April 20, 2023
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The New York City Department of Consumer and Worker Protection, or DCWP, announced on April 6th that the final rules regarding the City’s Environmental Law 144 will take effect on July 5th.
Local Law 144 restricts employers and employment agencies from using automated employment decision tools in hiring and promotion unless they have been audited for bias by an “independent auditor” one year prior to implementation. In addition, the Act imposes certain posting and advertising requirements for applicants and employees for use by ADTs.
The DCWP is empowered to amend New York City regulations pursuant to the New York City Charter and the New York City Administrative Code. As detailed below, the DCWP final rules make several noteworthy changes and attempt to clarify the law.
1. The regulations attempt to clarify the scope of covered AEDTs.
Environment Act 144 defines AEDT as:
Any computational process derived from machine learning, statistical modeling, data analysis, or artificial intelligence that produces simple results, including scores, classifications, or recommendations, that can be used to significantly assist or replace decision making in making impactful business decisions. Natural people.
The final rules seek to clarify two of the key phrases in this definition.
The final rules define “machine learning, statistical modeling, data analytics, or artificial intelligence” as a group of mathematical, computer-based techniques.
- Generating a prediction, eg, an assessment of a candidate’s aptitude or likelihood of success, or classification, eg, classifying applicants based on skill sets or aptitude. And
- To this end, the computer can at least partially measure the goals and their relative importance and, if necessary, other parameters to improve the accuracy of the model’s predictions.
The phrase “to substantially assist or replace reasoned decision making” is defined as:
- Relying only on a simple output (result, label, classification, rating, etc.), without other factors; Or
- To use a simple output as one of the set of criteria that weighs more than the other criteria in the set; Or
- To use simple output to override conclusions drawn from other factors, including human decision-making.
In particular, this definition appears to allow employers to use the AEDT without performing a bias audit when the AEDT result falls outside the specified conditions.
Environment Act 144 provides several examples of devices outside the scope of the covered AEDT, ie, calculators, junk email filters and spreadsheets. The final regulations, however, do not provide any additional examples.
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Reproduced with permission. Originally published by Law360, New York (April 19, 2023).
The attorneys at Gibson Dunn are available to assist you with any questions you may have regarding these developments. Please contact your most frequent Gibson Dunn attorney, any member of the firm’s Labor and Employment practice group, or the authors:
Harris M. Mufson – Co-Chairman, Hacker Group, New York (+1 212-351-3805, [email protected])
Daniel J. Moss – New York (+1 212-351-6338, [email protected])
Emily Maxim Lamm – Washington, DC (+1 202-955-8255, [email protected])
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