NJBIA testified on Thursday that legislation to regulate the use of AI-based technologies in the workplace would create compliance burdens and be regulatory overkill because workplace discrimination is already illegal in New Jersey whether by people or algorithms.
The bill, S-4075, is intended to prohibit discriminatory uses of AI, but instead goes much further by creating an expansive new regulatory structure governing employers’ use of technology in routine workplace decisions, including independent impact assessments, public reporting, employee notice, ongoing monitoring, data-retention requirements, human review, appeal procedures and new avenues for liability, NJBIA said.
These new regulatory compliance obligations would be burdensome for New Jersey businesses, particularly those without dedicated legal, compliance and technology teams, NJBIA Policy Analyst Jack Kelly and Research Analyst Jack Ramirez told the Senate Labor Committee.
“We understand and support the intent behind S-4075: ensuring that emerging technologies do not become a vehicle for unlawful workplace discrimination. But discrimination is already illegal in New Jersey, regardless of whether a decision is made by a person or an algorithm,” Kelly and Ramirez said in their written testimony.
The New Jersey Law Against Discrimination (NJLAD) prohibits both intentional discrimination and employment practices that have an unlawful disparate impact on protected classes, Kelly and Ramirez said. The Division on Civil Rights has specifically clarified that these protections apply to artificial intelligence and automated decision-making tools, they noted.
“If there are gaps in those protections created by new technology, we welcome a conversation about how to close them. S-4075, however, goes far beyond closing a discrimination loophole,” Kelly and Ramirez said.
The wide scope of the definitions contained in the legislation is particularly concerning, they said. An “automated employment decision system” is defined broadly enough to include a “computational process” that uses employee information together with machine learning, statistical modeling, data analytics, artificial intelligence or similar methods to produce outputs used in employment-related decisions. And those employment decisions include not merely hiring or termination, but decisions affecting work schedules, compensation and work tasks.
“As written, those definitions could capture routine workplace technologies that employers already use every day,” Kelly and Ramirez said. “A spreadsheet or software program that analyzes staffing, payroll or scheduling data could potentially qualify simply because it uses ‘data analytics’ to inform a workplace decision. Nor does the technology need to make the decision itself—the bill can apply when its output is merely used by an employer in making that decision.”
The burden is compounded by requirements that may depend on information employers do not possess, Kelly and Ramirez said. Businesses purchasing widely available, off-the-shelf technology may have little ability to obtain proprietary information about how those products were developed, trained or tested, yet the employer may still bear responsibility for complying with requirements tied to that information, they said.
“Rather than building an expansive regulatory system around virtually every workplace use of data analytics or AI, we respectfully encourage the Legislature to identify specific harms that existing law does not address and target those gaps directly,” Kelly and Ramirez said.
“Doing so would protect employees while providing employers the clarity necessary to comply, innovate and continue adopting technologies that are increasingly part of everyday business operations,” they said.
The Senate Labor Committee voted to advance the bill.
Photo caption: (L-R) NJBIA's Jack Ramirez and Jack Kelly testifying before the Senate Labor Committee on Oct. 1.
