A new law is set to take effect in New York City, which will regulate how companies can use artificial intelligence in hiring decisions. Enforcement of NYC 144 will begin on July 5th, 2023, requiring companies using AI software in the hiring process to notify candidates that such software is being used.

The rules will also require companies using AI systems in hiring to arrange an independent audit of the system on an annual basis to detect biases and to provide candidates with information on the data being collected and analyzed when requested. Companies found not to be compliant with the law will face a fine.

According to reporting by The New York Times, the law has attracted criticism from both labor and business interests. Center for Democracy & Technology president Alexandra Givens told the paper that the law’s definition of an “automated employment decision tool” used to “substantially assist or replace discretionary decision making” is too narrow. 

For Givens, the law will only require audits on software used as the sole or primary factor in the hiring process or is used to overrule a human, missing the common practice of AI software being used to reduce applicants to a narrow list which is then used by humans for final decisions.

Givens also noted to The Times that the law limited the groups measured for biased treatment at the hands of AI. Although the law covers biases on grounds of sex, race, and ethnicity, it does not address biases on age and disabilities.

Meanwhile, businesses comprising the Software Alliance, including Microsoft, have criticized the law as not being feasible due to how new the landscape of AI-assisted hiring is, including a lack of standards and oversight bodies.

News of the law comes months after New York City’s pay transparency law took effect.

This article is part of the Archinect In-Depth: Artificial Intelligence series.