New York City Holds Roundtable on the use of Automated Employment Decision Tools (LL144)

Seyfarth Synopsis: On May 22, 2023, New York City’s Department of Consumer and Worker Protection (“DCWP”) held an educational roundtable with business advocates and employers to discuss the final rules implementing New York City Local Law 144 of 2021 (“Local Law 144”), which regulates the use of automated tools in employment decisions. The stated purpose of this roundtable was to revisit the requirements under the law and to address questions that remain with the intention of releasing FAQ-type guidance to assist employers prior to Local Law 144’s July 5, 2023 enforcement date.  

Following up on the April 6, 2023 release of its highly anticipated final rules implementing Local Law 144, DCWP held a roundtable discussion to address questions it has received in an attempt to further clarify the law’s requirements and to assist those responsible for compliance. Seyfarth submitted questions in advance of the roundtable for DCWP to consider and provide further guidance on some of the open questions that had remained. While it is unclear if a transcript of the roundtable is expected, DCWP promised that it would release FAQ guidance, and offered clarifications on the following topics, among others. 

• Scope of Local Law 144’s Jurisdiction

Under Local Law 144, § 20-871(b) provides that “In the city, any employer or employment agency that uses an automated employment decision tool to screen an employee or a candidate who has applied for a position for an employment decision shall notify each such employee or candidate who resides in the city” of certain required information. (emphasis added). DCWP elaborated that the key factor that will determine whether Local Law 144 applies to a position will be the physical location of the position. For example, if a position is located in New York City, then both a bias audit and notice to New York City residents will be required. On the other hand, if a position is located outside of New York City, neither a bias audit nor notice will be required, even if New York City residents apply for the position. For instance, if a position is located in Jersey City, New Jersey and a Brooklyn resident applies, the position does not fall within the scope of Local Law 144, which means neither a bias audit nor notice is required for an AEDT being used for that position.

DCWP also addressed fully remote positions, clarifying that if an employer only has a New York City office, then Local Law 144 will apply. Conversely, if an employer does not have a New York City office, then Local Law 144 will not apply to any remote positions. Employers who have physical locations both inside and outside of New York City will require a fact-specific analysis when filling remote positions. Such employers may want to consider the following factors: (1) how often will the employee in question work on location in New York City, (2) for which physical location will the remote employee perform work, and (3) whether the remote employee will have to ever go to an office, and if so, where will that be. 

Guidance regarding the scope and jurisdiction of Local Law 144 is welcome as employers seek to come into compliance.

• Notice Requirements Clarified

DCWP provided additional context regarding compliance with the notice provision of Local Law 144. While it has been established that notice could be provided in a job posting, via US mail or email, on the employment section of an employer’s career website, or through a documented policy or procedure for employee promotion situations, DCWP further elaborated that (1) the notice does not have to be position specific, and (2) that the 10 business day notice requirement is measured as of the time the first notice is posted. 

• AEDTs and Talent Sourcing Strategies

Under the Final Rules implementing Local Law 144, there were questions regarding the impact the law may have on employers that use AEDTs as part of their talent sourcing strategies in situations where a tool is utilized to evaluate internal or external resume databases or publicly available information concerning individuals who have either applied for a different position at an employer at a different point in time, or individuals who have never applied for a position with the employer or employment agency at all. 

DCWP pointed to § 5-300 of the Final Rules, which defines a “candidate for employment” to mean “a person who has applied for a specific employment position by submitting the necessary information or items in the format required by the employer or employment agency.” Thus, DCWP explained that if an AEDT is utilized to evaluate candidates that have not applied for a specific position, neither a bias audit nor notice would be required. 

FAQ Publication and Enforcement Deadline

It appears that DCWP is committed to sticking with its July 5, 2023 enforcement deadline. With roughly six weeks to go, and no indication from DCWP as to when formal FAQs will be released, those who believe they may be impacted by this law should now be assessing the tools they use that may qualify as an AEDT under Local Law 144, evaluating how the final rules impact their operations, and what next steps need to be taken to mitigate any non-compliance risks. 

Workplace Solutions

We encourage you to contact the authors of this article or a member of Seyfarth’s People Analytics team as soon as possible if your organization seeks assistance in complying with Local Law 144.