(a) Practices and policies that have a disparate impact, as defined at (b) below, on members of a protected class, even if these practices and policies are not discriminatory on their face (that is, facially neutral) and are not motivated by discriminatory intent, will be considered discriminatory and a violation of the Act, unless it is shown that such practices and policies are necessary to achieve a substantial, legitimate, nondiscriminatory interest and there is no less discriminatory alternative that would achieve the same interest. (b) A practice or policy has a disparate impact where it actually or predictably results in a disproportionately negative effect on members of a protected class. A practice or policy predictably can have a disparate impact when there is evidence that the practice or policy will have a disparate impact even though the practice or policy has not yet been implemented, if the practice or policy has been approved, announced, or otherwise finalized. However, a practice or policy that is simply being debated or deliberated internally by a covered entity cannot be challenged pursuant to this chapter before it is implemented, approved, announced, or otherwise finalized.

(c) Automated employment decision technology practices are as follows: 1. The use of automated employment decision tools to make employment decisions, including, but not limited to, decisions related to advertising, recruiting, screening, interviewing, hiring, and compensation, or any other terms, conditions, or privileges of employment, may have a disparate impact on applicants and employees based on their race, national origin, gender, disability, religion, and other protected characteristics. By way of example, but not limitation, an automated employment decision tool that uses data on a company's current employees to inform a search for candidates may have a disparate impact on members of protected classes that are not well represented in that company or industry. If most current employees at a computer science company are white, cisgender men, an automated employment decision tool that assesses applicants based on that pool may score women applicants lower because their resumes list "women's field hockey" rather than "football," or score Black applicants lower because their resumes list "Black Student Alliance," an organization in which the company's current employees are less likely to have been involved; 2. The use of an automated employment decision tool that limits or screens out applicants based on their schedule may have a disparate impact on applicants based on their religion, disability, or medical condition and must include a mechanism for applicants to request a reasonable accommodation. By way of example, but not limitation, an application asking if an applicant is available to work a proposed schedule of Monday through Saturday may screen out applicants who answer the question in the negative due to religious practices they engage in on Saturdays; and 3. An employer's use of an automated employment decision tool that has not been adequately tested and shown to not adversely affect people in a protected class before its use may have a disparate impact on members of that protected class. By way of example, but not limitation, an employer's use of facial analysis technology to detect personality traits during virtual interviews is likely to result in lower scores for interviewees whose facial expressions the tools have not been tested on and designed to read. If the technology was tested exclusively or predominantly on white people with no disabilities, then use of the technology may disproportionately impact interviewees with darker skin or interviewees with disabilities because the technology cannot match their facial expressions to those programmed into the tool and may not account for interviewees who cannot make certain facial expressions. i. The use of facial analysis technology may disproportionately impact interviewees wearing religious headwear or maintaining religiously mandated facial hair if the technology has not been tested on people with similar religious practices.

(e) If a respondent's practice or policy that results in a disparate impact based on a protected characteristic relies on conduct, standards, products, procedures, or systems of an outside person or vendor, the respondent must take reasonable steps to ensure that the outside person or vendor's conduct, standards, products, procedures, or systems are consistent with the Act and this chapter.

(a) A complainant challenging a practice or policy of a covered entity must show the practice or policy challenged has a disparate impact on members of a protected class. (b) In the employment, public accommodations, and contracting contexts, if the complainant meets the burden of proof at (a) above, the respondent has the burden of showing that the challenged practice or policy is necessary to achieve a substantial, legitimate, nondiscriminatory interest. In the employment context, whether a practice or policy is necessary to achieve a substantial, legitimate, nondiscriminatory interest is equivalent to whether the practice or policy is job related and consistent with a legitimate business necessity. A practice or policy is job related when it bears a demonstrable relationship to successful performance of the job and measures the person's fitness for the specific job. (c) In the employment, public accommodations, and contracting contexts, if the respondent meets the burden at (b) above, the complainant has the burden of showing that there is a less discriminatory alternative means of achieving the substantial, legitimate, nondiscriminatory interest. (d) To meet its burden of proof at (a), (b), or (c) above, a party must provide empirical evidence, meaning evidence that is not hypothetical or speculative, to support its allegations. For example, a complainant would not meet its burden to show an employment policy has a disparate impact on job applicants based on gender by speculating that the policy harms women more than men, but could meet its burden by providing empirical evidence, which could include applicant files or data or applicant selection rates by gender. Anecdotal evidence, while not sufficient on its own, may be introduced along with empirical evidence. For example, a complainant would not meet its burden to show an employment policy has a disparate impact on job applicants based on gender by solely providing that they know women who applied and did not receive a position but men who did. However, a complainant could introduce anecdotal evidence along with empirical evidence, such as applicant selection rates by gender. (e) The opposing party may rebut whether the party with the burden of proof at (a), (b), or (c) above has met its burden. (f) Additional proof may be required when challenging or defending particular practices or policies. Such requirements are noted in this chapter, where relevant.

(b) To establish that a challenged practice or policy is necessary to achieve a substantial, legitimate, nondiscriminatory interest, a respondent must establish that: 1. The practice or policy is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests, where "substantial interest" means a core interest of the entity that has a direct relationship to the function of that entity, "legitimate" means that a justification is genuine and not false or pretextual, and "nondiscriminatory" means that the justification for a challenged practice or policy does not itself discriminate based on a protected characteristic; and 2. The practice or policy effectively carries out the identified interest. (c) The determination of whether an interest is substantial, legitimate, and nondiscriminatory requires a case-specific, fact-based inquiry. An interest in achieving diversity or increasing access for underrepresented or underserved members of a protected class may constitute a substantial, legitimate, nondiscriminatory interest.

(a) Employment practices and policies may be unlawful if they have a disparate impact on members of a protected class. An employment practice or policy that has a disparate impact is prohibited unless, in accordance with N.J.A.C. 13:16-2.2, a respondent shows it is necessary to achieve a substantial, legitimate, nondiscriminatory interest. Whether an employment practice or policy is necessary to achieve a substantial, legitimate, nondiscriminatory interest is equivalent to whether the practice or policy is job related and consistent with a legitimate business necessity. An employment practice or policy may still be prohibited if necessary to achieve a substantial, legitimate, nondiscriminatory interest if a complainant shows there is a less discriminatory alternative that would achieve the same interest. (b) Nothing in this subchapter shall preclude affirmative efforts to utilize recruitment practices to attract an individual who is a member of an underrepresented or underserved member of a protected class covered by the Act. (c) This subchapter applies to the practices and policies of employers, labor organizations, employment agencies, and other covered entities.

The guidelines set forth in the Uniform Guidelines on Employee Selection Procedures, 29 CFR 1607 (1978), which are incorporated herein by reference, are applied to all protected characteristics listed in the Act. Where there is a conflict between such guidelines and this chapter, the rules in this chapter shall control. Upon request, the Division will make the guidelines available for public inspection and make available a printed copy of the guidelines.

(c) Any person claiming to be aggrieved by an unlawful employment practice or an unlawful discrimination, the Attorney General, the Director of the Division, the Commissioner of the Department of Labor and Workforce Development, or the Commissioner of the Department of Education, or any other person or organization authorized by the Division's Rules of Practice and Procedure, N.J.A.C. 13:4, or the LAD, may bring a complaint of discrimination based on disparate impact liability pursuant to the Act to the Division or initiate suit in Superior Court.