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

Applies To

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.

What Your Organization Must Do

• →Inventory all automated tools used in hiring or promotion decisions affecting NYC-based candidates or employees, and classify each as an AEDT under DCWP definitions before deploying or continuing use; assign a named HR compliance owner for each tool.
• →Contract with a qualified independent auditor (not affiliated with your organization or the tool vendor) to complete a bias audit for each active AEDT, and schedule recurring annual audits on a fixed calendar cycle to avoid gaps in coverage.
• →Publish bias audit summaries on a publicly accessible company webpage, including impact ratio data disaggregated by sex and race/ethnicity, within the timeframe required before or immediately upon deployment, and retain each summary for the full period of tool use plus six months after discontinuation.
• →Build a candidate notification workflow that delivers written notice at least ten business days before any AEDT evaluation occurs, including the tool description, the job qualifications or characteristics assessed, a direct link to the published audit summary, and instructions for requesting an alternative selection process or accommodation.
• →Establish a compliance recordkeeping system that documents audit commissioning dates, auditor independence credentials, publication timestamps, and candidate notices, ensuring records are retrievable promptly in response to a DCWP subpoena or inquiry.
• →Review vendor contracts for all AEDT suppliers to confirm data access and cooperation rights needed to complete independent audits, and negotiate audit-support obligations into any new or renewed agreements to prevent delays that could trigger per-day penalties of up to USD 1,500 per violation.

Playbook Guidance

Step-by-step implementation guidance for compliance teams.

Frequently Asked Questions

Does NYC Local Law 144 apply to employers headquartered outside New York City?

Yes. The law applies to any employer or employment agency, regardless of where it is headquartered, that uses an AEDT to screen New York City-based candidates or employees for hiring or promotion decisions. Physical presence in NYC is not required; the geographic nexus is the location of the affected worker.

What qualifies as an automated employment decision tool under Local Law 144?

An AEDT is a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that substantially assists or substitutes for discretionary decision-making in screening candidates or employees for hiring or promotion. Tools that merely automate scheduling or document collection without influencing selection decisions are generally outside scope.

Who is permitted to conduct the bias audit required by NYC Local Law 144?

The audit must be performed by an independent auditor with no employment or financial relationship with the employer or the AEDT vendor. Self-audits are explicitly prohibited under DCWP rules. Employers should vet auditor independence credentials before engagement and document that independence in their compliance records.

What are the civil penalties for non-compliance with NYC Local Law 144?

The DCWP can impose fines of USD 375 to USD 1,500 per violation per day. Because each day of non-compliance constitutes a separate violation, penalties can accumulate rapidly across multiple tools or candidate populations if notice, audit, or publication obligations are not met on schedule.

How far in advance must employers notify candidates before using an AEDT under Local Law 144?

Written notice must be provided at least ten business days before the AEDT is used to evaluate the candidate. The notice must identify the tool, describe the job qualifications or characteristics it assesses, link to the published bias audit summary, and explain how to request an alternative selection process or accommodation.

How does NYC Local Law 144 compare to Illinois and Maryland automated hiring laws?

Illinois's AI Video Interview Act requires disclosure and consent before AI-analyzed video interviews but does not mandate bias audits. Maryland's law requires pre-use consent for facial recognition in interviews. NYC Local Law 144 is broader in scope, imposing mandatory independent audits, public disclosure of disaggregated impact ratio data, and recurring annual audit obligations that neither Illinois nor Maryland require.