Launch of the AI-based hiring tool law in New York City

 

In an effort to counteract biases built into HR software, a New York City law mandating businesses to review their automated employee recruiting or promotion tools finally took effect on Wednesday after multiple delays.

The Bias Audit Law, also known as New York City Local Law 144, mandates that hiring companies notify job candidates that algorithms are being used to automate the process and have a third party do an audit of the software to look for any bias.

According to some experts, the legislation restricting the use of artificial intelligence (AI) in recruiting may serve as a model for reforms across the nation.

Any automated hiring or employee evaluation algorithm, including machine learning, statistical modelling, data analytics, or artificial intelligence (AI), is covered by the Bias Audit Law. The algorithms are those used to determine a candidate's suitability or chance of success, or those that produce a classification of that individual.

Businesses that break the rules will be fined $375 for a first offence, $1,350 for a second offence, and $1,500 for a third offence or more. Every day that a tool for making automated hiring decisions is utilised in violation of the law will be counted as a single offence.

While the most comprehensive regulation controlling automated hiring tools has yet to take effect, other states, such as California, Illinois, Maryland, and Washington, have already passed legislation or are contemplating it. The EU AI Act was created by the European Union in order to solve problems with automated recruiting software. The EU AI Act's language was approved in June, and it is currently being included into a proposal that will be put to a vote to become legislation.

Automation is used in hiring since manually screening applicants might take weeks or even months. Even just setting up next-phase interviews might take days, not to mention any delays brought on by rescheduling. Additionally, a hiring manager might not have enough time to prepare thoroughly for an interview. Using experience, abilities, and other variables, hiring algorithms can swiftly narrow the pool of candidates to create a smaller, more manageable, and (theoretically) more qualified list of candidates. Due to the quantity of expertise and skill sets needed for their jobs, knowledge workers in particular can be challenging to sort through.

According to Cliff Jurkiewicz, vice president of global strategy at Phenom, a supplier of AI-enabled employment platforms, the standards outlined in New York Local Law 144 may readily extend to enterprise resource planning (ERP) software and workforce planning in general.

For instance, workforce management features in ERP solutions can influence hiring and training practises as well as the abilities and skills that are required. "AI will influence all of those things. The reality is that the extensibility of that law will be much deeper than it is now due to the reach of AI, which I anticipate will happen. Work is more than just employing and attracting people.

New York's new law is probably not going to be an issue for businesses and organisations that already incorporate civil rights regulations into their corporate culture and operational procedures. It might be hard for those who haven't.

"For instance, we and other businesses in our industry were already in compliance with Local Law 144 two years ago. For this, our domain is really well prepared, added Jurkiewicz. But most likely not, if you have a look at some of the other domains.