New Jersey lawmakers mull restrictions on AI in hiring software

New Jersey employers using software to inform hiring decisions could face new rules to prevent unlawful discrimination.
Photograph of a woman looking at a computer screen with a job application document open.
(Ariel Skelley / Getty Images)

New Jersey lawmakers are considering a bill that would regulate the use of artificial intelligence in the hiring software that employers use to recruit and onboard workers. Backers of the bill say it will minimize the chances these systems discriminate against potential employees.

If passed, the bill would restrict New Jersey employers from using AI-powered hiring software unless it’s passed a “bias audit,” a review that looks for patterns of discrimination in hiring decisions. Employers would also have to notify job candidates if they use automation in their hiring processes. Companies that don’t make that disclosure could incur fines between $500 and $1,500 for each violation.

“This isn’t banning the use of this software, it’s just making sure that we are checking and auditing and putting some boundaries in place to ensure equity processes,” state Assemblyman Sadaf Jaffer, the bill’s primary sponsor, told The Record, a newspaper in North Jersey.

AI-powered software is used frequently in hiring to filter out applications that do not hold desired qualifications, quickly analyzing large volumes of data. The U.S. Justice Department warned in May 2022 that these automation tools could violate the Americans with Disabilities Act if not used with care.


“New technologies should not become new ways to discriminate,” Charlotte A. Burrows, chair of the Equal Employment Opportunity Commission, said last year. “If employers are aware of the ways AI and other technologies can discriminate against persons with disabilities, they can take steps to prevent it.”

The New Jersey bill, which was introduced last December, is currently under review by the state Assembly’s Science, Innovation and Technology Committee, following its approval last month by the Labor Committee. A version of the bill introduced in the state Senate last March has not made progress.

Across the Hudson River, New York City has already passed a similar bill restricting the use of “automated employment decision tools” without bias audits and appropriate disclosures. The city’s Department of Consumer and Worker Protection is set to begin enforcing the law on April 15.

The use of AI-driven decisions by city agencies, including the New York Police Department, was the subject of a 36 page report published in November 2019. The report called for the creation of a centralized organization within City Hall to develop best practices for agencies using algorithms in decision-making.

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