Nathaniel M. Glasser, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC, office, was quoted in SHRM, in “NYC Outlines Compliance Requirements for AI Bias Law,” by Roy Maurer.

Following is an excerpt:

New York City issued its final rule regulating the use of automated employment decision tools (AEDTs) in hiring and announced that enforcement of the law will begin July 5.  

The law took effect on Jan. 1, 2023, after rules were proposed in September 2022 and later revised in December 2022 following a public hearing. The final rule adopts the December proposal, with modest amendments and clarifications related to important definitions contained in the law and how bias audits will meet compliance. …

Defining AEDTs

Employers are still trying to understand the scope of the law and exactly what is covered, said Nathaniel Glasser, an attorney in the Washington, D.C., office of Epstein Becker Green and co-leader of the firm's AI practice group. The law applies to tools that, "in layman's terms, are technologies that are used to make hiring or promotion decisions," he said.

Depending on how the tools are used, these could include resume screeners, video or text interview software, and cognitive or neurological assessments, he added.  

The law defines AEDTs as "any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues simplified output, including a score, classification, or recommendation" that is used to "substantially assist or replace discretionary decision making for making employment decisions that impact natural persons."

For example, an automated process that screens resumes and schedules interviews based on the screening results would fall under the law's requirements. On the other hand, an automated process that simply transfers applicant information from resumes to a spreadsheet, without otherwise scoring or ranking the applicants, would not be subject to the law's requirements.

"Sourcing tools are not considered AEDTs because the law defines 'candidates for employment' as individuals who have applied for specific positions, whereas sourcing tools are used to identify potential candidates for employment," Glasser said. "The law clearly applies to technologies used as the determinative factor to decide whether to move candidates along in the hiring or promotion process, as well as to technologies whose outputs are clearly given more weight than other factors in making such decisions. But there remain questions as to whether the law applies to technologies used early in the decision-making process that may be given different weights depending on the individual hiring manager or recruiter interpreting the output." 

Conducting Bias Audits

Under the law, a bias audit must be conducted "no more than one year prior" to the use of an AEDT by employers or employment agencies. …

The final rules clarify the required calculations for a bias audit, as well as the provisions that address the use of historical and test data.

"The bias audit must use data from the employer's or employment agency's own historical use of the AEDT," Glasser said. "Where, however, this historical data is insufficient—either because the employer or employment agency has never used the AEDT, or because its historical data is not statistically significant to conduct a bias audit—the independent auditor may use historical data of other employers or employment agencies."

Test data can be used as an alternative, but in that case, the audit must explain why historical data could not be used. …

"Ultimately, the responsibility lies with employers covered by the law to conduct a bias audit, as liability runs to employers for failing to comply with the law," Glasser said. "The final rule clarifies that an independent auditor cannot have financial or employment ties to a creator or user of the tool; thus, the bias audit cannot be performed by the vendor. However, nothing in the law prohibits the vendor from hiring an independent auditor to produce a bias audit on behalf of an employer." …

Providing Notice …

Glasser said that in preparation for the July 5 enforcement date, employers using AEDTs should consider analyzing and determining whether their use of the technology triggers a need to comply with the law.

"If using an AEDT in a manner requiring compliance, [employers should] identify and gather data to conduct a bias audit, retain an independent auditor to conduct the audit, consider where and how to publish the results of the audit, and ensure compliance with all notice requirements," he said.

Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.