As artificial intelligence (AI) and automated decision-making tools become increasingly prevalent in employment practices, New Jersey employers must be aware of their legal responsibilities under the New Jersey Law Against Discrimination (NJLAD). On January 9, 2024, the New Jersey Division on Civil Rights (DCR) released new guidance on algorithmic discrimination, emphasizing that discrimination caused by AI is just as unlawful as discrimination by human decision-makers.
What Is Algorithmic Discrimination?
Algorithmic discrimination occurs when AI-driven tools, such as hiring algorithms or employee monitoring software, produce biased outcomes that disadvantage individuals based on protected characteristics, including race, gender, age, disability, or religion. The DCR’s guidance underscores that employers are fully responsible for the technology they use and cannot shift liability onto third-party vendors.
Key Areas of Concern for Employers
Automated Decision-Making Tools in Employment
Common ways employers use AI:
- Screening resumes and filtering job applicants
- Conducting video interviews with AI-based scoring
- Employee productivity monitoring
- Performance evaluations and terminations
- While these tools promise efficiency, they can also reinforce existing biases if not properly tested and monitored.
How Algorithmic Bias Occurs
The DCR identifies three key factors that contribute to AI-driven bias:
- Design Flaws: If an algorithm is built using biased assumptions, it will likely generate discriminatory outcomes.
- Training Data Issues: AI learns from past data; if that data reflects historical discrimination, the system may perpetuate it.
- Deployment Bias: Even unbiased tools can produce discriminatory results depending on how they are implemented in real-world settings.
Employer Responsibilities Under NJLAD
Employers using automated decision-making tools must ensure their compliance with NJLAD. This includes:
- Conducting Bias Audits: Regularly testing AI tools for disparate impact.
- Transparency: Informing applicants and employees when AI tools are used in decision-making.
- Reasonable Accommodations: Ensuring AI systems do not disadvantage individuals with disabilities or other protected characteristics.
- Reviewing Vendor Agreements: Employers remain liable even when relying on third-party AI tools.
Potential Legal Consequences
If an AI tool disproportionately impacts a protected group, an employer may be found liable for disparate impact discrimination. The DCR’s guidance makes it clear: NJLAD “draws no distinctions based on the mechanism of discrimination.” Whether a biased hiring manager or a faulty algorithm causes the discrimination, employers are still responsible.
Protecting Yourself from Algorithmic Discrimination in the Workplace
As AI hiring tools become more common, employees must understand how to protect themselves from algorithmic bias. Under the New Jersey Law Against Discrimination (NJLAD), discrimination caused by automated decision-making is just as unlawful as human bias. But how can employees safeguard their rights when AI is involved?
First, transparency is key. Employers using AI-driven hiring or performance evaluation tools must disclose their use. If you suspect an AI system impacted your job application or workplace treatment, you have the right to ask how decisions were made. Requesting a human review of an AI-based rejection can help ensure fairness.
Employees should also document any AI-driven decisions that seem discriminatory. Keep records of job postings, application outcomes, and internal communications referencing AI. If an automated system appears to unfairly disadvantage certain groups—such as rejecting older applicants or failing to accommodate disabilities—you may have grounds to challenge it.
If internal complaints do not resolve the issue, employees can file a complaint with the New Jersey Division on Civil Rights (DCR). NJLAD holds employers responsible for the tools they use, meaning they cannot shift blame to third-party AI vendors.
Steps for Employers to Reduce Liability
AI-driven hiring and workplace decision-making require careful oversight to prevent algorithmic discrimination. Regular audits of AI tools help ensure that automated systems do not produce biased outcomes. Reviewing these tools on a routine basis allows businesses to catch issues early and maintain compliance with the New Jersey Law Against Discrimination (NJLAD).
HR teams need proper training on how AI-based tools function, their risks, and how they can unintentionally reinforce bias. Without a clear understanding, companies may rely too heavily on flawed algorithms, leading to unfair hiring and employment decisions.
Tracking hiring and promotion data is another important step. Monitoring outcomes helps employers spot patterns of discrimination and make adjustments before problems escalate. If AI-driven decisions negatively impact certain groups, businesses must take corrective action.
Legal guidance is also a key part of risk management. Working with an employment attorney in New Jersey helps employers stay ahead of new regulations and avoid costly compliance mistakes.
Looking Ahead: Legislative and Compliance Trends
New Jersey lawmakers are watching how AI impacts employment decisions. Two proposed bills, A. 3854 and A. 3911, would introduce new requirements, including mandatory bias audits and greater transparency in hiring decisions. Employers who stay informed and adjust their policies now will be better prepared if these regulations take effect.
Final Thoughts
As AI continues to reshape the workplace, employers must balance technological innovation with legal compliance. Ensuring fairness and transparency in AI-driven employment decisions is not just a legal necessity—it’s a business imperative.
For legal guidance on AI in employment practices, contact Ayesha Hamilton at Hamilton Law Firm, New Jersey’s trusted employment law attorney specializing in workplace discrimination and compliance.