A New York State AI employment law bill is in the works after legislation was introduced last month.
If passed, the law would regulate the use of artificial intelligence (AI) in certain employment practices, including hiring and promotion practices, as well as electronic monitoring of employees, among other items.
The proposed law is more expansive than the New York City AI hiring law, which went into effect in January 2023. However, city officials began enforcing their ordinance in July 2023.
Meanwhile, the New York State law would take effect on the 180th day after it’s passed.
Employment Law Compliance. Simplified.
New York State AI Employment Law Bill
To begin, the bill defines an automated employment decision tool as:
(A)ny 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 making employment decisions that impact natural persons.
Regarding monitoring employees, an electronic monitoring tool is defined as:
(A)ny system that facilitates the collection of data concerning worker activities or communications by any means other than direct observation, including the use of a computer, telephone, wire, radio, camera, electromagnetic, photoelectronic, or photo-optical system.
Taken together, the use of these tools would be restricted under the New York State AI employment law and employers would not be able to solely use technology to make certain employment decisions.
Regarding employment decisions, which include hiring, compensation, work schedules, promotions, etc., the law would bar the use of AI unless the organization subjected the tool to a bias audit within a year of using it.
An independent auditor would have to review the technology and employers would have to:
- Make the results available to the public
- Inform employees or prospective workers of its use
- Allow job candidates to ask for a different evaluation method
Regarding electronic monitoring of employees, the law would ban their usage except in certain instances. In addition to other requirements, the exceptions for using electronic monitoring tools include:
- Allowing a worker to accomplish an essential job function
- Monitoring production processes or quality
- Assessment of worker performance
- Ensuring compliance with employment, labor, or other relevant laws
- Protecting the health, safety, or security of workers
- Administering wages and benefits
- Other purposes as defined by the state department of labor
Also, such monitoring tool would have to be as non-invasive as possible and affect the fewest number of workers possible.
Again, employers that use electronic monitoring tools would be required to inform employees of their use, purpose and information collected, in addition to other requirements.
Lastly, employers found in violation of the law (if it is passed) would be subject to fines.
Employment Law Compliance Management
The introduction of a bill to limit the use of AI in employment law in New York State is indicative of the growth of new laws related to hiring.
While pay transparency laws, and related statutes, are among the most notable, there has been a growth in how lawmakers regulate employment activity in this area over the past several years, including ban-the-box legislation, protections for recreational marijuana use and more.
Meanwhile, with smaller jurisdictions passing more minimum wage ordinances and paid leave laws, there has never been more matters for large employers to monitor. (And, of course, many of these law require employers to display the associated labor law poster.)
With little broad employment law activity at the federal level, this situation will likely continue in the years to come.
Employers with locations in the Empire State should keep an eye out for the potential passage of the New York State AI employment law bill.
With a similar law having already gone into effect in New York City, it could be a harbinger of what may happen at the state level.