Bill Text: NJ S2964 | 2024-2025 | Regular Session | Introduced
Bill Title: Creates standards for independent bias auditing of automated employment decision tools.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-03-18 - Introduced in the Senate, Referred to Senate Labor Committee [S2964 Detail]
Download: New_Jersey-2024-S2964-Introduced.html
Sponsored by:
Senator ANDREW ZWICKER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Creates standards for independent bias auditing of automated employment decision tools.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning automated employment decision tools and supplementing Title 34 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Automated employment decision tool" or "AEDT" means any system the function of which is governed by statistical theory, or systems the parameters of which are defined by systems, including inferential methodologies, linear regression, neural networks, decision trees, random forests, and other learning algorithms, which automatically filter candidates or prospective candidates for hire or for any term, condition, or privilege of employment in a way that establishes a preferred candidate or candidates.
"Bias audit" means an impartial evaluation, including but not limited to testing, of an automated employment decision tool to assess its predicted compliance with the provisions of the "Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.), and any other applicable law relating to discrimination in employment.
"Candidate for employment" means a person who has applied for a specific employment position by submitting the necessary information or items in the format required by the employer or employment agency.
"Category" means any component 1 category required to be reported by employers pursuant to subsection (c) of 42 U.S.C. s.2000e-8 as specified in 29 C.F.R. s.1602.7, as designated on the Equal Employment Opportunity Commission Employer Information Report EEO-1.
"Distribution date" means the date the employer or employment agency began using a specific AEDT.
"Employment decision" means to screen a candidate for employment or otherwise to help decide compensation or any other terms, conditions, or privileges of employment.
"Employment agency" means the same as that term is defined in section 1 of P.L.1989, c.331 (C.34:8-43).
"Employer" includes any individual, partnership, association, corporation, and the State and any county, municipality, or school district in the State, or any agency, authority, department, bureau, or instrumentality thereof, employing any person.
"Historical data" means data collected during an employer or employment agency's use of an AEDT to assess candidates for employment or employees for promotion.
"Independent auditor" means a person or group that is capable of exercising objective and impartial judgment on all issues within the scope of a bias audit of an AEDT. An auditor shall not be considered independent if the auditor:
a. Is or was involved in using, developing, or distributing the AEDT;
b. At any point during the bias audit, has an employment relationship with an employer or employment agency that seeks to use or continue to use the AEDT or with a vendor that developed or distributes the AEDT; or
c. At any point during the bias audit, has a direct financial interest or a material indirect financial interest in an employer or employment agency that seeks to use or continue to use the AEDT or in a vendor that developed or distributed the AEDT.
"Impact ratio" means either the selection rate for a category divided by the selection rate of the most selected category; or the scoring rate for a category divided by the scoring rate for the highest scoring category.
"Machine learning, statistical modeling, data analytics, or artificial intelligence" means a group of mathematical, computer-based techniques:
a. That generate a prediction, meaning an expected outcome for an observation, such as an assessment of a candidate's fit or likelihood of success, or that generate a classification, meaning an assignment of an observation to a group, such as categorizations based on skill sets or aptitude; and
b. For which a computer at least in part identifies the inputs, the relative importance placed on those inputs, and, if applicable, other parameters for the models in order to improve the accuracy of the prediction or classification.
"Scoring Rate" means the rate at which individuals in a category receive a score above the sample's median score, where the score has been calculated by an AEDT.
"Screen" means to make a determination about whether a candidate for employment or employee being considered for promotion should be selected or advanced in the hiring or promotion process.
"Selection rate" means the rate at which individuals in a category are either selected to move forward in the hiring process or assigned a classification by an AEDT. This rate may be calculated by dividing the number of individuals in the category moving forward or assigned a classification by the total number of individuals in the category who applied for a position or were considered for promotion.
"Simplified output" means a prediction or classification as specified in the definition for "machine learning, statistical modelling, data analytics, or artificial intelligence." A simplified output may take the form of a:
a. Score , such as rating a candidate's estimated technical skills;
b. Tag or categorization, such as categorizing a candidate's resume based on key words, assigning a skill or trait to a candidate;
c. Recommendation, such as whether a candidate should be given an interview; or
d. Ranking, such as arranging a list of candidates based on how well their cover letters match the job description.
"Simplified output" does not refer to the output from analytical tools that translate or transcribe existing text, such as converting a resume from a PDF or transcribing a video or audio interview.
"Test data" means data used to conduct a bias audit that is not historical data.
2. a. An employer or employment agency may not use or continue to use an AEDT if more than one year has passed since the most recent bias audit of the AEDT.
b. Where an AEDT selects candidates for employment or employees being considered for promotion to move forward in the hiring process or classifies them into groups, a bias audit shall, at a minimum:
(1) calculate the selection rate for each category;
(2) calculate the impact ratio for each category;
(3) ensure that the calculations required in paragraphs (1) and (2) of this subsection separately calculate the impact of the AEDT on:
(a) sex categories, such as the impact ratio for selection of male candidates vs female candidates;
(b) race and ethnicity categories, such as the impact ratio for selection of Hispanic or Latino candidates versus Black or African American Non-Hispanic or Non-Latino candidates; and
(c) intersectional categories of sex, ethnicity, and race, such as the impact ratio for selection of Hispanic or Latino male candidates versus Non-Hispanic or Non-Latino Black or African American female candidates;
(4) ensure that the calculations in paragraphs (1), (2), and (3) of this subdivision are performed for each group, if an AEDT classifies candidates for employment or employees being considered for promotion into specified groups, such as leadership styles; and
(5) indicate the number of individuals the AEDT assessed that are not included in the required calculations because they fall within an unknown category.
c. Where an AEDT scores candidates for employment or employees being considered for promotion, a bias audit shall, at a minimum:
(1) calculate the median score for the full sample of applicants;
(2) calculate the scoring rate for individuals in each category;
(3) calculate the impact ratio for each category;
(4) ensure that the calculations required in paragraphs (1), (2), and (3) of this subsection separately calculate the impact of the AEDT on:
(a) sex categories, meaning the impact ratio for selection of male candidates vs female candidates;
(b) race or ethnicity categories, meaning the impact ratio for selection of Hispanic or Latino candidates versus Black or African American Non-Hispanic or Non-Latino candidates; and
(c) intersectional categories of sex, ethnicity, and race, such as the impact ratio for selection of Hispanic or Latino male candidates versus Non-Hispanic or Non-Latino Black or African American female candidates); and
(5) indicate the number of individuals the AEDT assessed that are not included in the required calculations because they fall within an unknown category.
d. Notwithstanding the requirements of paragraphs (2) and (3) of subsection b. and paragraphs (3) and (4) of subsection c., an independent auditor may exclude a category that represents less than two percent of the data being used for the bias audit from the required calculations for impact ratio. Where such a category is excluded, the summary of results shall include the independent auditor's justification for the exclusion, as well as the number of applicants and scoring rate or selection rate for the excluded category.
3. a. Historical Data. A bias audit conducted pursuant to section 2 of this act shall use historical data of the AEDT. The historical data used to conduct a bias audit may be from one or more employers or employment agencies that use the AEDT. However, an individual employer or employment agency may rely on a bias audit of an AEDT that uses the historical data of other employers or employment agencies only in the following circumstances:
(1) if that employer or employment agency provided historical data from its own use of the AEDT to the independent auditor conducting the bias audit; or
(2) if that employer or employment agency has never used the AEDT.
b. Test Data. Notwithstanding the requirements of subsection a. of this section, an employer or employment agency may rely on a bias audit that uses test data if insufficient historical data is available to conduct a statistically significant bias audit. If a bias audit uses test data, the summary of results of the bias audit shall explain why historical data was not used and describe how the test data used was generated and obtained.
4. a. Before the use of an AEDT, an employer or employment agency in the State shall make the following publicly available on the employment section of its website in a clear and conspicuous manner:
(1) the date of the most recent bias audit of the AEDT and a summary of the results, which shall include the source and explanation of the data used to conduct the bias audit, the number of individuals the AEDT assessed that fall within an unknown category, and the number of applicants or candidates, the selection or scoring rates, as applicable, and the impact ratios for all categories; and
(2) the distribution date of the AEDT.
b. The requirements of subsection a. of this section may be met with an active hyperlink to a website containing the required summary of results and distribution date, provided that the link is clearly identified as a link to results of the bias audit.
c. An employer or employment agency shall keep the summary of results and distribution date posted for at least six months after its latest use of the AEDT for an employment decision.
5. a. An employer that uses an AEDT for an employment decision shall provide notice to the candidates or applicants of the use of an AEDT that includes instructions for how a person may request an alternative selection process or a reasonable accommodation under other laws, if applicable. Nothing in this act requires an employer or employment agency to provide an alternative selection process.
b. To comply with subsection a. of this section, an employer or employment agency in the State may provide notice to a candidate for employment by doing any of the following:
(1) provide notice on the employment section of its website in a clear and conspicuous manner at least 10 business days before use of an AEDT;
(2) provide notice in a job posting at least 10 business days before use of an AEDT; or,
(3) provide notice to candidates for employment via U.S. mail or e-mail at least 10 business days before use of an AEDT.
c. To comply with the provisions of this act, an employer or employment agency may provide notice to an employee being considered for promotion who resides in the State by doing any of the following:
(1) provide notice in a written policy or procedure that is provided to employees at least 10 business days before use of an AEDT;
(2) provide notice in a job posting at least 10 business days before use of an AEDT; or,
(3) provide notice via U.S. mail or e-mail at least 10 business days before use of an AEDT.
d. To comply with the provisions of this act, an employer or employment agency shall:
(1) provide information on the employment section of its website in a clear and conspicuous manner about its AEDT data retention policy, the type of data collected for the AEDT, and the source of the data;
(2) post instructions on the employment section of its website in a clear and conspicuous manner for how to make a written request for such information, and if a written request is received, provide such information within 30 days; and
(3) provide an explanation to a candidate for employment or employee being considered for promotion why disclosure of the information would violate local, State, or federal law, or interfere with a law enforcement investigation.
6. This act shall take effect on the first day of the seventh month next following the date of enactment, except that the commissioner may take any anticipatory administrative action in advance as shall be necessary for the implementation of this act.
STATEMENT
This bill provides standards for the use of an independent bias audit if an employer elects to use an automated employment decision tool (AEDT) for an employment decision. The bill does not require an employer to use an AEDT in making an employment decision, but it does require that an employer utilize an independent bias auditing system of its AEDT if the employer elects to use an AEDT.
The bill defines "automated employment decision tool," or "AEDT" to mean any system the function of which is governed by statistical theory, or systems the parameters of which are defined by systems, including inferential methodologies, linear regression, neural networks, decision trees, random forests, and other learning algorithms, which automatically filter candidates or prospective candidates for hire or for any term, condition, or privilege of employment in a way that establishes a preferred candidate or candidates.
The bill defines "bias audit" to mean an impartial evaluation, including but not limited to testing, of an automated employment decision tool to assess its predicted compliance with the provisions of the "Law Against Discrimination," and any other applicable law relating to discrimination in employment.
The bill requires employers to post the result of bias audits on employer websites, and it requires employers to provide notice to employment candidates or applicants of the use of an AEDT in employment decisions.
This bill is modeled after regulations in the New York City Administrative Code addressing the use of AEDTs and bias auditing of those systems.
