New York City Local Law 144 of 2021 – Automated Employment Decision Tools

NYC Local Law 144 (AEDT) · New York City Council; administered by the New York City Department of Consumer and Worker Protection (DCWP)

Requires employers and employment agencies using automated employment decision tools (AEDTs) in New York City hiring or promotion decisions to conduct annual bias audits, publish audit results, and notify candidates prior to use.

Overview

New York City Local Law 144 of 2021, commonly referenced in enterprise compliance contexts as the Automated Employment Decision Tools law, governs the use of algorithmic systems that substantially assist or replace discretionary decision-making in hiring and promotion processes within New York City. The law was enacted on 1 November 2021 and, following a series of enforcement delays tied to rulemaking, became enforceable on 5 July 2023 under final rules published by the DCWP. The legislation responds to documented concerns that machine-learning and algorithmic screening tools can encode or amplify discriminatory patterns along lines of race, ethnicity, sex, and other protected characteristics. Under Local Law 144, covered employers and employment agencies must commission an independent bias audit of any AEDT used for New York City residents before deployment and at least annually thereafter. Audit results, including scoring rate data disaggregated by sex, race, and ethnicity, must be publicly posted on the employer's website. Candidates and employees subject to AEDT screening must receive advance notice of that fact, information about the type of data the tool uses, and an opportunity to request an alternative selection process or accommodation. Civil penalties apply per violation, with each day of non-compliance constituting a separate violation. The DCWP retains authority to issue subpoenas and conduct investigations.

Key Requirements

•Commission an independent bias audit of each AEDT before first use and at minimum annually thereafter.
•Ensure the bias audit is performed by an independent auditor as defined by DCWP rules; employers may not conduct their own audits.
•Publish a summary of the bias audit results, including impact ratio data disaggregated by sex and race/ethnicity categories, on a publicly accessible company webpage.
•Retain audit results on the public webpage for at least the duration of use of the AEDT plus an additional six months after discontinuation.
•Provide written notice to New York City-based job candidates or employees at least ten business days before the AEDT is used to evaluate them.
•Notice must state that an AEDT will be used, describe the job qualifications or characteristics the tool evaluates, and include a link to the published bias audit summary.
•Provide candidates the ability to request an alternative selection process or reasonable accommodation where such alternatives exist.
•Comply with civil penalty provisions: USD 375 to USD 1,500 per violation per day.
•Maintain records sufficient to demonstrate compliance upon DCWP inquiry.

Who It Affects

Employers with one or more employees operating in New York City who use AEDTs in hiring or promotion decisions affecting NYC-based candidates or employees.Employment agencies operating in New York City that use AEDTs on behalf of client employers.HR technology vendors supplying AEDT products to covered employers (indirect compliance dependency; audit obligations rest with the employer/agency).Third-party independent auditors seeking to offer bias audit services to covered entities.

Effective Date

2023-07-05

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