New York City - Impact Ratio Audit

New York City has implemented a law regulating the use of automated employment decision tools (AEDTs) by employers. This pioneering legislation mandates that employers audit their HR technology for bias and disclose the findings.  The significance of this New York City law lies in its proactive approach to regulating AI and automation in employment practices amidst a broader national movement to address AI bias in the use of algorithms. This legislation is seen as a crucial step in combating workplace discrimination and bias, balancing the benefits of AI in streamlining HR processes against the risks of perpetuating biases. 

New York City's law requires bias audits to be conducted by independent third parties without financial ties to the employer. Audits are designed to assess potential disparate impacts on sex, race, and ethnicity.  Under this law, the responsibility for compliance rests with employers, not the AI tool vendors. Employers must ensure an unbiased audit of the AI tool is conducted within a year of its usage. The law does not mandate specific corporate actions in response to audit findings, and a biased audit can cover multiple job types. If demographic data is insufficient, test data may be used. Employers and employment agencies are required to publish a summary of the most recent bias audit, including the audit date, data sources, demographic breakdowns, selection rates, and impact ratios. These audits are valid for one year, necessitating regular reevaluation to maintain compliance.