What is automated decision-making technology?
Automated decision-making technology, often shortened to ADMT, is software that makes or substantially shapes decisions about people, such as screening job applicants, approving credit or setting service eligibility, with limited human involvement.
The term comes up mostly in privacy and AI regulation. California privacy regulators have written rules specifically about ADMT, and Colorado's AI Act focuses on high-risk AI systems used in consequential decisions about consumers, such as employment, housing, lending, insurance and health care. The details and dates differ by state and keep changing, so check with counsel for your situation.
For a typical service business, the most likely place to meet ADMT is hiring. Applicant tracking systems that rank or reject resumes automatically, or tenant screening tools in property management, can count. The question is not only whether software is involved, but whether its output effectively decides the outcome or a person genuinely weighs it alongside other information.
A sensible approach is to list any tools that score, rank, filter or approve people, ask vendors how their models work and how they are tested for bias, and keep a person making the final call with real authority to disagree. Document that review. If you cannot explain why the tool reached its result, think hard before letting it decide.
Example
For example, a staffing firm using an applicant tracking system with automatic resume ranking might configure it to sort candidates without rejecting anyone automatically. A recruiter reviews every application and notes the reason for each decision, and the firm asks the vendor for documentation on how the ranking model was tested before renewing the contract.