New York City Starts to Regulate AI Used in Hiring Tools
Employers are preparing for a new law going into effect Wednesday in New York City that will be the first in the nation to regulate the use of automation and artificial intelligence in hiring decisions. The law, known as NYC 144, requires employers that use certain kinds of software to assist with hiring and promotion decisions—including chatbot interviewing tools and resume scanners that look for keyword matches—to audit those tools annually for potential race and gender bias, and then publish the results on their websites.
There is growing public concern about the role that algorithms play in essential facets of people’s lives, from employment and education to life insurance and mortgage lending. Because algorithms are difficult, if not impossible, for most people to untangle and understand, legislators have focused on mandating transparency rather than on regulating the software itself.
While NYC 144 is designed to root out indications of potential discrimination in employment decisions, “it’s really not an antibias law. It’s a public disclosure law," said Erin Connell, who represents employers as a lawyer with Orrick, Herrington and Sutcliffe.
Legislators and industry groups across the nation are watching New York City as a test case for future technology regulation, she added. Under the new law, employers will audit any software that plays a significant role in their hiring and promotion decisions and will publish so-called adverse impact ratios, which show whether a procedure has a disparate impact on a particular race or gender.
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