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

Applies To

Overview

New York City Local Law 144 of 2021, often called the Automated Employment Decision Tools law, governs software that substantially assists or replaces human decisions in hiring and promotion in New York City. The City Council passed it on 10 November 2021, and it became law in December 2021 without the Mayor's signature. It took effect on 1 January 2023, and the Department of Consumer and Worker Protection (DCWP) began enforcing it on 5 July 2023. The law responds to documented concerns that automated screening tools, including those that learn from past data, can repeat or amplify discrimination by race, ethnicity, sex, and other protected characteristics. Under Local Law 144, covered employers and employment agencies must commission an independent bias audit of any automated employment decision tool (AEDT) used for jobs located in New York City before first use and at least annually thereafter. Audit results, including scoring rate data broken down 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 every hiring or promotion tool that screens candidates for jobs located in New York City.
• →Engage an independent auditor with no financial or employment tie to you or the tool vendor.
• →Schedule bias audits before first use of each tool and at least once every year.
• →Publish the audit summary, including impact ratio data by sex and race or ethnicity, on your website.
• →Send written notice to candidates at least ten business days before the tool evaluates them.
• →Keep records showing audits, notices and publication dates, ready for Department of Consumer and Worker Protection inquiries.

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?

It depends on where the job is, not where the candidate lives. Per DCWP guidance, the law covers jobs located in New York City at least part of the time, or remote jobs tied to a New York City office. A city resident applying for a job elsewhere is not covered.

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.