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Artificial intelligence (AI) is changing the way businesses recruit and hire employees. Many New York City employers now use AI-driven tools to screen resumes, conduct interviews, and assess candidates. While AI can streamline hiring, it also raises serious legal concerns about bias, discrimination, and transparency.
New York City has enacted laws restricting the use of automated employment decision tools (AEDTs). This blog explains what employees and job applicants need to know when AI is involved in hiring decisions.
How Employers Use AI in Hiring
AI-powered hiring tools analyze job applications and evaluate candidates based on factors such as:
- Resume screening – AI scans resumes for keywords and qualifications, automatically ranking applicants.
- Video interviews – Some employers use AI to assess facial expressions, tone of voice, and word choice.
- Skill assessments – AI tests job-related skills and predict job performance.
- Hiring predictions – Algorithms evaluate past hiring data to recommend candidates.
While AI can increase efficiency, it is not always neutral. Algorithms may reinforce biases or unfairly exclude qualified candidates based on factors that have nothing to do with job performance.
NYC Law Regulating AI in Hiring
New York City enacted Local Law 144 to address bias and discrimination in AI-driven hiring practices. As of July 5, 2023, employers using Automated Employment Decision Tools (AEDTs) must comply with strict regulations, including:
- Bias audits – Employers must conduct an independent audit of AEDTs to assess whether they produce biased outcomes.
- Public disclosure – Employers must publish audit results and inform candidates when AI is used in hiring.
- Candidate notification – Applicants must be notified at least 10 business days in advance if AI will be used in their evaluation.
- Opt-out option – Candidates can request an alternative assessment method instead of AI screening.
Employers who fail to comply with Local Law 144 face fines and legal challenges from affected job seekers.
Legal Risks of AI in Hiring
While AI is designed to improve hiring efficiency, it raises significant legal issues, including:
- Discriminatory hiring outcomes – AI may favor certain demographics, leading to violations of anti-discrimination laws.
- Lack of transparency – Job applicants may not know how hiring decisions are made or what data AI considers.
- Privacy concerns – AI tools may collect and analyze personal data without proper safeguards.
- Retaliation risks – Employers may discriminate against applicants who question AI-driven hiring methods.
Employee and Job Applicant Rights Under NYC Law
Job seekers in NYC have legal protections against unfair AI-driven hiring practices. These include:
- Right to notification – Employers must disclose when AI is used in hiring decisions.
- Right to non-discriminatory hiring – AI tools cannot be used in ways that disproportionately disadvantage certain groups.
- Right to alternative assessments – Candidates can opt out of AI evaluations and request a different screening method.
- Right to legal action – If AI-based hiring violates employment laws, job seekers can file complaints or lawsuits.
Employers using AI in hiring must ensure compliance with Local Law 144 and federal employment laws, such as the Civil Rights Act and the Americans with Disabilities Act (ADA).
Concerned About AI in Hiring? Contact Lipsky Lowe LLP Today
AI-driven hiring should not violate your rights or limit job opportunities. If you believe an employer’s AI-based hiring practices have resulted in discrimination or unfair treatment, contact Lipsky Lowe LLP today for a consultation.