New York City's Department of Consumer & Worker Protection Revises Proposed Rules and Schedules New Hearing Date Regarding Automated Employment Decision Tools Law

Seyfarth Synopsis: New York City's Department of Consumer & Worker Protection ("DCWP") revised its proposed rules in light of comments and testimony it received in response to the initial proposed rules implementing Local Law 144 of 2021 ("Local Law 144"), which regulates employers' use of automated employment decision tools, including artificial intelligence.  A second public hearing will be held on January 23, 2023.

On November 4, 2022, the DCWP held a hearing to provide the public with an opportunity to comment on the Department's proposed rules implementing Local Law 144. The highly-anticipated hearing was well attended by various constituencies and resulted in roughly 180 pages of comments. As a result of the public response to Local Law 144's proposed rules, DCWP has now published updated guidance and scheduled a second public hearing for January 23, 2023. 

According to DCWP, the changes to the proposed new rules:

1. Modify the definition of AEDT;
2. Clarify that an “independent auditor” may not be employed or have a financial interest in an employer or employment agency that seeks to use or continue to use an AEDT or in a vendor that developed or distributed the AEDT;
3. Revise the required calculation to be performed where an AEDT scores candidates;
4. Clarifies that the required “impact ratio” must be calculated separately to compare sex categories, race/ethnicity categories, and intersectional categories;
5. Clarifies the types of data that may be used to conduct a bias audit;
6. Clarifies that multiple employers using the same AEDT may rely upon the same bias audit so long as they provide historical data, if available, for the independent auditor to consider in such bias audit; and
7. Clarifies that an AEDT may not be used if its most recent bias audit is more than one year old.

As previously reported, DCWP will delay enforcement until April 15, 2023 while it finalizes the proposed rules.  In the meantime, employers should assess the tools that may qualify as an AEDT under NYC law and evaluate how the law and the current proposals impact their operations. 

Seyfarth continues to analyze the impact of the proposed revisions and will provide periodic updates to assist employers comply with Local Law 144.