What Implications could NYC's new law on Audits have for the HR industry?
New York's Local Law 144 of 2021 (per the NYC Gov Website) regarding automated employment decision tools (“AEDT”) prohibits employers and employment agencies from using an automated employment decision tool unless the tool has been subject to a bias audit within one year of the use of the tool, information about the bias audit is publicly available, and certain notices have been provided to employees or job candidates. This law's phrasing includes a multitude of tools that could be classified as an Automated Employment Decision Tool. The applications could be a heuristic as simple as filtering candidates with and without a cover letter in their submission to complex systems that attempt to grade and filter applicant resumes. This has a huge implcation in the spaces of machine learning and AI as resume readers and applicant filtering was one of many methods to deal with increasing the efficiency of the slow process of being hired.
Since the law has only been recently enforced, the ways in which both employers and applicants have felt its effects are unclear. With a noted yearly requirement to obtain a bias audit, both firms that audit as well as firms that are in need of audits for their systems are scrambling in many ways to create ways to improve the auditability of their systems as well as their bias audit frameworks respectively.