Rules for AI hiring tools begin to take shape

Delivered every Monday by 10 a.m., Weekly Shift examines the latest news in employment, labor and immigration politics and policy.

Aug 14, 2023 View in browser   By Nick Niedzwiadek QUICK FIX EMPIRE STATE OF MIND: The use of AI tools in hiring decisions is still in its infancy but policymakers and businesses are starting to build up some support structures to prevent abuses and civil rights violations. California, New Jersey and Washington, D.C., are among those that have introduced bills related to AI employment issues in recent years. New York City got out to an early lead, passing a local law in 2018 creating an automated decision systems task force to study the issue and present recommendations, which it did in late 2019. City lawmakers in 2021 then followed up with legislation barring employers from using automated employment decisions tools unless they have passed annual audits to screen for potential bias and make job applicants aware that this software is being utilized. Those requirements took effect earlier this year, though the Department of Consumer and Worker Protection only began enforcing it on July 5. To date the agency has received one complaint that is under investigation, spokesperson Michael Lanza told POLITICO. “As soon as New York starts to send out those enforcement letters … you will see companies get in line on this really quickly,” said John Rood, CEO of Proceptual, an AI-compliance firm with several dozen clients that operate in the city. Failure to comply with these rules could expose employers to fines of up to $1,500 per day, though groups like the New York Civil Liberties Union have raised a number of shortcomings in the law’s design and what it does and doesn’t cover. For instance there’s no direct requirement that an employer stop using a given tool if it fails a bias audit, according to a DCWP guidance document released in late June. But existing municipal, state and federal anti-discrimination laws could all still come into play and deter a company from continuing to use that technology. To that end, the Equal Employment Opportunity Commission last week reached a settlement in its first lawsuit involving AI hiring tools against a company accused of illegally used software to screen out older applicants, Reuters reports. But a primary concern of algorithms and AI-based technology is the opaque nature of how they work and reach the results that they do. The NYC law’s bias audit requirement is an attempt to address that, though the industry trying to service those needs is in early days of its own. There’s not yet an equivalent to the Big Four accounting firms that major corporations rely on to verify their books — an admittedly flawed system that is nonetheless a lynchpin of financial trust. “There’s not any sort of regulation around who can be an auditor,” Rood said. “My guess is that changes … but that doesn’t exist today.” GOOD MORNING. It’s Monday, Aug. 14. Welcome back to Morning Shift, your go-to tipsheet on labor and employment-related immigration. It’s been 153 days since the Senate received Julie Su’s nomination. Send feedback, tips, and exclusives to NNiedzwiadek@politico.com and OOlander@politico.com. Follow us on X at @nickniedz and @oliviaolanderr.   YOUR TICKET INSIDE THE GOLDEN STATE POLITICAL ARENA: California Playbook delivers the latest intel, buzzy scoops and exclusive coverage from Sacramento and Los Angeles to Silicon Valley and across the state. Don't miss out on the daily must-read for political aficionados and professionals with an outsized interest in California politics, policy and power. Subscribe today.     Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories. Unions McORGANIZING: California labor unions and major fast food chains are in the midst of an intense lobbying battle in the final weeks of the year’s legislative session in the latest round of the fight over unionizing the franchise-heavy sector, our Jeremy B. White reports. Last year, Democrats narrowly pushed through a law establishing a fast food labor council with the authority to raise wages and set working conditions, which has been put on hold ahead of a 2024 industry-backed ballot referendum. In response the Service Employees International Union is seeking additional rules clamping down on franchisors by tightening the joint employer standard, while franchise business owners and their allies are warning that such rules could lead to an exodus of some of the most recognizable restaurant brands. At the center of the stand of the sea of competing interests sits Gov. Gavin Newsom, whose support is key to any deal. More union news: “Wells Fargo Illegally Restricted Union Activism, US Labor Board Officials Allege,” from Bloomberg. Even more: “Teamsters, Yellow Step Up Accusations on Trucker’s Collapse,” from The Wall Street Journal. Around the Agencies $100M FOR NURSING PIPELINE: The Department of Health and Human Services said Thursday it would award more than $100 million to grow the nursing workforce, our Daniel Payne reports for Pro subscribers. The funding will go to programs to train registered nurses, nurse practitioners, certified nurse midwives and nurse faculty. Some of the money will also be for efforts allowing active nurses to continue developing additional skills. About two-thirds of that money will be put toward training nurses to deliver primary care via advanced nursing education, as well as nurse practitioner residency and fellowship programs. DOL, NGA TEAM UP: The Labor Department last week announced it is partnering with the National Governors Association to provide technical assistance to state officials on workforce development strategies. The Employment and Training Administration will work with NGA’s Center for Best Practices as governors and state agencies develop their next four-year workforce development plans due in 2024 as part of the Workforce Innovation and Opportunity Act. ETA has previously worked with the organization on other initiatives, including things like apprenticeships, according to a DOL spokesperson. NGA prides itself on being a neutral venue for states’ chief executives to trade notes and share experience, but it has seen a drop-off in participation from Republican governors in recent years. More agency news: “Labor Dept. will offer training on new rules to boost some federal contractors' wages,” from Government Executive. On the Hill ASKING POLITELY: The White House is asking Congress for $60 million across the Agriculture and Interior Departments to avoid a rapidly approaching funding cut in wildland firefighter pay as the fire reason ramps up, our Meredith Lee Hill reports for Pro subscribers. The White House request includes $45 million in funds for USDA and $15 million for Interior to continue current wildland firefighter pay levels, which are slated to hit a cliff in the coming weeks, just as the fire season is hitting full stride. The ask is part of a larger supplemental funding request the Biden administration is submitting to Congress to address dwindling domestic disaster aid and provide new military assistance to Ukraine amid Russia's war. IN THE STATES THE NEW 529 FUND: Illinois is poised to become the first state to require child social media personalities see a cut of the money made off their content, The Associated Press reports. “Many states already require parents to set aside earnings for child entertainers who perform in more traditional settings such as movies and television, but Illinois’ law will be the first to specifically target social media starlets, according to Landon Jacquinot, who is tracking child labor legislation for the National Conference of State Legislatures.” The law, set to take effect in July 2024, applies to material created in-state and features children at least 30 percent of the time within a given timeframe and earns at least 10 cents per view. More state news: “California unions revive bid to pay unemployment to striking workers,” from POLITICO California’s Lara Korte. More (not) state news: “D.C.’s Black-White Unemployment Gap Is The Worst In The Nation,” from DCist. In the Workplace TILTING AT REVOLVING DOORS: Remote work has shown itself to be rather resilient across the country’s millions of offices, a vexing challenge (for employers and the corporate real estate industry) that has struggled to overcome the utility and convenience for workers it offers. But the subject has proven to be a deep wellspring for the take economy, as the opinion set regularly offers their best guesses at how to lure employees back to their desks. Of late, Bloomberg suggested the introduction of French-style lunch vouchers and The Washington Post declared war on open-office plans. More workplace news: “Laundry company owners guilty of trafficking migrants, minors for labor,” from The Washington Post. IMMIGRATION ‘U’ COULD BE BETTER: Multi-year backlogs are plaguing a visa program designed to assist victims of, or witnesses to, crimes and encourage them to cooperate with authorities, NPR reports. The delays are just one of many problems plaguing the system and discouraging immigrants from assisting law enforcement in rooting out misdoing. “A 2022 federal report found that the U visa program was not being managed effectively and was susceptible to fraud. It cited a growing backlog, no system to accurately track the number of visas granted per year and no tracking of fraud investigations.”   DON’T MISS POLITICO’S TECH & AI SUMMIT: America’s ability to lead and champion emerging innovations in technology like generative AI will shape our industries, manufacturing base and future economy. Do we have the right policies in place to secure that future? How will the U.S. retain its status as the global tech leader? Join POLITICO on Sept. 27 for our Tech & AI Summit to hear what the public and private sectors need to do to sharpen our competitive edge amidst rising global competitors and rapidly evolving disruptive technologies. REGISTER HERE.     What We're Reading — “Starbucks Prevails in Legal Challenge to Its Diversity Policies,” from The Wall Street Journal. — “Before Joining Federal Safety Program, Freight Railroads Push to Change It,” from The New York Times. — “Italian cheesemaker crushed to death by wheels of his grana Padano,” from The Washington Post. — “Before a Bot Steals Your Job, It Will Steal Your Name,” from the Atlantic. — “HCA Hospitals Skipped Union on Pandemic Pay, NLRB Rules,” from Bloomberg Law. THAT’S ALL FOR SHIFT!    Follow us on Twitter Nick Niedzwiadek @nickniedz Olivia Olander @oliviaolanderr   Follow us

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