New York City Issues Final Rules for AI Law as it relates to AEDTs

With the onset of AI, start paying attention to how the AI laws apply to AEDTs. The New York City Department of Consumer and Worker Protection (DCWP) recently published updated rules for implementing an artificial intelligence (AI) law. This law has been postponed twice to allow the final rule to be published.

The DCWP initially published the proposed rules on Sept. 23, 2022. The department published an updated version of the proposed rules on Dec. 23, 2022, before publishing a final version on April 6, 2023. The AI law is currently scheduled to become effective on July 5, 2023. Numerous employers and technology vendors provided comments leading up to the law’s enforcement date.

AI laws apply to AEDTs that:

• Rely on simplified output with no other facts considered
• Utilize a simplified output as a set of criteria that’s weighted more than any other criteria
• Use a simplified output to overrule conclusions gained from other factors, including human decision-making

The law prohibits employers and employment agencies from using AEDTs unless the tool has been subject to an independent bias audit within one year of the use of the tool; a summary of the bias audit is made publicly available; candidates and employees are provided with notices regarding AEDTs usage; and candidates and employees are able to request an alternative evaluation process as an accommodation, if available. Employers may be subject to civil penalties for violations of the new law.

Employer Takeaways

Recently, there’s been a higher number of employers adopting AI systems in the workplace. The increased use of these tools has raised concerns among officials and lawmakers throughout the country, including the Biden administration, which recently announced accountability measures for AI systems.

While AI technology in the employment context is largely unregulated, states and localities, such as New York City, are starting to take action to address potential issues and risks. Regulating these technologies could help ensure they’re reliable and safe. Accordingly, employers who do not operate in New York City should still take note of this new law and continue to monitor AI trends throughout the country.

Employers should stay tuned for updates from TIG Advisors. For more information, Contact TIG Advisors today.

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