Artificial Intelligence Continues Getting the Regulators’ Attention

Employers who rely on artificial intelligence driven tools for their recruiting and hiring processes may face new regulations in New York. A bill (A. 9314) proposed in the New York Assembly on February 28, 2024, would impose requirements on employers who use artificial employment decision tools (“AEDTs”) in hiring processes. This bill targets tools used for screening and hiring applicants and would make it an unlawful employment practice for employers to screen applicants with an AEDT for jobs “within the state,” unless the AEDT was subject to a disparate impact analysis in the past year.

The bill defines AEDT as “any system used to filter employment candidates or prospective candidates for hire in a way that establishes a preferred candidate or candidates without relying on candidate-specific assessment by individual decision-makers.” While the bill explicitly states that the disparate impact analysis would not need to be publicly filed and would be “subject to all applicable privileges,” it does require that prior to the implementation of an AEDT, employers would need to post a “summary of the most recent disparate impact analysis” and “the distribution date of the tool” on its website.

Employers would also be required to provide the state’s Department of Labor with this summary on an annual basis. The proposed law does not provide for civil monetary penalties for employer violations. Rather, the state’s Attorney General or Department of Labor Commissioner would be able to initiate investigation into possible violations and could bring actions in court to correct alleged violations. If enacted, the bill would go into immediate effect.