Employers are increasingly relying on tools that use artificial intelligence (AI) for various employment-related purposes. AI tools can be useful for tasks that require sifting through large amounts of information, such as the hiring process. New Jersey employment laws set limits on employers when they are making hiring decisions. Employers may not, for example, screen job candidates based on protected categories like disability, genetic history, or pregnancy. Employers are liable for these types of hiring decisions even when they outsource them to someone else. This includes AI tools, but the law in New Jersey remains unclear on how laws against employment discrimination apply to virtual decision-makers. The White House recently issued an executive order (EO) providing directives to various executive agencies regarding AI. These include instructions to agencies that enforce federal employment laws to review current AI practices with the goal of “ensur[ing] that AI deployed in the workplace advances employees’ well-being.”
The New Jersey Law Against Discrimination (NJLAD) prohibits employers from taking various adverse actions against job applicants and employees solely based on factors like race, religion, sex, sexual orientation, disability, and others. This includes refusing to consider someone for employment because of a protected category. Many of the categories identified by the NJLAD have historically served as the basis for countless adverse hiring decisions.
One concern about the use of AI in screening job applicants and assisting in hiring decisions is that human biases, whether consciously held or not, could become part of the software’s algorithms. Neither federal nor New Jersey employment laws currently address this concern. New York City enacted a bill several years ago that requires periodic “bias audits” for AI-based tools that employers use in the hiring process. This process involves reviewing AI tools to see if they have any sort of disparate impact on members of protected categories. Lawmakers introduced a similar bill in the New Jersey Assembly in December 2022, but it has not advanced beyond its initial committee assignment.