New York City Regulates Hiring with AI

New York City Regulates Hiring with AI

New law impacts hiring with AI in New York City, with global implications

Artificial intelligence is booming, and no industry is spared. And in case you’re wondering what the technology has to say on the subject, ChatGPT would tell you, “AI has already become an integral part of everyday life.” Hiring with AI is no exception.

But any burgeoning technology that touches nearly every aspect of our lives should elicit a healthy level of skepticism. And in an industry like human resources, wherein “humans” typically dictate the professional future of other humans, the need for such skepticism might be elevated. 

Governments around the world are stepping up to enact laws that will keep a close eye on this technology, the most recent of which will affect recruiters and talent acquisition (TA) professionals in the city that never sleeps (but who might be able to finally get some shut-eye with the arrival of AI).

As of July 1, hiring teams in New York City are now subjected to new regulations governing the use of AI in hiring, also defined by the Department of Consumer and Worker Protection as “automated employment decision tools”, or AEDTs. The purpose of this new measure is to ensure companies act with fairness and equal consideration when hiring with AI, a technology that has sparked concern over its questionable objectivity. 

Under the law, organizations must inform job applicants that they are using AI as part of their decision-making process. They also must undergo annual audits conducted by independent parties to make sure the software is devoid of potential bias. If any violations are found, companies will be fined. What’s more, companies will have to publish the results of these audits.

From the applicant side, job seekers can request their potential employer to reveal whether their information is being collected and analyzed by AI and what that information is.

This is the first U.S. example of such a law and it’s a transformative moment in the rapidly evolving era of AI. This action is likely to serve as a guide for other local entities to ensure equity in hiring around the world.

The law was officially passed back in 2021 by the City Council and has since garnered both support and criticism. As it stands, the current regulation only inspects for bias by gender, race, and ethnicity. It does not consider discrimination based on other factors like age or disability. But in its infancy, such laws are likely to become more refined as time passes and more use cases emerge. 

Other laws that govern hiring with AI

While this is the first such regulation in the United States, it’s not the first in the world. The European Union already has passed its own version of an AI act that not only governs the use of the technology in recruitment but also in other sectors like transportation and education. A hearty 108 pages, the policy passed in 2021 and requires companies that use AI to inform regulators how the technology is being used and how it will affect the end user.

As New York starts clamping down on hiring with AI, the federal government is working out its own plans to abate the proliferation of the technology in irresponsible ways. The District of Columbia and states like California, New Jersey, and Vermont are devising their own strategies to regulate hiring with AI. Likewise, Illinois and Maryland have enacted legislation that limits certain AI technologies for activities like workplace surveillance and job candidate screening.

Fountain’s commitment to fair hiring

With a clear understanding of the advantages and disadvantages of hiring with AI’s help, we at Fountain have thoroughly examined our own features, like Fountain AI, to ensure we’re adhering to ethical standards that allow equal opportunity for all job seekers. 

“Fountain recognizes the benefits and potential risks of using AI, particularly in hiring,” says Sahil Chadha, Director of Security, Compliance, and IT at Fountain. “We are dedicated to using AI in a responsible and ethical manner. At present, we do not employ AI for selection or automated decision-making in our products. Instead, we use AI to guarantee that applicants have a seamless experience using our AI products.”

To make sure Fountain AI is performing optimally for customers, Chadha notes that frequent inspections are in place: “We regularly evaluate and supervise our use of AI to ensure that we are fulfilling our commitments to our customers. All workflows and configurations are either set up by customers or by our implementation team upon customers’ requests.” 

The future of hiring with AI

The future of hiring is here. And despite the omnipresent concerns surrounding ethics and fairness in the face of AI, recruiters can rest assured that discussions about regulation and bias-free hiring processes are in the works and are likely to expand and mature on the heels of the New York City law. 

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