New York City adopts Final Rules
on Local Law 144 for Curbing AI Bias
in Employment Decisions,
Effective 5 July 2023

NYC AI Bias Law was finalized yesterday, April 6 and its enforcement was reset for July 5, 2023.
New York City’s Department of Consumer and Workplace Protection released the highly anticipated final rules for Local Law 144 of 2021, also known as NYC AI Bias Law. The specific Law regulates the use of automated employment decision tools (AEDT) for candidates and employees within New York city and requires algorithm-based technologies for recruiting, hiring, or promotion to be audited for bias before being used. While Local Law 144 initially would take effect on January 1, 2023, it had been postponed for April, 15 2023 and yesterday, DCWP stated that enforcement will begin, on July 5, 2023.
Various concerns raised during the public comment period, including those raised by employers, employment agencies, law firms, AEDT developers and advocacy organizations, resulted in changes that are present in these final rules. According to DCWP, these changes include:
  • Modifying the definition of “machine learning, statistical modeling, data analytics, or artificial intelligence” to expand its scope as follows: “a group of mathematical, computer based techniques:
    • that generate a prediction, meaning an expected outcome for an observation, such as an assessment of a candidate’s fit or likelihood of success, or that generate a classification, meaning an assignment of an observation to a group, such as categorizations based on skill sets or aptitude
    • for which a computer at least in part identifies the inputs, the relative importance placed on those inputs, and, if applicable, other parameters for the models in order to improve the accuracy of the prediction or classification.”
    The requirement for inputs and parameters to refined through cross-validation or by using training and testing data that was added in the second version of the rules has been removed
  • Clarifying the examples of a bias audit: This bias audit is necessary even though the employer is not using the AEDT to make the final hiring decision, but only to screen at an early point in the application process.
  • Adding a requirement that the bias audit indicate the number of individuals the AEDT assessed that are not included in the calculations because they fall within an unknown category, and requiring that number be included in the summary of results
  • Allowing an independent auditor to exclude a category that comprises less than 2% of the data being used for the bias audit from the calculations of impact ratio
  • Clarifying when an employer or employment agency may rely on a bias audit conducted using the historical data of other employers or employment agencies: Only if (1) such employer or employment agency provided historical data from its own use of the AEDT to the auditor or if (2) such employer or employment agency has never used the AEDT
  • Clarifying that an employer or employment agency may rely on a bias audit that uses test data if insufficient historical data is available to conduct a statistically significant bias audit. If a bias audit uses test data, the summary of results must explain why historical data was not used and describe how the test data used was generated and obtained.
  • Providing examples of when an employer or employment agency may rely on a bias audit conducted with historical data, test data, or historical data from other employers and employment agencies
  • Clarifying requirements for Published Results, which must be made publicly available by the employer or the employment agency before the use of an AEDT, on the employment section of their website and must include:
      01. The date of the most recent bias audit of the AEDT and a summary of the results, which shall include:
      • the source and explanation of the data used to conduct the bias audit
      • the number of individuals the AEDT assessed that fall within an unknown category
      • the number of applicants or candidates
      • the selection or scoring rates, as applicable, and the impact ratios for all categories
      02. The distribution date of the AEDT.
You can read more detailed information about NYC Bias Law and our respective solution here.