New Jersey Bill Targets Artificial Intelligence Discrimination in Hiring

The use of artificial intelligence tools in the modern workplace has sparked all sorts of reactions, from people warning that AI will replace white collar workers to people urging workers to think of AI as a job aid they can use to become more productive. But one of the questions for lawmakers right now has to do with AI’s effect on human beings’ ability to get jobs in the first place.

Employers have been using AI to assist in making hiring decisions for several years now. These systems are called automated employment decision tools and are designed to help companies and recruiters sort through large volumes of applications quickly. But the systems have been drawing scrutiny from local, state and federal governments due to concerns about these AI-based systems making biased and discriminatory decisions.

For example, a New York City law that took effect on April 15, 2023 requires a company to notify job candidates that an AI tool is being used and to allow them to request an alternative selection process. It also requires the company to undergo a bias audit every year to see if a tool is having a disparate impact on candidates of certain races and ethnicities. Companies can be fined between $500 and $1,500 per violation. New York State’s legislature has introduced a bill modeled after the NYC law.

New Jersey lawmakers are also taking action to try to limit possible hiring discrimination by AI tools. The state Assembly has introduced A4909, a bill that would regulate the sale and use of automated employment decision tools. The bill would ban the sale of such tools unless these conditions are me:

• The tool has been bias-audited in the year prior to selling the tool or offering it for sale.
• The sale of the tool includes, at no additional cost, an annual bias-audit service that provides the results of the audit to the purchaser.
• The tool is sold or offered for sale with a notice stating that the tool is subject to the provisions of the statute.

The bill defines a bias audit as “an impartial evaluation … of an automated employment decision tool to assess its predicted compliance with provisions of the New Jersey Law Against Discrimination, and any other application law relating to discrimination in employment.”

The proposed New Jersey bill is similar the New York City law in that it requires companies to notify candidates that AI was used to screen applications. However, the New Jersey law does not seem to allow candidates to request an alternative screening process. Further, like the NYC law, the New Jersey law would subject companies to fines of between $500 and $1,500 per violation.

Deutsch Atkins & Kleinfeldt, P.C. is closely watching developments with the pending bill and all issues related to AI and employment law. If you have questions or concerns about discriminatory hiring practices, call us at 551-245-8894 or contact us online to arrange a consultation with our Hackensack lawyers.