April 18, 2024

Seyfarth Synopsis: Four days before enforcement of New York City Local Law 144 (“Local Law 144”) is set to begin, the Department of Consumer and Worker Protection (“DCWP”) published FAQ guidance governing the use of Automated Employment Decision Tools (AEDTs). The release of the FAQs follows a series of roundtables DCWP has held with various stakeholders. As expected, DCWP is moving forward with the July 5, 2023 enforcement deadline.

Late this afternoon, DCWP released its highly anticipated FAQs regarding the requirements of Local Law 144 in an attempt to clarify the law’s requirements. The FAQs which can be accessed here are broken out into seven sections covering questions on the following topics: (1) an overview of the law, (2) general bias audit requirements, (3) data requirements, (4) independent auditors, ( 5) responsibility for bias audits, (6) notice requirements, and (7) complaints.

While the guidance provided during the May 22 educational roundtable that Seyfarth previously reported on is reflected in the FAQs, there are additional developments that are discussed in more detail below.

Disparate Impact in Audit Bias

The FAQs explain that while Local Law 144 requires employers and employment agencies to conduct a bias audit, it does not require any specific actions based on the results of a bias audit. However, the guidance goes on to note that Federal, state, and New York City laws prohibit discrimination and that employers and employment agencies must comply with all relevant anti-discrimination laws.

Limiting the Use of Historical Data

The FAQs provide additional clarity regarding the use of historical data and discuss whether employers and employment agencies can limit the historical data used for a bias audit to a specific time period. They go onto explaining that while the law has no specific requirements regarding the historical data used for a bias audit, the summary of the results of a bias audit must include the source and explanation of the data used. Specifically, “[i]f the historical data was limited in any way, including to a specific region or time period, the audit should explain why.”

Determining if Historical Data is Insufficient

DCWP has not set a specific requirement for statistical significance. The FAQs explain that if an independent auditor determines there is insufficient historical data to conduct a statistically significant bias audit, test data may be used to conduct a bias audit. As previously established, the summary of results of the audit bias must explain why test data was used and include the source and description of the data.

Complaint Process

DCWP also provides a section on how it will handle discrimination of complaints involving the use of an AEDT. The FAQs explain that while DCWP enforces Local Law 144’s prohibition on (1) AEDT use without a bias audit and (2) required notices, claims of discrimination involving an AEDT will be handled by the NYC Commission on Human Rights which enforces the NYC Human Rights law. While DCWP will accept complaints, the Department will refer any claims of discrimination to the Commission on Human Rights.

Workplace Solutions

We encourage you to contact the authors of this article or a member of Seyfarth’s People Analytics team as soon as possible if your organization seeks assistance in complying with Local Law 144.

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