New York City AI Bias Law - What You Need To Know to Avoid Fines

Local Law 144 is going to change the way NYC uses artificial intelligence to manage talent.
Are you prepared to comply? Find out more here!

New York City is soon implementing a law that will impact the way you hire and manage the talent at your company. This law will affect any company using artificial intelligence-based automated employment decision tools, as well as any candidate or employee residing within NYC.

 Are you in compliance with the new law? Find out now in our FAQ below!

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The NYC AI Bias Law is a new law coming into effect in 2023 that is being placed to prevent bias from happening within the hiring process and workplace. This new law states that any business operating within New York City using automated employment decision tools for recruiting, hiring, or promoting employees must not only perform an independent bias audit on their employment tools but must undertake a yearly audit to ensure that the tools continue to follow legislation.

This new law has been implemented in New York City because certain AI tools that are not properly designed or researched may actually lead to and perpetuate bias happening within the hiring process. New York City is creating guidelines that companies must comply with in order to 

This new law affects any business that has an office or employees working in any of the boroughs that make up New York City. Even if a company is headquartered and based elsewhere but has a New York City office, it must abide by this new legislation.

The new law was supposed to come into effect January 1, 2023, but due to a large number of public comments the City of New York has pushed the date back to April 15, 2023.

Employers that are caught using tools that have not been audited for bias by an independent third-party will face an initial fine of $500 and then $1500 daily for every subsequent violation. Each day the tool is used without an audit will count as a separate violation, and each candidate or employee not notified in advance will also count as a separate violation.

The law will be enforced by the NYC Office of the Corporation Counsel. The company misusing AI tools can be reported to the counsel by candidates or employees, and lawsuits can be filed against them for Title VII employment discrimination. While employees cannot take private right of action against companies, they can take class action against them.

To prove that an automated employment decision tool is acceptable and abides by New York City law, the tool must be impartially evaluated by an independent bias auditor. The audit report  should not be more than a year old. A tool that does not follow these regulations is banned from being used in New York City and fines will be given to any company using an unauthorized and unaudited automated employment decision tool.

A company also must let candidates know that they will be using an automated employment decision tool to assess them at least 10 business days in advance of its use in the process. 

Bryq’s talent intelligence has been impartially evaluated by an independent bias auditor and is perfectly fine for companies based in New York City to use when trying to hire and promote candidates into new roles. In fact, Bryq is proven to actually reduce bias and promote diversity and equity within the hiring and talent mobility processes.

Want more information about how Bryq complies with the new law? Schedule a meeting with our team today and check out our latest blog.

The Bryq talent intelligence solution was audited by Holistic AI, a London-based risk management company that confidently scales artificial intelligence systems. Bryq went through an extensive auditing process with Holistic AI and was given the green light to be used by companies working out of NYC once the audit was complete.

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In summary, this new AI bias law is going to change the way companies work within New York City. Those companies that do not abide by the new law will face consequences – but they don’t have to. To find out more about Local Law 144, visit our blog for an in-depth explanation of why it’s being put into law and what your company can do to comply with this new legislation.