Bloomberg Law: AI and ‘Bossware’ Targeted by NY Workplace Restrictions Bill

New York employers could face stiff restrictions on artificial intelligence and how they gather data about employees under legislation introduced in the state Senate Friday.

The legislation (S7623) would ban AI-only decision-making for hiring and other employer decisions while allowing certain types of electronic monitoring to continue if certain conditions are met. Businesses also face new limits on the data they gather about workers.

“If implemented, [the bill] only bans certain high-risk and arguably illegal uses of AI, for example, to union bust or discriminate, and it makes sure that employers prove that the algorithms they use don’t discriminate against workers and requires them to disclose what they’re using AI for,” Senate Judiciary Committee Chairman Brad Hoylman-Sigal (D), who introduced the bill, said in an interview.

So-called “bossware” has become commonplace. One quarter of organizations report using automation and AI when making decisions like hiring, according to a 2022 survey by the Society for Human Resource Management.

Any decisions powered by automated systems for matters like “hiring, promotion, termination or disciplinary decisions,” must face final review by humans, according to the bill’s text. Such tools would also face a “bias audit” that employees could review in addition to notifications on how their data is feeding AI systems.

“Facial recognition, gait, or emotion recognition technology” would be banned from New York workplaces, but the proposed bill would allow employers to use “bossware” to track workers’ physical and digital footprints as long as it occurs during working hours, utilizes the “least invasive means,” and serves a legitimate business purpose.

Examples include allowing someone to perform an “essential job function,” assessing employee performance, maintaining labor law compliance, and protecting workplace safety. Violators could face fines as high as $1,500 per offense.

Interest From Hochul

State-level efforts to crack down on AI and workplace surveillance come after the National Labor Relations Board warned employers last year that certain types of electronic monitoring are illegal. Congress has yet to take definitive action on the matter.

“When the federal government is not acting, it’s incumbent on states like New York to take the lead,” said Hoylman-Sigal.

His proposal follows the 2021 approval of legislation requiring employers to provide notice when they monitor them in certain ways. New York City began mandating bias audits for any automated hiring systems that same year under Local Law 144.

Like Hoylman-Sigal, Gov. Kathy Hochul (D) expressed a desire to address growing worries about AI with minimal barriers on innovation.

“I want to make sure that we’re protecting the public, number one. That is my top priority,” she told Bloomberg Law on Thursday when asked about AI at an unrelated Albany press conference.

Hochul added that she wants to find “if there’s areas where the state can find a role for us to put in standards, or have requirements in place to make sure that we’re taking advantage of these technologies.”

Any New York state crackdown on AI and workplace surveillance will likely have to wait until at least next January, when state lawmakers are scheduled to return to the state Capitol, but Hoylman-Sigal said interest in the issue is growing among his legislative colleagues.

“I think we’ll be seeing a lot of bills introduced between now and January,” he said. “I’m also not going to suggest that [my bill] is going to be the only approach. There will be others and, really, we’re going to be looking at a mixture of approaches on this very complicated and nuanced topic.”