Are Your Automated Hiring Tools Fair? What You Need to Know About AI Hiring
Hiring has changed a lot in the past few years. AI tools are now helping companies scan resumes, identify red flags, and even score how likely a candidate is to succeed. These tools can save time, especially when you’re hiring at scale. But there’s a growing concern about how fair and accurate those systems are.
Automation promises to remove bias. But that only works if the system is built right. If an algorithm is trained on flawed or incomplete data, it can reinforce the very biases we’re trying to avoid. And since many of these tools are what people call “black boxes,” it’s not always clear how decisions are being made or who’s accountable when something goes wrong.
The NYC law that got everyone talking
In 2023, New York City implemented Local Law 144. It requires employers who use AI hiring tools to do a few things:
- Get an independent bias audit every year
- Tell candidates when an automated tool is being used to evaluate them
- Share what kinds of data are collected and how they’re being used in the decision-making process
Even though this law only applies to NYC, it’s starting to influence how other cities and states think about regulating AI in hiring. It also raised some red flags. A recent study from April 2025 pointed out how uneven and inconsistent these audits have been so far. Definitions are vague, and transparency is still lacking. For employers trying to stay compliant, it’s not always clear what’s expected.
Why this matters to everyone, not just NYC companies
This trend is headed your way even if you’re not based in New York. Other states like California and Illinois are considering similar rules. The Equal Employment Opportunity Commission (EEOC) and the Consumer Financial Protection Bureau (CFPB) are already warning companies about potential discrimination risks in automated systems. And if you’re hiring internationally, you should know that the European Union is rolling out some of the most rigid AI laws in the world.
If your hiring process includes AI—resume scoring, background check prioritization, or even chatbot screening, you’ll want to ensure it can withstand legal and ethical scrutiny.
What innovative companies are doing right now
You don’t need to overhaul everything, but a few key actions can help you get ahead of this:
- Take stock of your tools. Figure out where AI or automation is used in your hiring process. Even tools that “support” decisions can have a significant impact.
- Ask vendors good questions. Can they explain how their tools work? Have they had a recent bias audit? Do they document how candidate data is used?
- Train your team. Ensure that HR and legal staff understand automated decision tools and the risks they might carry.
- Document your process. Good records help you show consistency, fairness, and compliance if anyone asks.
What This Means for Background Screening
Background checks are also evolving. Some vendors automate everything, but that doesn’t always lead to better results. You still need to know that the data is accurate and you’re interpreting it correctly.
At Private Eyes, we’ve seen more employers looking for ways to streamline hiring without cutting corners on quality or compliance. Background screening is critical in fair hiring, meaning reports must be clear, accurate, and easy for employers and candidates to understand.
How Private Eyes Supports Fair Hiring
Our team verifies results carefully, ensures compliance with the Fair Credit Reporting Act (FCRA), and provides documentation under scrutiny. We also work with clients to help them understand what the data means and how to use it responsibly, especially when automated tools are involved.
We’re also mindful of how background checks fit into a broader hiring strategy. That includes supporting candidates’ rights to dispute inaccuracies, offering flexible screening packages that meet industry-specific compliance needs, and staying on top of emerging laws that affect AI and employment practices.
Our goal is simple: help companies make informed hiring decisions while keeping fairness front and center.
Bias audits like the ones NYC now requires are just the beginning. The future of hiring is more transparent, regulated, and candidate-focused. Companies that invest in ethical, explainable, and accurate processes today will be better prepared for whatever comes next.
Key Takeaways
- Automation and scoring systems can unintentionally reinforce bias if they rely on flawed or incomplete data.
- Regulations like NYC’s Local Law 144 are leading the way. Transparency, bias audits, and candidate disclosures are becoming expectations.
- Now’s the time to evaluate what tools you’re using, how decisions are made, and whether you can explain those decisions if challenged.
- Accurate, compliant, and transparent screening helps ensure qualified candidates aren’t wrongly excluded.
- Candidates care about how they’re evaluated. Organizations that prioritize fairness and accountability earn trust and attract stronger talent.
Have questions? Speak to a Private Eyes expert for more information.