New Jersey’s Focus on Algorithmic Discrimination and AI Compliance
As artificial intelligence (“AI”) technologies become more integrated into various industries, New Jersey businesses must take steps to ensure their AI tools comply with state laws, particularly around algorithmic discrimination. On January 9, 2025, New Jersey Attorney General Matthew J. Plankin issued guidance on how the New Jersey Law Against Discrimination (“NJLAD”) applies to AI, clarifying the state’s stance on algorithmic decision-making and data-driven technologies.
New Jersey’s guidance addresses algorithmic discrimination in AI systems. Under the NJLAD, AI tools must not discriminate against individuals based on protected characteristics, such as race, gender, or disability, in areas like employment, housing, or lending. Discrimination can occur both through disparate treatment, where individuals are treated unfairly based on these characteristics, and disparate impact, where AI decisions disproportionately affect certain groups.
The guidance encourages businesses to proactively evaluate and test their AI systems before deployment to ensure that they do not contribute to discriminatory outcomes. This includes assessing the data used to train AI models to ensure it is representative and free from bias. Ongoing monitoring and auditing of AI tools are also essential to detect any potential issues related to discrimination as the technology is used in real-world applications.
Compliance Recommendations for New Jersey Businesses.
Businesses using AI in New Jersey should consider the following steps to ensure compliance with the NJLAD:
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Assess AI tools and algorithms to ensure they do not unintentionally discriminate against protected classes.
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Regularly audit AI systems and retrain algorithms as necessary to eliminate any bias in decision-making.
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Ensure that AI systems used in employment, housing, lending, and other key areas comply with the NJLAD.
By carefully considering these guidelines, New Jersey businesses can reduce the risk of discrimination in AI systems while maintaining legal compliance.
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This article is for information purposes only. It is not intended to be and should not be relied on as legal advice for any particular matter.