Employers have begun relying on various artificial intelligence (AI) tools to streamline the hiring process and other aspects of the employment relationship. While the marketing for these tools sometimes claims that they can perform certain tasks better than humans, experience demonstrates that they are not free of many human biases. Humans programmed the AIs, after all, and may have included their own biases in the code. Two pending bills would amend New Jersey employment law to regulate the use of these tools in the hiring process. One would require “bias audits” of AI-based analytical tools. The other bill deals specifically with AI tools that analyze video interviews of job applicants.
The Use of AI in Hiring
The term “artificial intelligence” can refer to several types of software applications. Generative AI, for example, can create written or visual works based on user prompts. Employers use analytical AI tools to go through large amounts of data and make recommendations or decisions. For example, an AI system could screen job applicants based on whatever factors employers choose. This is the source of much of the concern about AI in employment decisions. Employers are ultimately liable for bias in an AI tool’s algorithm.
Automated Employment Decision Tools
A3854, introduced in the New Jersey Assembly on February 22, 2024, would regulate companies that produce and sell “automated employment decision tools” (AEDTs), as well as the employers that use them. The bill defines an AEDT as a system that uses statistical theory or a learning algorithm to filter job applicants or employees in a way that “establishes a preferred candidate or candidates.” Any AI system that screens job applicants would fit this definition.
No one may sell or offer to sell an AEDT in New Jersey unless they conduct an annual “bias audit.” This is an impartial test to assess whether the AEDT complies with the New Jersey Law Against Discrimination and other antidiscrimination laws. Anyone who sells AEDTs in this state must provide copies of the annual bias audit results to purchasers at no additional charge. They must also notify potential purchasers that the AEDT is subject to the bias audit requirement.
Employers who use an AEDT to screen candidates for employment decisions must publish the most recent bias audit results on the company website. They must inform candidates that they used an AEDT and disclose what characteristics the AEDT considered.
AI-Enabled Video Interviews
A3911, introduced on February 27, would apply to employers that use AI to analyze and screen applicant-submitted video interviews. Before requesting a video submission, an employer must:
– Inform the applicant that the employer will use an AI tool to analyze the video;
– Disclose what characteristics the AI tool uses to screen applicants; and
– Obtain the applicant’s written consent to use the AI tool.
Employers must collect demographic data about the applicants that the AI tool evaluates. They must report this data to the New Jersey Department of Labor and Workforce Development, which will perform an annual audit to determine “whether the data discloses a racial bias in the use of artificial intelligence.”
Penalties for Violations
Neither bill gives employees or job applicants the right to file a lawsuit for violations. Employers face civil fines of $500 to $1,500, payable to the state.
The Resnick Law Group’s team of knowledgeable and experienced employment attorneys advocates for workers and job applicants in New Jersey and New York. Please contact us online, at 973-781-1204, or at 646-867-7997 today to schedule a confidential consultation to discuss your rights and options with a member of our team.