UPDATE: Local Law 144 will now go into effect on May 6, 2023.
This is an update to our initial post on the upcoming NYC Law.
With less than six months to go before a new AI audit law goes into effect in New York City, new details are emerging to give us a better understanding of how the legislation–and penalties for noncompliance–will be implemented.
Local Law 144 of 2021, as it’s known, issues updated guidelines for employers using AI in hiring. Part of a quickly growing practice, AI tools are in high demand for companies looking to speed up preliminary candidate screening and enable efficiency in the hiring process. In order to avoid introducing unintended bias into those actions, however, the AI must be responsible. There are several key attributes of Responsible AI, the net result of which is fully explainable machine learning systems structured to avoid biases that could skew results unfairly.
There are still many questions around the details of the NYC audit law, which says companies using “automated employment decision tools” must first submit them to an independent bias audit and notify candidates at least ten days before an AI tool is used to allow for accommodations. But now we know more about what happens to those who don’t comply.
The latest update:
- Each day an employer uses an automated employment decision tool in violation of the law counts as a separate violation.
- An employer’s failure to provide notice to a candidate or employee constitutes an additional daily violation.
- Potential violations will be viewed quite broadly, setting forth penalties applicable to “all subdivisions, paragraphs, subparagraphs, clauses, items or any other provision.”
- Fines for first time violations start at $375 per infraction; second violations start at $1350.
Plenty of questions still remain around the logistics of the new law, including who will conduct the required impartial audits and what standard will be used to determine any disparate impact on job candidates. We’ll be watching for those updates in the coming weeks and months, and will be sharing them here.
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