Technology continues to evolve, and naturally employers seek to evolve with it or risk getting outpaced or outsmarted by competitors. One of the latest tools being utilized is automated employment decision tools and artificial intelligence (AI) in making employment decisions. However, employers must ensure that the use of AI does not violate federal, state and local employment discrimination laws. Recent guidance provided by the United States Equal Employment Opportunity Commission should be reviewed.
Going a step further for companies operating within New York City, on April 6, 2023, the New York City Department of Consumer and Worker Protection adopted new rules to implement legislation that “prohibits employers and employment agencies from using automated employment decision tools 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.” These rules seem to apply even if the employer uses AI to do basic initial tasks, such as reviewing resumes. This final adoption will take effect on July 5, 2023.
According to the EEOC’s guidance issued May 18, 2023, “[e]mployers increasingly utilize [AI] in an attempt to save time and effort, increase objectivity, optimize employee performance, or decrease bias.” However, employers need to be mindful that the use of AI may result in a disparate impact or adverse impact based on race, color, religion, sex, or national origin, or to individuals with disabilities.
The EEOC’s recent guidance advises employers of potential areas of liability under Title VII of the Civil Rights Act of 1964 when using AI. Similarly, on May 12, 2022, the EEOC issued guidance and advised employers of potential areas of liability under the Americans with Disabilities Act when using AI. The EEOC specifically advised that employers may be liable for use of AI even if the AI was designed and administered by another entity.
While AI is intended to assist decision-making, employers should be aware that there can be liability for using AI to review resumes, conducting pre-employment testing, and, in NYC, even failing to post the results. The EEOC provided a useful example in the context of pre-employment tests for those with disabilities:
Further, employers also have a responsibility to protect their applicants’ and employees’ privacy. Indeed, employers who use vendors for AI should consider the vendor’s data security history, use of collected data, and the measures they have in place to protect applicants’ dates of birth, addresses, medical documentation and any other confidential information.
Employers should take time now to review the EEOC’s Title VII and ADA guidance, and the DCWP’s new rules to understand potential areas of concern and potential liability in advance of using AI. Employers may also want to consult with competent employment counsel in their efforts to avoid running afoul of the employment discrimination laws while using AI.
Jennifer Sherven is a partner in the Woodbury, N.Y. office of Kaufman Dolowich LLC, representing management in all areas of employment litigation.
Amanda Slutsky is an Associate in the Woodbury, N.Y. office of Kaufman Dolowich LLP, and focuses her practice in the areas of labor and employment law.