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Answers to your questions about NYC’s new law on automated employment decision tools

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Here at CodeSignal, our mission is to help companies go beyond the noise of technical hiring with automated and live technical interviewing solutions. In this same spirit, we aim to go beyond compliance by ensuring our product and processes are fair, as well as supporting clients in navigating ongoing legislation. 

Below, we answer common questions our customers are asking about New York City Local Law 144, NYC’s new law on employers’ use of automated employment decision tools in hiring, that is set to go into effect in 2023. 

Disclaimer: The information provided in this document does not, and is not intended to, constitute legal advice; instead, all information available in this document is for general informational purposes only.    

What does NYC Local Law 144 say? 

New York City Local Law 144 regulates employers and employment agencies’ use of “automated employment decision tools” (AEDT) in making employment decisions. It applies to all New York City-based employers and employees. In summary, the law requires employers to:

  • Ensure automated employment decision tools have undergone an independent bias audit in the last year 
  • Publicly display a summary of the results of the most recent bias audit and distribution data for the tool on the employer or employment agency’s website
  • Provide candidates with 10 business days of advanced notice before the use of an automated tool 
  • Provide candidates with 10 business days of advanced notice regarding the job qualifications and characteristics the tool will assess 
  • Allow candidates to request an alternative selection process or accommodation
  • Provide information on the type, source, and retention policy relating to data collected for the AEDT

What are “automated employment decision tools”? 

AEDT includes “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 employment decisions.

Is CodeSignal’s product considered an “automated employment decision-making tool”?

As the law is currently written, CodeSignal is unlikely to be considered an AEDT, though we still recommend our customers seek legal advice. CodeSignal will continue to monitor this legislation and keep clients up-to-date with any pertinent changes.

When does NYC Local Law 144 go into effect?  

The statute takes effect on January 1, 2023. However, it will not be enforced until April 15, 2023. 

Who is considered a “candidate for employment”?

A candidate for employment is “a person who has applied for a specific employment position by submitting the necessary information and/or items in the format required by the employer or employment agency.” This law applies to candidates, employees, and employers located in New York City.

What is the “bias audit” mentioned in NYC Local Law 144?

Employers must have an “independent auditor” assess whether the use of the tool results in disparate impact based on categories such as race, ethnicity, or sex. As of December 2022, the law provides no further details on what this audit is supposed to examine, how it is supposed to be conducted, or how its findings are to be used. 

Per the law, the only explicit requirements are that:

  1. The audit be conducted annually by an “impartial” third party, and
  2. A summary of its results should be published on the employer’s or employment agency’s website.

What happens with the bias audit results?

Bias audit results must be posted on the employer’s or employment agency’s websites annually. As of December 2022, it is unclear if customers must “pass” the audit or what the criteria are to “pass.” 

What information should an AEDT notice contain? 

An AEDT Notice should include the following information: 

  • Notice date
  • Notice expiration date
  • 10-day waiting period notice
  • Employer or employment agency name
  • Job position title
  • Brief explanation of AEDTs
  • Purpose(s) for which the AEDT system will be used
  • Types of AEDTs used
  • Job qualifications and characteristics the AEDT will evaluate
  • Right to request alternative or accommodation
  • AEDT data practices

Employer and vendor responsibilities 

Since the passage of Local Law 144 in December 2021, NYC’s Department of Consumer and Worker Protection (DCWP) has released two proposed updates to the rules, as well as hosted two public hearings to discuss changes. While a decision has not been made on these proposed changes yet, CodeSignal’s Assessment Research team has been actively monitoring these proposed changes, attending public hearings, and partnering with legal counsel to ensure compliance with the new law.

While NYC Local Law 144 has some ambiguities, CodeSignal is committed to ensuring clients feel confident about what is required of them. 

Employer’s ResponsibilityCodeSignal’s Responsibility
– Provide disclosure of the use of automated employment decision tools
– Hire an independent auditor to conduct a bias audit annually
– Publicly post results of such bias audit 
– Provide candidates 10 days advance notice with information about the use of an automated decision tool, as well as the the job qualifications and characteristics the tool will assess 
– Provide candidates notice of the type, source, and retention policy relating to data collected for the AEDT
– Support clients with understanding how CodeSignal aligns with NY Local Law 144 
– Partner to provide necessary data for any bias audits for candidates or roles located in NYC
– Inform employers of the job qualifications and characteristics measured by an AEDT, as well as the data retention policy of the AEDT
– Provide insight into alternatives to automated decision making, in the case a candidate chooses to opt out 
– Provide process documentation of how CodeSignal’s processes work

Additional CodeSignal support offerings

In addition to remaining complaint with NYC Local Law 144, further offerings to support legal defensibility and fairness include: 

Learn more

Want to learn more about how CodeSignal can help you reach your technical hiring goals while maintaining compliance with ever-changing employment regulations? Schedule a discovery call today. 

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