP is vested with the authority to amend the Rules of the City of New York under the New York City Charter and New York City Administrative Code. As detailed below, the DCWP’s final rules make a number of noteworthy changes and attempt to clarify the law.
1. The rules attempt to clarify the scope of covered AEDTs.
Local Law 144 defines an AEDT as:
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 making employment decisions that impact natural persons.
The final rules seek to clarify two of the key phrases within this definition.
The final rules define “machine learning, statistical modeling, data analytics, or artificial intelligence” as a group of mathematical, computer-based techniques:
The phrase “to substantially assist or replace discretionary decision making” is defined as:
Notably, this definition appears to permit employers to use the AEDT without conducting a bias audit where an AEDT’s output falls outside the specified circumstances.
Local Law 144 provides several examples of tools outside the scope of covered AEDT, i.e., calculators, junk email filters and spreadsheets. The final rules, however, do not provide any further examples.
Reproduced with permission. Originally published by Law360, New York (April 19, 2023).
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