Ensuring Fair Hiring Practices with AI: New York Local Law 144

Introduction

New York City’s Local Law 144, effective from July 5, 2023, represents a significant step towards regulating the use of automated employment decision tools (AEDTs) to ensure fair hiring practices. This law mandates bias audits and transparency measures to prevent discrimination in employment decisions. As businesses adapt to these new regulations, understanding the implications of Local Law 144 and how to comply is crucial.

Understanding New York Local Law 144

Local Law 144 is designed to address the potential biases in AEDTs used for employment decisions. Key provisions of the law include:

• Bias Audits: Employers and employment agencies must ensure that AEDTs undergo a bias audit within one year of their use [1]. The audit must assess the tool’s impact on different demographic groups and calculate selection rates based on categories required by the U.S. Equal Employment Opportunity Commission’s EEO Component 1 report [2].
• Transparency and Disclosure: Information about the bias audit must be publicly available, and employers must provide notices to employees or job candidates at least 10 business days prior to using AEDTs [1].
• Prohibition of Unaudited Tools: Employers cannot use AEDTs unless they have been subject to a bias audit and the results are disclosed [1].
• Reporting and Accountability: Employers must report the results of the bias audit and ensure compliance with the law’s requirements [2].

Recent Developments

Local Law 144 has been actively enforced since July 5, 2023. The New York City Department of Consumer and Worker Protection (DCWP) has held educational roundtables to clarify the law’s requirements and ensure that businesses understand their obligations [1]. As of now, specific companies have not been publicly noted as out of compliance or fined under the law, but enforcement actions are ongoing [1].

Employment and the Role of Third-Party Audits

Third-party audits are critical for ensuring compliance with Local Law 144, particularly in the employment sector. These audits provide an independent assessment of AEDTs, helping to identify and address biases. Key benefits of third-party audits include:

1. Ensuring Fairness and Non-Discrimination: Audits help verify that AEDTs are fair and non-discriminatory, aligning with the law’s principles of equal employment opportunities [2].
2. Transparency and Accountability: Independent audits ensure that AEDTs are transparent and accountable, fostering trust among job candidates and compliance with the law’s requirements [2].
3. Continuous Monitoring: Regular audits support continuous monitoring of AEDTs, ensuring ongoing compliance and addressing any emerging biases [2].
4. Legal Compliance: Audits help generate and validate the technical documentation required by the law, ensuring that all necessary information is accurately recorded and maintained [2].

How Canopy Can Help

Canopy offers comprehensive solutions to help businesses comply with New York Local Law 144 and promote fair hiring practices:

1. Compliance Framework: Canopy provides a robust framework to help businesses develop and implement policies that comply with Local Law 144. This includes guidelines for regular reviews and updates to ensure ongoing compliance.
2. Bias Audit Tools: Canopy offers tools to conduct thorough bias audits of AEDTs. These tools help businesses ensure that their employment decision tools are fair and aligned with the law’s requirements.
3. Third-Party Audits: Canopy facilitates third-party audits to provide an independent assessment of AEDTs. These audits help verify compliance with Local Law 144, ensuring fairness, transparency, and accountability.
4. Training Programs: Canopy provides training programs to educate employees and managers about the provisions of Local Law 144 and the importance of fair hiring practices. This helps create a culture of fairness and compliance within the organization.
5. Advisory Support: Aspen Analytics, their experts, and partners in employment law firms can assist businesses in navigating the complexities of Local Law 144, providing guidance on compliance and defending against potential claims.
6. Continuous Monitoring: Canopy’s solutions include continuous monitoring of AEDTs to detect and address any emerging biases. This proactive approach ensures that businesses remain compliant with Local Law 144 and other evolving regulations.

Conclusion

New York City’s Local Law 144 represents a significant step towards ensuring fair hiring practices through the regulation of AEDTs. As businesses strive to comply with these regulations, Canopy’s comprehensive solutions provide the tools and support needed to ensure fair and transparent employment decisions. By partnering with Canopy, businesses can not only comply with the law but also foster a culture of equity and fairness.

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