NYC issues automated employment decision tools FAQs that address some of the most pressing questions

The New York City Department of Consumer and Worker Protection (“DCWP”) has released a highly anticipated FAQ, providing additional guidance on Local Law 144. As we’ve discussed here and here, Local Law 144 prohibits employers and employment agencies. From using the Automated Employment Decision Tool (AEDT) in New York City for actions such as hiring and promoting (or in the process of hiring or promoting) unless you ensure that a bias audit has been conducted and necessary notices have been provided. It is aptly titled. “Automated Hiring Decision Tools: Frequently Asked Questions”. About six-page collection Questions to be asked It is divided into seven parts, touching on each of the 144 major aspects of environmental law. In this summary, we highlight the most important guidance provided by the DCWP in the FAQs.

Frequently asked questions explain the scope of the geographic reach of the law

Local Law 144 covers the use of AADs by employers or employing agencies “within the city”—which is found throughout the text of the law. While the law leaves this phrase open to interpretation, the FAQ provides a little more guidance. Specifically, AEDTs are used “within the city” (thus subject to the requirements of the Act):

• The workplace is at least partially in an office in NYC; Or
• The job is completely remote but the location associated with it is an office in NYC; Or
• Using AEDT, the location of the employment agency is NYC or, if the location of the employment agency is outside of NYC, one of the above bullets is true.

Even with this additional guidance, the chosen definition still leaves room for interpretation. For example, what does the second bullet mean? That is Remote work “Is the associated location an office in NYC?” If interpreted broadly, could this definition bring those who report to different offices (including the one in NYC) to be “affiliated with” the NYC-based office in remote areas of the Act? Relatedly, how “connected” to an office should a remote location be covered? This is also not addressed in the FAQs.

A third bullet appears to expand the statute’s scope to apply to jobs outside of NYC. For example, does an employment agency located in NYC that conducts job searches outside of NYC still have to comply with Local Rule 144 to the extent that it uses covered AEDTs as part of its placement search? In the same way, if an employment agency is conducting a job search to find the position in theory can Does it relate to the NYC office – does that also fall under the law? However, if Local Law 144 applies, the candidates are New York City. Residents The employer or recruitment agency must receive notice that the AEDT will be used. This seems inconsistent with some of the definitions above.

So, while we have some clarity on what “within the city” means, the frequently asked questions create some confusion that may linger until it becomes clear how DCWP will enforce the law and/or how the courts will interpret it.

There are no “pass or fail” criteria built into the bias audit

Employers and employment agencies are required to publish a summary of the results of the most recent AEDT discrimination audit and the date on which AEDT began to be used. However, other than the publication and notice requirements, Environment Act 144 does not require specific action based on the results of an AEDT bias audit (example, where the results indicate the bias with which the instrument was used). Instead, as the FAQ reiterates, employers and recruitment agencies must comply with all relevant anti-discrimination laws and regulations to determine any necessary action based on the results of an AEDT discrimination audit.

Therefore, employers should proceed with caution before conducting an “office” bias audit and releasing it to the public.

The Act does not appear to cover an employer’s recruitment or outreach efforts.

The FAQ confirms that the use of ADTs to “evaluate a person who is not an employee being considered for promotion and has not applied for a specific position” is not covered by Local Rule 144. If an employer or recruitment agency uses AEDT to “screen a stand bank, process candidates or invite applications.

Interestingly, this appears to be the case in the law against so-called “micro-targeting” of job advertisements by employers or recruitment agencies. Micro-targeting usually relies on certain behavioral patterns observed by individuals (or in this case, job seekers) to ensure that job postings are directed to a specific set of candidates. While the FAQ makes clear that AI-powered employment cannot be covered by Local Rule 144, that does not mean such activities are beyond the reach of federal, state, or local anti-discrimination laws. Therefore, employers, whether AI-powered or not, must ensure that job postings target individuals or candidate pools based on objective criteria that demonstrate success in a given role, not any protected trait.

The “statistical significance” of bias audit remains undefined

DCWP declined to “set a specific standard for statistical significance” regarding the required bias audit. Statistical significance helps to prove that a given result or observation in a sample cannot be the result of chance. This is of course important in the context of a bias audit where the results are. can Being indicative of different influences. Instead of defining “statistical significance,” the DCWP chose to give independent auditors some discretion, stating that “when the independent auditor determines that there is insufficient historical data to conduct a statistically significant bias audit, test data may be used to conduct a bias audit.” He said.

If demographic data is unavailable or insufficient, employers can use pilot data or historical data from other employers.

A significant concern expressed by many stakeholders during the rulemaking process is how to conduct a bias audit if the employer does not have demographic information or significant historical data. FAQs provide guidance here. First, the guidance confirms that if employers and recruitment agencies do not collect demographic data or have little historical data, they can use test data to conduct bias audits. Employers can also use historical data when insufficient historical data is available. other Employers or employment agencies to audit discrimination. However, employers and employment agencies can only rely on this information if they have provided historical data to an independent auditor conducting a bias audit since the use of AEDT, or when the employer first used AEDT. Therefore, employers and recruitment agencies can take some comfort here as the guidance gives them some flexibility to decide how best to proceed where they lack sufficient information.

Employers may not consider demographic information

Importantly, the guidance ensures that employers and recruitment agencies are not permitted to infer or infer demographic data when none is available (ie, using a proxy method) and can instead: (i) use historical data from other employers or recruitment agencies; ; or (ii) test data. This is critical for employers and/or employment agencies that do not collect specific demographic information, and therefore need to decide which information they want to rely on to conduct a bias audit. But it is important to note that neither the questions nor the law Order Employers and employment agencies begin collecting this information (although in practice, most employers with 100 or more employees must submit EEO-1 Component 1 data, which is the same race, ethnicity, and gender information required to conduct Local Rule 144 discrimination audits).

“Experimental data” is mostly undefined

As employers remember from Rules According to the DCWP, “test data” refers to “data used to conduct bias audits that are not historical data. While the rules provide three examples of how an employer may use certain data, the FAQ does not clearly define “test data.” The FAQs similarly do not provide a clear definition or framework for what constitutes “test data.” Rather, and in the sense that “[t]Allow for flexibility and development of best practices,” the questions explain that a summary of bias audit results should include the source and explanation of the data used to conduct the bias audit and, when test data are used, the information was prepared or prepared.

An ADT vendor bias audit can be conducted on its own equipment.

The FAQ confirms that while AEDT vendors—those responsible for creating or developing AEDT—cannot perform a bias audit of their own equipment, an independent auditor may conduct a bias audit of the equipment. The DCWP was prompt, but employers and employment agencies are responsible for ensuring that they do not use AEDT unless it has been audited for bias and the vendor that created the AEDT. is not Responsible for instrument bias audit.

DCWP is ready to enforce Environmental Law 144.

Implementation of Local Law 144 took effect on July 5, 2023. Frequently asked questions about compliance with Local Law 144 provide that complaints can be made by calling 311 or visiting the DCWP website at nyc.gov/dcwp. Complainants must include all of the following information: (i) job advertisement or job description, (ii) name and type of AEDT, (iii) notice if any, and (iv) explanation of alleged violation (eg, AEDT used without notice). Claims of discrimination involving the use of AEDT must go to the City Commission on Human Rights, which enforces the NYC Human Rights Act, and DCWP will refer any claims of discrimination to the City Commission.

Where do employers and recruitment agencies go from here?

These FAQs provide helpful guidance for employers and recruitment agencies seeking to ensure compliance strategies. Now that enforcement is taking place, it’s vital that employers and recruitment agencies take the steps we’ve previously recommended (here, here and here). In particular, immediate steps employers and recruitment agencies should take include:

• Conduct an inventory of hiring, promotion, and performance review processes to ensure that AEDTs are used (if any) and within the law.
• Review the practices governing and surrounding demographic data collection and: (i) determine whether there are any missing data; and (ii) sufficient information exists to conduct an unbiased audit. Although an independent auditor is the judge of statistical significance as a DCW, the employer or employment agency can still ensure that it has sufficient information to conduct a bias audit on its own or in conjunction with an independent auditor.
• Ensure that service agreements with AEDT suppliers include specific representations and warranties regarding compliance with Environmental Rule 144 and, if applicable, that the supplier has an independent auditor conduct an impartial audit of the AEDT provided before the employer purchases and implements the equipment.
• Develop a strategy to determine how the published “summary” of bias audit results will be viewed in practice. While the final rules and FAQs confirm what the resume should include, they do not provide recommendations for formatting, which is left to the discretion of employers and employment agencies.

While the FAQ is helpful, additional guidance may come from DCWP’s actual law enforcement. In the meantime, we recommend that employers and recruitment agencies take the steps outlined above (and those in our previous articles) and consult with counsel to ensure effective compliance. We will monitor DCWP’s enforcement priorities and actions as they unfold in the coming months.

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