/>iUnder a recently introduced bill, employers across New York State could face new restrictions on the electronic surveillance of workers and the growing use of automated decision-making and artificial intelligence (AI) technology to make employment decisions.
Quick Hits
- Proposed New York State bill would restrict employers’ use of electronic monitoring and automated employment decision-making technology.
- The bill would require employers to notify employees and job candidates that such tools are being used and specifically require automated employment decision tools to be subjected to bias audits.
- New York City recently enacted its own restrictions on automated employee decision tools, which took full effect in July 2023.
Senate Bill (S) 07623, introduced on August 4, 2023, seeks to address privacy concerns with electronic surveillance, or so-called “bossware,” and concerns that automated decision-making tools result in discrimination against individuals with disabilities or against other members of protected groups. Employers across the country have increasingly come to rely on electronic monitoring to increase productivity, especially with large segments of the workforce working remotely at least part-time. In addition, automated employment decision tools (AEDTs), which often incorporate cutting-edge AI, are being used to increase efficiency and aid in a variety of ways, including screening job applications and to assessing job candidates or employees for hiring or promotions.
Amid the concerns with how this new technology is impacting employees and job candidates, S07623 could make New York State the latest jurisdiction to restrict employers’ use of such tools and expand on the state’s notice requirements for employee monitoring implemented in 2022. The proposed bill further comes on the heels of a similar law regulating the use of AEDTs passed by New York City, which took full effect on July 5, 2023.
Electronic Monitoring
The bill would make it unlawful for employers or employment agencies to use an electronic monitoring tool “to surveil employees” residing in the state unless the use is intended to accomplish a specific allowable purpose, is “strictly necessary to accomplish the allowable purpose,” is “the least invasive means to the employee that could reasonably be used accomplish the allowable purpose,” and is “limited to the smallest number of workers and collects the least amount of data necessary.”
The bill would apply to “electronic monitoring tool[s]” defined as “any system that facilitates the collection of data concerning worker activities or communications by any means other than direct observation, including the use of a computer, telephone, wire, radio, camera, electromagnetic, photoelectronic, or photo-optical system.”
Employers that intend to use electronic monitoring would be required to notify employees who reside in the state. Such notification would have to provide certain information, including but not limited to: a description of the allowable purpose; the specific data to be collected; the date, times and frequency collection will occur; and whether that data collected be input into an AEDT. These notice provisions would significantly expand the notice requirements imposed by S 2628, which as we previously reported, took effect on May 7, 2022.
Under the bill, employers would be prohibited from selling or transferring data collected via an electronic monitoring tool. The bill also spells out particular restrictions on the collection, storage, and destruction of data collected by electronic monitoring tools.
The bill would further prohibit employers from requiring employees to install monitoring applications on personal devices “or to wear, embed, or physically implant those devices, including those that are installed subcutaneously or incorporated into items of clothing or personal accessories, unless the electronic monitoring is strictly necessary to accomplish essential job functions.”
Employers would be prohibited from using electronic monitoring tools “to monitor employees who are off-duty and not performing work-related tasks,” and location-tracking applications would be required to be disabled outside of the activities and times necessary to perform jobs.
Automated Decision-Making Tools
Similar to the New York City law, S07623 would prohibit “automated employment decision tools” that are used to “substantially assist or replace discretionary decision making” unless such tools are subjected to a bias audit “no more than one year prior to the use of such tool” for which a summary of results are made publicly available on the website of the employer or employment agency. Even then, employers would be prohibited from relying solely on an output from an AEDT “when making hiring, promotion, termination, disciplinary, or compensation decisions.”
The bill’s definition of AEDT closely tracks the definition in the New York City law and would define an AEDT as “any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues simplified output” such as a “score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making” to make employment-related decisions. Such decisions would include any that impact employees’ compensation, hours, or work schedules, or are used to evaluate performance for the purpose of hiring, promotion, discipline, or discharge, or impact the assignment of work or work opportunities.
Before using an AEDT to screen job candidates or evaluate employees, employers and employment agencies would be required to notify each job candidate or employee “who resides in the state” that an AEDT is being used, no less than ten business days before it is used, and allow “a candidate to request an alternative selection process or accommodation” that does not involve the AEDT. Employers and employment agencies would also be required to disclose the job qualifications and characteristics that the AEDT will use to make an assessment and “any outputs” the AEDT will produce, also no less than ten business days in advance.
Employers would not be allowed to require employees or job candidates applying for a position to consent to the use of an AEDT in order to be considered or disadvantage employees or candidates solely on their request for an accommodation.
Further, the bill would prohibit the use of an AEDT in a “manner as to unduly or extremely intensify the conditions of work or to harm the health and safety of employees,” to make predictions about employees’ behavior or personality not related to the job’s essential functions, or “to implement a dynamic wage-setting system that pays employees different wages for the same work.” Additionally, the bill would restrict the collection of biometric information including “facial recognition, gait, or emotion recognition technologies.”
Penalties
Under the bill, each day that an electronic monitoring tool or AEDT is used would give rise to a separate violation. A failure to provide the required notice to job candidates and employees would constitute a separate violation. The bill would allow recovery of civil penalties in an administrative forum or in any court of competent jurisdiction. The New York State attorney general would also be empowered to initiate court proceedings “that may be appropriate or necessary for correction of any violation,” including mandating compliance or other appropriate relief.
Next Steps
Employers across the United States are increasingly relying on electronic monitoring technology and AEDTs to increase productivity and efficiency. However, several states and federal regulators have been scrutinizing the impact of these new technologies, particularly with respect to the potential for them to have a discriminatory impact against individuals with disabilities or disparate impact on other protected groups.
The newly proposed S07623 seeks to expand restrictions on AEDTs across the state after a recently passed New York City law on the issue. Final rules on that New York City law took effect on July 5, 2023, and the city has released additional guidance. The newly proposed bill would further add new electronic monitoring restrictions.
