INTRODUCTION
On 29 April 2024, the US Division of Labor’s (DOL) Workplace of Federal Contract Compliance Applications (OFCCP) issued nonbinding steering (Guidance) on how federal contractors and subcontractors (collectively known as contractors) ought to use synthetic intelligence (AI) to make sure compliance with current equal employment alternative (EEO) obligations underneath federal legislation. OFCCP’s Guidance is a part of the federal authorities’s ongoing effort to deal with employers’ rising use of AI when making employment choices.1 Amongst different issues, the Guidance establishes new file holding necessities, asserts contractor legal responsibility for the actions of AI suppliers and describes the evaluation that might be utilized for figuring out whether or not AI practices have a disparate affect on protected teams.
OFCCP GUIDANCE ORIGINS & GOALS
OFCCP’s Guidance comes on the heels of President Biden’s October 2023 Govt Order on the Protected, Safe, and Reliable Growth and Use of Synthetic Intelligence (Govt Order 14110), which addressed coordinating the federal authorities’s response to the event and use of AI all through the US. Govt Order 14110 gave the secretary of labor one 12 months to “publish steering for Federal contractors concerning nondiscrimination in hiring involving AI and different technology-based hiring programs.” The overarching objective of OFCCP’s Guidance mirrors that of Govt Order 14110: selling the accountable and compliant use of AI whereas combatting potential AI-related bias or opposed affect in employment-related choices.
EMPLOYMENT-LAW CONSIDERATIONS FOR FEDERAL CONTRACTOR & SUBCONTRACTOR AI USE
As a threshold matter, OFCCP’s Guidance supplies complete definitions for AI, algorithms, and automatic programs, a few of that are already codified in federal rules.2 To the extent that OFCCP’s Guidance mirrors DOL’s current definitions of such phrases, that similarity might improve the probability that such interpretations obtain deference from state departments of labor or different federal businesses and thus have a broader affect on employers.
OFCCP’s Guidance additionally states that third-party AI distributors of employment-related software program (e.g., resumé scanners) should not answerable for complying with OFCCP’s nondiscrimination and affirmative-action necessities—solely federal contractors and subcontractors are. Thus, in line with OFCCP, federal contractors can’t delegate their compliance obligations to third-party AI distributors and can’t shift legal responsibility to third-party AI distributors.
This a part of OFCCP’s Guidance is in potential rigidity with the US Equal Employment Alternative Fee’s (EEOC) place on third-party AI vendor legal responsibility. On 9 April 2024, EEOC argued {that a} third-party AI vendor might probably be straight liable underneath Title VII of the Civil Rights Act of 1964 (Title VII), the People with Disabilities Act of 1990 (ADA), and the Age Discrimination in Employment Act of 1967 (ADEA).3
EEOC asserted that in sure circumstances a third-party AI vendor may very well be an employment company, oblique employer, and employer agent underneath Title VII, the ADA, and ADEA the place the seller allegedly “exercised adequate management over [plaintiff] and different candidates’ entry to employment alternatives to qualify as an oblique employer.”4 EEOC’s principle of legal responsibility centered on the third-party AI vendor’s alleged function as a gatekeeper between job candidates and potential employers.5
Notably, OFCCP’s Guidance requires federal contractors to keep up intensive data about their use of AI so OFCCP can successfully execute compliance evaluations and criticism investigations. Certainly, if federal contractors or subcontractors use a third-party AI vendor, they have to make sure that vendor contracts enable them to offer OFCCP with all AI-related data and can’t use a third-party distributors’ unwillingness or incapacity to offer such data as a protection.6
As well as, OFCCP’s Guidance explains that the company will proceed to make use of the Uniform Tips on Worker Choice Procedures (UGESP)7 when analyzing whether or not federal contractor AI use might trigger opposed affect on a protected group of job candidates or present workers. OFCCP’s use of UGESP in assessing AI use has been constant throughout administrations and mirrors the EEOC’s strategy in conducting related analyses.
OFCCP requires federal contractors and subcontractors to indicate that their use of AI is legitimate if it has an opposed affect on a protected group. Validity will be proven with research of the AI choice process (e.g., resumé scanners, search algorithms, and so forth.) centered on content material, standards, and development. Such validity research are supposed to present whether or not AI choice procedures, for instance, consist of knowledge that’s consultant, predictive, or considerably correlated with essential points of the job-at-issue for which candidates are being assessed.8
Pursuant to the UGESP, OFCCP should additionally embody in scheduling letters to federal contractors a request for info on how they intend to make use of AI in an employment context. Due to this fact, federal contractors which are chosen by OFCCP for an audit should initially determine any AI used once they make key employment choices. If, after analyzing key employment choices, OFCCP finds opposed affect on a job group or title primarily based on a protected group standing, then it would give the contractor a possibility to incorporate statistical controls, equivalent to most well-liked {qualifications} in hiring. Ought to OFCCP’s evaluation nonetheless detect opposed affect, it would ask if checks used associated to its discovering are validated and, in that case, may very well be in keeping with enterprise necessity. If such checks are legitimate, then OFCCP won’t decide that there was disparate affect on a protected group. If the checks are invalid, then a disparate affect might exist.
After all, federal contractors utilizing AI should additionally adjust to Part 503 of the Rehabilitation Act of 1973. This legislation bars incapacity discrimination in federal contracting employment, much like the ADA. Particularly, OFCCP expects federal contractors to inform job candidates and present workers of AI use within the office and allow them to hunt incapacity lodging linked to AI.
AI BEST PRACTICES FOR FEDERAL CONTRACTORS AND SUBCONTRACTORS
Though the AI panorama is ever evolving and laws, guidelines, and steering on the subject are ever altering, employers can and may take the next steps now to make sure that their use of AI is in keeping with the OFCCP’s Guidance:
- Present advance and clear discover to job candidates and workers about how AI is being utilized in key employment choices, together with hiring, firing, promotion, and so forth.
- Afford job candidates and workers a possibility to determine and proper potential misinformation thought-about by AI that influenced key employment choices.
- If workers are unionized or have AI working teams, then embody representatives or a broader variety of opinions in inner discussions and choices about AI use within the office.
- Be sure that personal and delicate job applicant and present worker info utilized by AI is shielded from disclosure to 3rd events.
- Often monitor and audit AI use to determine potential algorithmic bias or opposed affect previous to regulatory, media, or inner scrutiny.
- Periodically prepare supervisors and workers on AI use and make sure that a correctly skilled individual approves any AI-suggested employment choices.
- Create a everlasting AI governing physique to coordinate inner oversight and moral pointers.
- When utilizing third-party AI software program, make sure that distributors have thought-about and brought energetic steps to fight algorithmic bias and opposed affect, together with by means of criterion validity research, which will be borrowed underneath OFCCP’s steering, and make sure that your vendor contracts assist you to entry and disclose the seller’s data.
Lastly, the OFCCP didn’t foreclose the opportunity of extra company steering on AI use by federal contractors. Due to this fact, employers ought to monitor any updates from the company and alter their insurance policies, procedures and paperwork accordingly.
The legal professionals of our Labor, Employment, and Office Security follow and our OFCCP and Affirmative Motion Compliance space frequently counsel shoppers on the problems mentioned above and are well-positioned to offer steering and help to shoppers on these important developments.
1 OFCCP’s Guidance was issued with no notice-and-comment interval or suggestions from the federal contractor and subcontractor neighborhood concerning potential compliance considerations.
2 15 U.S.C.A. § 9401 (defining synthetic intelligence as “machine-based system that may, for a given set of human-defined goals, make predictions, suggestions or choices influencing actual or digital environments”). environments”).
3 See Transient for the EEOC as Amicus Curiae, Mobley v. Workday, Inc., 3:23-cv-00770-RFL (N.D. Cal.).
4 Id. at 17; see additionally Sibley Memorial Hospital v. Wilson, 488 F.2nd 1338, 1342 (D.C. Cir. 1973) (“Whereas neither hiring nor reinstatement could also be related exterior the context of direct employment, each injunctive and again pay reduction (within the sense of financial damages for misplaced employment alternatives) could also be obtainable, in an applicable case, in opposition to respondents who’re neither precise nor potential direct employers of specific complainants, however who management entry to such employment and who deny such entry by reference to invidious standards.”)
5 OFCCP’s Guidance didn’t acknowledge the potential rigidity between OFCCP’s and the EEOC’s place on this subject. OFCCP has persistently taken the place concerning third-party consultants {that a} contractor employer couldn’t delegate its compliance obligations to a third-party AI vendor since Govt Order 11246 requires federal contractors themselves to take affirmative steps to make sure that equal alternative is supplied in all points of employment.
6 This obligation is in keeping with OFCCP’s Web Applicant Rule, which requires federal contractors and subcontractors to keep up data about hiring by means of the web and different applied sciences (e.g., resumé searches from exterior web sites and inner resumé databases and substantive search standards, and so forth.). See https://www.dol.gov/agencies/ofccp/faqs/internet-applicants
7 See 41 C.F.R. § 60-3.1 et seq.
8 OFCCP’s Guidance is silent on methods to assess AI for algorithmic bias—in distinction to, for instance, New York Metropolis Native Legislation 144, which mandates annual bias audits for automated employment determination instruments utilized by employers—so the company, for now, will solely assess AI from a authorized compliance perspective if opposed affect happens.