Section 1 - Description
Section 2 - Scope
Section 3 - Requirements
Section 4 - Penalties
Section 5 - Status
If passed, it will become illegal to sell or offer for sale automated employment decision tools (AEDTs) without having conducted an independent audit for bias in the past 12 months. Additionally, employers using AEDTs must give applicants notification of the usage of AEDTs.
The bill sets limits on companies who sell or offer AEDTs for use in New Jersey
According to the bill, AEDTs are defined as any tool that is defined by statistical methods or other inferential learning methods that automatically filter candidates for employment. This is a more narrow definition than NYC Local Law 144 because it only covers tools that automatically filter, where NYC LL144 considers usages where an AEDT is used but not the sole criterion considered.
The Act sets out regulations for companies who sell AEDTs and employers who use them.
Vendors are not permitted to sell or market AEDTs in New Jersey without either conducting a bias audit on the tool in the past 12 months, or offering an annual bias audit service to clients at no additional cost. The bias audit must be conducted by an impartial actor and assess for discrimination according to the NJ Law Against Discrimination of 1945, which prohibits discrimination on the basis of race, creed, color, or national origin or ancestry.
Companies using AEDTs are required to notify candidates, within 30 days of the usage of an AEDT, that an AEDT was used in connection to the candidate’s application and what criteria the AEDT is assessing. Note that this notification is given after use of an AEDT, rather than before usage as in NYC Local Law 144. As such, the NJ law does not require employers to give candidates the option of an alternative assessment method, if feasible.
Currently, the bill does not cover employers using AEDTs built in-house. We will need to watch this bill as it develops.
The bill provides for civil penalties of at most $500 for the first offense and at most $1,500 for each following offense. The penalties apply both to vendors selling AEDTs in violation of the law (where penalties accrue on a daily basis for each AEDT) and to employers who fail to notify candidates of the usage of the AEDT.
The bill has not been passed yet. The current version of the bill says it will take effect immediately once passed.