On April 6, 2023, the New York City Department of Consumer and Worker Protection (“Department”) issued its Final Rules regarding automated employment decision tools (“AEDT”). As previously reported, New York City’s AEDT law, Local Law 144 of 2021, prohibits employers and employment agencies from using AEDT unless:

  • The tool has been subjected to a bias audit within a year of the tool being used or implemented;
  • Information about the bias audit is made publicly available; and,
  • Certain written notices have been provided to employees or job candidates.

            Following the multiple public hearings and comments on the Department’s proposed rules from September and December of 2022, the newly issued Final Rules now govern the Department’s interpretation, and enforcement, of the AEDT law. Changes from the December 2022 proposed rules that are now present in the Final Rules include:

  • Expansions to the scope of the AEDT law’s definition of “machine learning, statistical modeling, data analytics, or artificial intelligence;
  • Adding the requirement that the bias audit indicate the number of individuals assessed by the AEDT that were not included in the audit’s calculations because they fall within an “unknown category” (and that the number be listed in the bias audit results summary);
  •  Permitting independent audits to exclude a category that comprises less than 2% of the data being used for the bias audit’s impact ratio calculations;
  • Examples of a bias audit;
  • Guidance on when an employer or employment agency may rely on a bias audit conducted using historical data or test data, including data from other employers or employment agencies; and,
  • Additional language regarding the need to include, if applicable, the number of applicants in a category and the scoring rate of a category within the bias audit summary results.

            Now that the Final Rules have been issued, employers and employment agencies have the regulatory roadmap necessary to begin complying with the AEDT law when enforcement begins on July 5, 2023.

             Our Data Analytics and Privacy, Data, and Cybersecurity practices will continue to monitor regulatory and enforcement updates and are actively assisting employers and employment agencies with their compliance of the AEDT law and its Final Rules. If you and your organization have any questions or would like assistance with navigating the AEDT law or these Final Rules, please contact any member of our Data Analytics or Privacy, Data, and Cybersecurity practice groups.

Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Eric J. Felsberg Eric J. Felsberg

Eric J. Felsberg is a Principal in the Long Island, New York, office of Jackson Lewis P.C. and the National Director of JL Data Analytics Group.

As the National Director of JL Data Analytics Group, Mr. Felsberg leads a team of multi-disciplinary lawyers…

Eric J. Felsberg is a Principal in the Long Island, New York, office of Jackson Lewis P.C. and the National Director of JL Data Analytics Group.

As the National Director of JL Data Analytics Group, Mr. Felsberg leads a team of multi-disciplinary lawyers, statisticians, data scientists, and analysts with decades of experience managing the interplay of data analytics and the law. Under Mr. Felsberg’s leadership, the Data Analytics Group applies proprietary algorithms and state-of-the-art modeling techniques to help employers evaluate risk and drive legal strategy. In addition to other services, the team offers talent analytics for recruitment, workforce management and equity and policy assessments through predictive modeling, partners with employers in the design of data-driven solutions that comply with applicable workplace law, manages and synthesizes large data sets from myriad sources into analyzable formats, provides compliance assessment and litigation support services including damage calculations, risk assessments, and selection decision analyses, and offers strategic labor relations assistance including determination of long term costs of collective bargaining agreements, review of compliance with collectively bargained compensation plans and assessment of the efficacy of training programs. The JL Data Analytics Group designs its service delivery models to maximize the protections afforded by the attorney-client and other privileges.

Mr. Felsberg also provides training and daily counsel to employers in various industries on day-to-day employment issues and the range of federal, state, and local affirmative action compliance obligations. Mr. Felsberg works closely with employers to prepare affirmative action plans for submission to the Office of Federal Contract Compliance Programs (OFCCP) during which he analyzes and investigates personnel selection and compensation systems. Mr. Felsberg has successfully represented employers during OFCCP compliance reviews, OFCCP individual complaint investigations, and in matters involving OFCCP claims of class-based discrimination. He regularly evaluates and counsels employers regarding compensation systems both proactively as well as in response to complaints and enforcement actions.

Mr. Felsberg is an accomplished and recognized speaker on issues of workplace analytics and affirmative action compliance.

While at Hofstra University School of Law, Mr. Felsberg served as the Editor-in-Chief of the Hofstra Labor & Employment Law Journal.