Navigating New York’s AI Legislation: A Strategic Guide for Employers

Three New York State Legislature representatives reviewing bills at a conference table
Stay informed! New bills in New York State Legislature may soon require employers to conduct bias audits and enhance transparency in AI use.

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With two bills making their way through the New York State Legislature, employers may soon need to conduct detailed bias audits and uphold a new level of transparency when using AI. These legislative proposals not only extend the right to employees and applicants to sue for alleged bias but also broaden the scope to include the developers behind these AI tools.

For businesses, the message is clear: proactive measures in auditing AI applications for bias and ensuring transparent usage practices are no longer optional but essential strategies to mitigate legal risks and protect your company’s reputation.

New York’s Current Legislative Proposals

New York is setting the stage for significant changes with two key bills, S7623 and A9315, focusing on the use of AI in the workplace.

Mandatory Bias Audits

These proposals mandate annual bias audits for employers using AI for employment decisions, ensuring these technologies withstand anti-bias scrutiny.

Transparency Requirements

Businesses must inform applicants and employees when AI tools influence hiring or other employment outcomes. This encompasses a broad spectrum of AI applications, from resume screening to performance assessment tools, which are increasingly marketed to employers.

Expansion of Legal Recourse

The legislation aims to curb the use of AI for worker surveillance and monitoring, expanding legal recourse for individuals. Notably, it allows not just for actions against employers but also lawsuits against the creators and sellers of these AI tools.

Closing Loopholes

Addressing a critical gap in New York City’s landmark AI bias audit law, these state proposals intend to eliminate loopholes that permit employers to bypass regulations by maintaining human dominance in decision-making processes. Under the new laws, any AI involvement in assisting employment decisions would necessitate compliance, regardless of the extent of human input.

Competitive Legislative Race

This move positions New York in a competitive legislative race with California, each striving to pioneer AI regulation. Unlike a similar California bill that necessitates notification only when AI is a “controlling factor” in decisions, New York’s approach requires transparency whenever AI assists in the decision-making process, aiming to leapfrog California’s efforts by closing existing loopholes and setting a more comprehensive regulatory framework.

What Comes Next?

The New York State Legislature is currently navigating the annual budget process. Completion of this process in the upcoming weeks will clarify which bills lawmakers will prioritize. Should the AI legislation maintain its priority status post-budget discussions, it’s likely to be considered in committee come April. This timeline will provide a clearer picture regarding the potential for these bills to become law, undergo amendments, or face opposition before the June deadline.

Immediate Actions for Employers

While the potential enactment of these AI regulations might seem distant, with an effective date possibly in late 2024 or early 2025, immediate panic and policy overhauls are unnecessary. Yet, proactive steps are advisable to ensure readiness for any legislative advancements within the year:

Conduct an Internal Assessment

Identify if your operations employ AI tools that could fall under the proposed legislation. An exhaustive inventory now prepares you for future compliance requirements efficiently.

Engage with AI Vendors

Collaborate closely with your AI vendors to ascertain their measures against bias and unfair practices. Understanding their compliance efforts is crucial.

Review Vendor Contracts

Scrutinize your agreements to ensure accountability for legal missteps is correctly assigned. This step is vital for mitigating potential liabilities.

Launch a Transparency Initiative

Consider voluntarily enhancing transparency about AI use in decision-making with all stakeholders, including job applicants and employees. Initiating an open dialogue through guides or FAQs about AI applications, addressing concerns, and explaining information request procedures can foster trust and potentially benefit your organization.

Work With a Trusted HR & Small Business Consultant to Stay Compliant

As a seasoned HR consultant, my guidance centers on preparing small business owners, startup HR teams, and solopreneurs for the evolving landscape of employment law. Navigating New York’s forthcoming AI legislation requires strategic foresight and informed action. The outlined steps not only position your business for compliance but also demonstrate a commitment to fairness and transparency in AI utilization.

Contact me to get started!

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