New York City’s AI Hiring Law Faces Pushback from Business Groups. New York City has implemented an groundbreaking new law, Local Law 144, which requires employers using artificial intelligence-powered hiring software to undergo assessments for potential racist or gender biases. Major business groups, however, are pushing back against the law, arguing that it places unnecessary burdens on companies and may lead to frivolous lawsuits. This article examines the implications of the law and the reactions from both sides.
New York City Introduces Law to Address Bias in AI Hiring Tools
New York City has become the first city to enact regulations targeting the use of automated employment decision tools (AEDTs) in the hiring process. Local Law 144, which went into effect this week, mandates that employers must have their AI hiring tools analyzed by independent auditors to assess potential bias against candidates. The law aims to ensure fair and unbiased hiring practices while addressing concerns surrounding emerging AI technologies.
The Requirements of Local Law 144
Under the new law, employers utilizing AI-powered hiring tools must conduct annual audits by independent auditors. These evaluations must include calculations of selection or scoring rates and an assessment of the impact ratio across race/ethnicity categories, and intersectional categories. To promote transparency, companies must publicly disclose the results of these audits.
Penalties for Non-Compliance
Any employer found in violation of Local Law 144 may face penalties. The first violation incurs a fine of up to $500, with subsequent violations potentially reaching up to $1,500. The Department of Consumer and Worker Protection (DCWP) is responsible for enforcing the law, and individuals can report potential violations through the department’s website or by calling 311. Discrimination claims related to AEDTs should be directed to the NYC Commission on Human Rights.
Business Groups Express Concerns
Several major business groups have voiced their opposition to Local Law 144, arguing that it imposes excessive regulation and hampers workforce innovation. The Job Creators Network’s president and CEO, Alfredo Ortiz, labeled the law as a burdensome regulation, cautioning that it may lead to frivolous lawsuits based on manufactured racism concerns. Ortiz urged the New York City Council to repeal the law, emphasizing that businesses do not support discrimination but object to excessive government interference.
Society for Human Resource Management’s Stance
The Society for Human Resource Management (SHRM), while acknowledging the need for guardrails in AI deployment, has expressed concerns about the potential overregulation resulting from Local Law 144. SHRM emphasized its commitment to promoting opportunity and equity in hiring processes but cautioned against compromising workforce innovation and optimization. The group called for a balanced approach that encourages innovation while ensuring fair and unbiased practices.
Balancing Innovation and Equity
The implementation of Local Law 144 reflects growing concerns over potential biases embedded within AI-powered hiring tools. While AI can enhance efficiency, experts warn that its utilization can lead to unintended discrimination. New York City’s pioneering regulation aims to strike a balance between promoting innovation and guaranteeing equitable employment practices.
Conclusion:
New York City’s AI Hiring Law Faces Pushback from Business Groups. New York City’s Local Law 144 represents a significant step in regulating AI-powered hiring tools. While intended to address potential biases and promote fairness, the law has faced opposition from business groups concerned about overregulation and the associated impact on innovation. The clash of perspectives highlights the challenges of leveraging emerging technologies while ensuring equity in employment practices. As AI reshapes the hiring landscape, finding a balance between innovation and fairness remains an ongoing task for lawmakers, employers, and society.
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