New York City Holds Second Public Hearing on Updated Proposed Rules for Automated Employment Decision Tools

On January 23, 2023, the New York City Department of Consumer and Worker Protection (DCWP) held a public hearing on updated proposed rules to implement the city’s automated employment decision tools (AEDT) law (Local Law 144). As we previously reported, the updated proposed rules were issued following a significant volume of public input concerning an initial version of the rules released on September 23, 2022.

Like the initial hearing convened in 2022, the second hearing attracted a sizeable audience of more than 240 attendees. This robust attendance confirmed the significant level of attention that this law and the proposed rules have generated. Ten individuals presented comments orally, and eighteen individuals or groups submitted written comments for DCWP’s consideration. The feedback addressed several important issues for employers and others impacted by the law, including the following:

1. The definition of an AEDT. Members of the public continue to express concern about the definition of an AEDT. The input continues to encompass a broad range of views, from individuals who have expressed concern that the focus on AEDTs that “substantially assist or replace discretionary decision making” is “overly stringent” and will not regulate many of the tools used by employers, to stakeholder concerns that the existing definitions may encompass technologies that perform screening functions related to basic qualifications for positions.
2. Required notice periods. Another topic of continued attention is the potential consequence of the requirement to provide notice to candidates and employees on the website of the employer or employment agency, in the job posting, or via U.S. mail or email “at least 10 business days” prior to use of an AEDT. Specifically, some members of the public have expressed concern that this requirement could disadvantage applicants residing in New York City by impacting the timeframe within which employers can move forward to screen and select such candidates for employment relative to other applicants.
3. Definition of “independent auditor.” The updated proposed rules explain that an “[i]ndependent auditor” excludes a person or group that “is or was involved in using, developing, or distributing the AEDT” or “at any point during the bias audit, has an employment relationship with an employer or employment agency that seeks to use or continue to use the AEDT or with a vendor that developed or distributes the AEDT.” Some members of the public have suggested that this language is overly restrictive and should be modified to allow the required audits to be performed utilizing internal resources.
4. Implementation date. In response to an inquiry from a participant, DCWP restated its intention to delay enforcement of the law until April 15, 2023, but offered no timeline for the publication of the final rules. Some members of the public have urged DCWP to postpone the enforcement of the law further to allow employers adequate time to come into compliance with the law, as clarified by the yet-to-be-finalized rules.

What’s Next for Employers

Employers and employment agencies that utilize automated decision tools that fall within the scope of the law to screen candidates for employment or employees for promotion within New York City may wish to remain alert for the eventual publication of final rules. In addition, businesses that employ individuals within the city, as well as employers that operate in other jurisdictions, may wish to monitor other developments related to the use of artificial intelligence and automated systems.

For example, on January 10, 2023, the U.S. Equal Employment Opportunity Commission (EEOC) issued its Draft Strategic Enforcement Plan for 2023–2027, which identified “screening tools or requirements that disproportionately impact workers based on their protected status, including those facilitated by artificial intelligence or other automated systems, pre-employment tests, and background checks” as among the agency’s subject matter priorities for fiscal years 2023–2027. Interested parties may submit comments regarding the draft plan on or before February 9, 2023. Underscoring the expected focus on the use of artificial intelligence by employers, the EEOC has scheduled a January 31, 2023, hearing, “Navigating Employment Discrimination in AI and Automated Systems: A New Civil Rights Frontier.”

The New York office of Ogletree Deakins will continue to monitor developments with respect to the implementation of the new law and its impact on the workplace, and will post updates on the Cybersecurity and Privacy, New York, and Technology blogs as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.