White House Declares Policy Regarding Use of AI in Employment Decisions in New Jersey and Nationwide

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.

The White House issued the EO on AI on October 30, 2023. It addresses a wide range of ways that the use of AI could conflict with federal law. In the context of employment, this could include AI algorithms that subject people to disparate impact discrimination under laws like Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act of 1990.

Section 6 of the EO addresses the impact of AI in employment settings. First, it directs the U.S. Department of Labor (DOL) to prepare a report assessing the extent to which AI could displace workers and whether the government has the resources to support people who find themselves out of a job because of AI.

The EO also instructs the DOL to develop “principles and best practices for employers” that can, in part, “mitigate AI’s potential harms to employees’ well-being.” The DOL has until late April 2024 to complete this process. The EO directs it to consult “with other agencies and with outside entities” like labor unions. The Equal Employment Opportunity Commission and other agencies have already started collaborating on efforts to address bias in AI tools.

An experienced employment attorney can help you assert your rights if your employer has engaged in unlawful acts and caused you harm. The Resnick Law Group represents New Jersey and New York workers in claims for discrimination and other violations of federal and state law. Please contact us today online, at 973-781-1204, or at 646-867-7997 to schedule a confidential consultation with a member of our team.

Contact Information