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New Jersey: Bill on Automated Employment Decision Tools introduced to Assembly

On February 22, 2024, Assembly Bill 3854 for an Act regulating the use of automated employment decision tools in hiring decisions was introduced to the New Jersey State Assembly. Notably, on January 9, 2024, Senate Bill 1588 concerning the use of automated tools to assist with hiring decisions was introduced to the New Jersey State Senate.

Definitions

The bill defines an 'automated employment decision tool' as '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.'

An 'employment decision' means to screen candidates for employment or otherwise to help decide compensation or any other terms, conditions, or privileges of employment in New Jersey.

Obligations and bias audits

The bill stipulates that it shall be unlawful to sell or offer for sale in New Jersey an automated employment decision tool (AEDT) unless:

  • the AEDT is subject to a bias audit conducted in the past year prior to selling or offering the AEDT for sale;
  • the sale of the AEDT includes, at no additional cost, an annual bias audit service that provides the results of that audit to the purchaser; and
  • the AEDT is sold or offered for sale with a notice stating that the AEDT is subject to the provisions of the bill.

Employers who use an AEDT to screen a candidate for employment decisions must provide a summary of its most recent bias audit. Employers must also notify candidates of the use of an AEDT within 30 days of use:

  • that an AEDT, which is subject to a bias audit, was used in connection with the candidate's candidacy;
  • the job qualifications or characteristics that an AEDT was used to assess in the candidate; and
  • upon request, the source of the data collected and the data retention policy of the employer.

A 'bias audit' is defined as an impartial evaluation, including but not limited to testing, of an AEDT to assess its predicted compliance with the provisions of the Law Against Discrimination.

You can read the bill here and track its progress here.