AI Hiring Tools and Bias: New York's Legislative Approach

A Novel Legislation in NYC: Unraveling the Aspects

Local Law 144 in New York City presents a significant shift in the regulation of AI-powered hiring tools. Under this law, before using an AI hiring tool, companies must have it assessed for potential racial or sexist biases by an independent auditor, with the results of this assessment being made publicly available.
In addition to this, companies using such tools for hiring decisions must inform NYC-based candidates about the use of these automated tools in the screening process.
A first-of-its-kind regulation, it is enforced by the city's Department of Consumer and Worker Protection (DCWP), which stipulates yearly audits of these AI tools.
Penalties for violating this law range from $500 for first-time offenders to $1,500 for recurrent breaches.

Automated Employment Decision Tools (AEDTs) have been utilized for years to streamline the hiring process. However, the evolution and widespread adoption of advanced AI tools have presented new challenges.
The key concern lies in these tools harbouring biases, thus potentially violating anti-discrimination laws. Generative AI tools such as OpenAI's ChatGPT, for example, have been flagged for possibly increasing the risk in the hiring process.
As a response, multiple federal agencies are examining the impact of these technologies on employment decisions and reinforcing efforts to ensure companies' compliance with federal laws.

Despite its apparent benefits, Local Law 144 has been criticized by major business entities who argue it imposes an undue burden on businesses and stymies innovation.
Critics, including the Job Creators Network and the Society for Human Resource Management (SHRM), argue that the law might lead to false accusations of discrimination and hinder technological advancement in hiring processes. They suggest that these audits might detect disparities that are not indicative of actual discriminatory practices.
SHRM emphasizes the importance of setting up "guardrails" for AI but is against overregulation that might stifle workforce innovation and optimization.

The implications of Local Law 144 extend beyond NYC as it pioneers the regulatory landscape surrounding AI and anti-discrimination laws.
While the law signifies an attempt to create a more equitable hiring process, the concerns raised by businesses hint at a larger debate about balancing technological advancement with ethical considerations.
As AI continues to permeate the workforce, and as cities and countries grapple with managing its impact, the direction set by NYC will be of keen interest to regulators, companies, and job seekers alike.

The debate surrounding AI hiring tools, their potential for bias, and the need for regulation, is ongoing. While NYC's Local Law 144 represents a significant stride in tackling AI-induced discrimination in hiring, the backlash from business groups signifies the complexities in achieving a fair balance between technological innovation and workforce equity.
The future trajectory of AI in the hiring process, therefore, rests on how well these two aspects are harmonized. The learnings from NYC's approach may serve as a pivotal reference point for shaping AI regulations worldwide.