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NYC Law FAQ

Henrique Bittencourt
Updated

What’s the NYC hiring law?

Local Law 144 of 2021 regarding automated employment decision tools (AEDTs) is an amendment to the New York City (NYC) code. Employers making employment decisions with the assistance of an AEDT regarding residents of NYC must first meet several requirements before using the AEDT. The amendment requires that a third party, independent auditor conduct a bias audit on AEDTs within a year prior to the tool’s use. An employer using an AEDT must also notify NYC resident candidates, both internal and external, (1) that an AEDT will be used, (2) what job requirements and candidate characteristics the tool will evaluate, and (3) what data is collected, where the data comes from, and the data retention policy of the organization. Should an employer fail to comply, NYC can assess a civil penalty for each violation. The law will go into effect on January 1st, 2023.

What is an AEDT? According to the law, an AEDT refers to a tool that either makes or substantially aids in the employment decision-making process for an organization. An AEDT is a tool that uses any “computational process,” including data analytics, statistical modeling, machine learning, or artificial intelligence, to produce a recommendation about a candidate (which includes a literal recommendation, e.g., “Hire/Don’t hire”; a score, e.g., “90%”; or a classification, e.g., “Red/Yellow/Green”). 

What is a bias audit? According to the law, a bias audit is an audit conducted by an independent auditor who conducts an impartial evaluation of the AEDT for disparate impact on a NYC resident based on their race or sex (component 1 categories per Title VII). 

 

Who does the law apply to?

This law is applicable to employers hiring or promoting candidates, who reside in NYC, with the assistance of most kinds of assessments. For HireVue customers, this means it would apply to you if you are filling a position using HireVue’s interview- or game-based assessment technology, hiring decisions are being made or substantially supported by the results of the assessment, and at least one of your candidates resides in NYC. This law would not apply to customers only using Video Interviewing or HireVue Builder products.

 

What are the critical elements of the law?

The NYC law requires several things of employers above and beyond the equal opportunity regulations they may be familiar with (i.e., compliance with federal laws including Title VII and the ADA). 

Prior to using an AEDT, an organization must:

  • Arrange for an independent auditor to conduct a bias audit for the AEDT 
  • Post a summary of the results to the organization’s website and the date when the AEDT was implemented

When an AEDT is in use, an organization must also:

  • Notify candidates that an AEDT will be used no less than 10 days prior to when the AEDT will be used 
  • Provide the job qualifications and characteristics the AEDT will evaluate to make its recommendation in the same 10 day window
  • Allow candidates to request an alternative selection process or accommodation
  • Disclose the type of data, the source of the data, and the organization’s data retention policy on the organization’s website or, if not made public, disclose this information within 30 days to any candidate who submits a written request

AEDTs cannot be used until the results of the audit are posted, and bias audits cannot be more than one year out of date from the tool’s use. Hence, bias audits must be conducted annually as long as the AEDT remains in use.

 

How can HireVue assist its customers hiring in NYC?

HireVue can assist customer preparations in the following ways:

  • Conduct an adverse impact review before 2023
  • All HireVue assessment customers already receive a yearly adverse impact review as part of their scope of work. This review includes, but is not limited to, an examination of disparate impact on the basis of race/ethnicity and sex as measured by joint evidence collected from practical (e.g., adverse impact “4/5ths” ratios) and statistical (e.g., the two standard deviations z-test) significance per the Uniform Guidelines. Although the law may be further clarified to rule out vendor-supplied bias audits, conducting an adverse impact review now at a minimum will (1) identify whether any adjustments need to be made to an assessment and (2) collect all necessary information for a third party independent auditor to conduct their own bias audit.
  • Customer action: Organize candidate self-reported demographic data associated with any job listings that use an assessment.
  • Provide the job qualifications and characteristics that HireVue’s assessments measure
  • HireVue’s IO Psychology Consultants conduct job analyses prior to implementing assessments with their customers. The job analysis is a process in which evidence is gathered to recommend job-related assessment content. The job analysis report includes not only what the assessment measures but also how that content is related to the job. Your IO Psychology Consultant can help you determine what information to provide as part of your notice to candidates.
  • Customer action: Include the assessment content and high-level job analysis results on the job postings/job descriptions for the roles that use the assessment.
  • Provide the type of data and source of data used by the assessments
  • All data that HireVue’s assessments use are sourced directly from the candidate taking the assessment; no data is passively gathered or collected from other sources. The type of data HireVue’s assessments use varies by assessment modality. Interview-based assessments use the text transcription of the words candidates say in response to interview questions in order to rate candidates. Game-based assessments use the choices made by candidates (e.g., the right or wrong choice made by a candidate in a cognitive ability test or the picture-based preference indicated by a candidate in a personality test) to rate them on the domain of interest. Your IO Psychology Consultant can help you determine the exact type of data used from the candidate.
  • Customer action: Post the data sources and data types used in your particular assessment to your website. Post your specific data retention policy to the same place.
  • Provide information on the audits conducted on HireVue’s tools and methods
  • In addition to working with each customer on an annual basis to conduct adverse impact reviews on each customer’s specific assessment use case, HireVue has also invited several audits of its assessment technologies and methodology and released an industry-first artificial intelligence explainability statement detailing how HireVue’s assessments work. Although it is not clear whether a bias audit should extend to the general practices of an AEDT vendor, HireVue leads the industry in inviting scrutiny into its technologies and practices in order to assure its customers that HireVue follows best practices and develops its assessments with fairness, transparency, and explainability in mind. The results of this work are already publicly available. 
  • Customer action: Include links to HireVue’s audit results and explainability statement alongside the other postings required by the law.

Furthermore, HireVue also recommends that customers:

  • Create a webpage to post the information required by the law
  • A summary of the bias audit findings conducted by an independent auditor
  • Should a vendor-supplied audit be sufficient to meet the new law, your IO Psychology Consultant will advise on what information to disclose on your website.
  • The date the assessment went live
  • The data sources and types used by the assessment and you data retention policy
  • Update job postings that use an AEDT to notify candidates of the information required by law
    • Notice that an AEDT will be used
    • Notice of the job qualifications and characteristics the AEDT will evaluate to make its recommendation
    • Notice that candidates have ten days to decide whether to continue in the AEDT process or request an alternative selection process/accommodation
  • Develop an accommodations/alternative selection process if needed
  • During the implementation process, your Professional Services Consultant would have worked with you to develop a process for candidates who requested accommodations or did not consent to taking the assessment. The accommodations required by this law can follow the process already outlined during implementation. If you have any questions, your Customer Success Director can help.

Despite the lingering questions about the NYC law, following the above actions should position employers well to comply with the intent of the law.