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North American Edition
22nd September 2022
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Concern about New York’s landmark AI bias law
New York City’s landmark mandate for audits of artificial intelligence systems used in hiring is posing some compliance challenges because, unlike familiar financial audits that have been refined over many years of accounting experience, the AI audit process is new and without clearly established guidelines. “There is a major concern, which is it’s not clear exactly what constitutes an AI audit,” observes Andrew Burt, managing partner at AI-focused law firm BNH. “If you are an organization that’s using some type of these tools . . . it can be pretty confusing.” The law, which comes into effect in January, will require local companies to conduct audits to assess biases, including along race and gender lines, in the AI systems they use in hiring. Nearly a quarter of companies’ human resources departments use automation, AI, or both to support HR activities, according to research that the Society for Human Resource Management published earlier this year. The number rises to 42% among companies with more than 5,000 employees. Lindsey Zuloaga, the chief data scientist at talent platform HireVue, which offers software that can automate interviews, warns that if companies aren’t careful, AI can “be very biased at scale. Which is scary.”
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Leading MBA programs add further workplace topics
Leading MBA programs from the likes of Columbia Business School and MIT’s Sloan School of Management have added further workplace topics to course catalogs that address issues from AI hiring software to hybrid work schedules. “Right now there’s so much disagreement and heat around this topic,” says Brian Lowery, a professor at Stanford’s Graduate School of Business. “A big part of this is to create a space for these conversations and to prepare our students to think about these issues, because they will make decisions that will affect a lot of people’s lives.”
PwC settles long-running pension lawsuit
PwC will pay $267m to settle a 16-year-old class action by retirees seeking higher pension benefits and challenging various aspects of the company’s pension plan. The deal, which is expected to pay an average of about $11,000 to each of 16,000 former participants in the PwC plan, is the largest recovery ever achieved in an Employee Retirement Income Security Act case challenging a pension calculation known as a “whipsaw,” plaintiff Timothy D. Laurent said in a settlement motion filed Monday. The PwC retirees’ suit challenged various aspects of their pension plan, including its stated retirement age and the interest rate used to calculate certain distributions. In particular, they claim PwC shorted their benefits by using faulty interest rates and normal retirement dates when performing whipsaw calculations, in which the value of workers’ pension benefits are projected forward to retirement age and then backward to the time of distribution.
False accuser of Black bird-watcher loses lawsuit against ex-employer
Amy Cooper, a white woman who falsely told police she was threatened by a Black bird-watcher in New York City's Central Park, has lost a lawsuit against her former employers.  A video of the incident went viral. She accused investment firm Franklin Templeton of illegally firing her and portraying her as racist. U.S. District Judge Ronnie Abrams rejected Cooper's claim that she was defamed when Franklin Templeton and its CEO referred on three occasions to the incident and said they did not tolerate racism.  The judge also said Cooper had not proved she was dismissed in May 2020 because of her race or gender, and without the kind of thorough investigation once done into a male employee's alleged offensive conduct.
Chipotle to pay $7.7m to New Jersey over child labor law violations
Chipotle Mexican Grill will pay New Jersey $7.7m to settle “alleged widespread and persistent violations” of the state’s child labor laws, the state said Tuesday. The settlement comes after a 2020 Labor Department audit that found approximately 30,660 alleged violations related to minors working at Chipotle locations across New Jersey, the state said. The alleged violations included minors working too many hours and not getting “timely and sufficient” meal breaks. As part of the settlement, Chipotle has agreed to a long-term plan to ensure compliance. It includes self-audits, a designated compliance official and mandatory training.
Home Depot workers begin union drive
Home Depot workers at a store in Philadelphia have filed a petition with the National Labor Relations Board (NLRB) to form what could be the first store-wide union at the world's largest home improvement retailer. The petition seeks to form a collective bargaining unit for 274 employees who work in merchandising, specialty and operations. Home Depot spokesperson Sara Gorman said the firm is "aware" of the petition filed with the NLRB and "look[s] forward to talking to our associates about their concerns".
Better work-life balance for bankers could be another ‘mommy track’
The FT’s Brooke Masters is skeptical about Citigroup’s new hub in the Spanish city of Málaga for junior investment bankers who fret about work-life balance. Participants could be stigmatized as “unserious.”
Walmart to hire 40,000 workers for holiday season
Walmart is hiring 40,000 seasonal and full-time workers ahead of this year's holiday season - a significant drop on the 150,000 store workers it aimed to recruit this time last year. The company said on Wednesday that it is in a stronger staffing position heading into the holidays than last year and is now focusing on hiring only seasonal workers, rather than permanent workers. As in past years, the company will first offer current workers the opportunity to pick up additional shifts. This year’s hiring plan signals less need for extra manpower as U.S. consumers contend with the highest inflation in four decades. 
Saudi’s PIF plans New York trading team for U.S. unit
USSA International, the U.S. unit of the Public Investment Fund (PIF), Saudi Arabia’s $620bn sovereign wealth fund, is planning to add about 50 staff for its New York office, as it expands its investments in the U.S. The subsidiary will recruit for roles including investment research, legal and compliance, and also a chief of staff, say people with knowledge of the matter. It will also build a team for equity trading at a later stage, the people said. PIF manages a roughly $40bn portfolio of U.S. equities, including holdings in BlackRock, JPMorgan, and Uber, according to a filing. Earlier this year, the fund invested more than $7bn to build new positions in U.S. stocks as markets were hit by recession fears.
U.S. bank chiefs warn of China exit if Taiwan is attacked
The CEOs of major U.S. banks including JPMorgan Chase, Bank of America and Citigroup said they will pull out of China if the U.S. government called for it in the event of an attack on Taiwan by Beijing. They made the pledge during an appearance in front of Congress when Republican congressman Blaine Luetkemeyer asked how they would respond were China to invade Taiwan. The bank chiefs also endorsed the Federal Reserve’s latest rate hike as a means to tame soaring inflation, while acknowledging there will be pain ahead.
Employers are being ghosted in red-hot German job market
Candidates in Germany’s job market have begun disappearing during the hiring process, according to an August poll of 400 recruiters by employment website Indeed. More than half (56%) of respondents to Indeed’s survey said the trend has gained momentum in the last year. A quarter say it happens at least once a week and almost one in 10 loses contact with a job seeker every day. Male applicants vanish most frequently, according to the poll, which underscores the challenges posed by the shortage of labor. “Applicants often have the choice between several good options, just like companies used to, and don’t follow through on every application process consistently to the end,” said Tim Verhoeven, a recruiting expert at Indeed.
Indian IT firm fires 300 workers for moonlighting
Indian IT services firm Wipro has sacked 300 employees for moonlighting. Wipro chairman Rishad Premji said the company has no place for any staffer who chooses to work directly with rivals while being on Wipro payrolls. Moonlighting is a "complete violation of integrity in its deepest form," he said. "The reality is that there are people today working for Wipro and working directly for one of our competitors and we have actually discovered 300 people in the last few months who are doing exactly that." Last month, he tweeted: "There is a lot of chatter about people moonlighting in the tech industry. This is cheating - plain and simple."
Glovo fined for not formally hiring riders
Delivery Hero’s Spanish business Glovo has been fined by Spain’s labor ministry for violating a law which requires food delivery companies to formally hire riders. Unidentified sources said the fine was €79m ($78m), according to a report on local radio station Cadena SER. In 2021, Spain passed legislation requiring that riders for food delivery platforms be employees, not freelancers, and signed to formal labor contracts.
PepsiCo ends Pepsi, 7UP production in Russia
PepsiCo has stopped making Pepsi, 7UP and Mountain Dew in Russia, nearly six months after the U.S. company said it would suspend sales and production after Moscow sent tens of thousands of troops into Ukraine. The company has operated in Russia for more than 60 years and its colas were one of the few Western products allowed in the Soviet Union prior to its collapse.
Number of millionaires expected to grow 40% by 2026
The number of millionaires globally will grow by 40% in the next five years, and by 2026, there will be more than 87.5 million people with at least $1m in wealth, up from 62.5 million in 2021, according to Credit Suisse’s Global Wealth Report 2022. The number of dollar millionaires will grow faster in emerging economies, the lender’s forecasts show. The 500 richest people in the world have lost $1.4 trillion in cumulative fortune in the first half of the year, but Credit Suisse anticipates a fast recovery, especially for developing markets, and it expects China to continue creating massive wealth even as its economy shows signs of strain amid Covid lockdowns and regulatory crackdowns. “Despite the inflation and Russia-Ukraine war setbacks, we believe that total global wealth will continue to grow,” the report said. “We expect household wealth in China to continue to catch up with the United States, advancing the equivalent of 14 U.S. years between 2021 and 2026.” Credit Suisse forecasts private fortunes will grow 36% to $169 trillion by 2026, with wealth per adult climbing 28% globally and surpassing $100,000 in 2024. The number of ultra-high net-worth individuals, or those with more than $50m, will reach 385,000, the report says.

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