Key Facts

Key Facts

• Effective Date: July 5, 2023 (already in effect)
• Enforced By: NYC Department of Consumer and Worker Protection (DCWP)
• Applies To: Employers and employment agencies using AEDTs in NYC
• Penalties: $500-$1,500 per violation

New York City Local Law 144 was one of the first laws in the United States to specifically regulate AI in hiring. If you use automated tools to screen candidates or employees in NYC, this law imposes strict bias audit and disclosure requirements that are already in effect.

Compliance Notice
This guide provides general information about NYC Local Law 144 compliance. It does not constitute legal advice. Consult qualified employment counsel for questions specific to your organization.

What is an AEDT?

An Automated Employment Decision Tool (AEDT) is any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues a simplified output (score, classification, recommendation) to substantially assist or replace discretionary decision-making for employment decisions.

Key Definition: "Substantially Assist"
An AEDT "substantially assists" a decision when it's used to: (1) overweight or change the weight of certain criteria, (2) replace or modify human discretionary decisions, or (3) is used as one of a set of criteria where the recommendation is given significant weight. Resume screening tools, video interview AI, and candidate ranking systems typically qualify.

Examples of AEDTs

• Resume screening software that ranks or scores candidates
• Video interview platforms that analyze responses, tone, or expressions
• Chatbots that screen candidates and make advancement recommendations
• Skills assessment tools with AI-powered scoring
• ATS features that automatically filter or prioritize applications

What's NOT an AEDT

• Simple keyword searches without machine learning
• Basic yes/no eligibility filters (e.g., work authorization)
• Calendar scheduling tools
• Communication platforms without analytical features

Requirements Overview

1. Independent Bias Audit

Before using an AEDT, employers must have it audited by an independent auditor. The audit must:

• Be conducted within the past year (audits must be annual)
• Analyze the AEDT's selection or scoring rates by sex, race/ethnicity categories
• Calculate impact ratios comparing outcomes across demographic groups
• Be conducted by an entity that exercises objective, impartial judgment

2. Public Disclosure (Website Posting)

You are required to publish a summary of the bias audit on your website. The summary must include:

• The date of the most recent bias audit
• The distribution date of the AEDT (when it was provided to you)
• The selection rates and impact ratios for all categories
• For each category, the number of individuals assessed

Historical Data Requirements
If you've used the AEDT on NYC residents/applicants, the audit should use your actual historical data. If you haven't (new tool or new to NYC), you may use the vendor's test data or data from other employers. Document which data source you're using.

3. Candidate Notice

You must notify candidates residing in NYC at least 10 business days before the AEDT is used on them. The notice must include:

• That an AEDT will be used
• What job qualifications and characteristics the AEDT will assess
• Information about the data sources (what data the AEDT uses)
• Instructions for requesting an alternative selection process or accommodation (if available)

Notice Delivery Methods

The notice can be provided via:

• Email or written correspondence
• The job posting itself
• A conspicuous and clear link in the job posting

Bias Audit Requirements in Detail

What Must Be Tested

The audit must calculate impact ratios for:

• Sex categories: Male, Female, Unknown
• Race/Ethnicity categories: Hispanic/Latino, White, Black/African American, Native Hawaiian/Pacific Islander, Asian, Native American/Alaska Native, Two or More Races
• Intersectional categories: Sex combined with race/ethnicity

Impact Ratio Calculation

For each category, the impact ratio is calculated as:

Impact Ratio = Selection Rate for Category ÷ Selection Rate for Most Selected Category

A ratio below 0.8 (the "four-fifths rule") may indicate adverse impact, though the law doesn't specify a threshold. You should monitor low ratios and document explanations.

Who Can Conduct Audits?

The auditor must be independent—meaning they exercise objective, impartial judgment on all issues within their scope. Your AEDT vendor cannot audit their own tool. Many employers use third-party firms specializing in AI bias auditing or employment testing validation.

Step-by-Step Compliance Checklist

Initial Setup (Before Using AEDT)

• ☐ Identify all AEDTs used in hiring NYC candidates
• ☐ Contact vendors to obtain bias audit (or commission independent audit)
• ☐ Review audit results for adverse impact indicators
• ☐ Create public summary document from audit results
• ☐ Post summary on career site/company website
• ☐ Create candidate notification language
• ☐ Integrate notice into application process

Ongoing Compliance

• ☐ Provide notice to all NYC candidates 10+ business days before AEDT use
• ☐ Track that notices were delivered
• ☐ Conduct new bias audit annually
• ☐ Update public summary after each audit
• ☐ Re-audit if AEDT is significantly modified
• ☐ Monitor for enforcement updates from DCWP

Sample Candidate Notice

Notice of Use of Automated Employment Decision Tool

[Company Name] uses an automated employment decision tool (AEDT) to assist in evaluating candidates for this position. The tool analyzes your application materials to assess:

- Relevant work experience and skills match
- Educational background alignment
- Qualifications for the role

Data Sources: The AEDT analyzes information you provide in your resume and application. No external data sources are used.

Bias Audit: A summary of our most recent independent bias audit is available at [link to audit summary].

Alternative Process: If you wish to request an alternative selection process or a reasonable accommodation, please contact [HR contact information].

Penalties and Enforcement

The NYC Department of Consumer and Worker Protection (DCWP) enforces Local Law 144:

• First violation: $500 civil penalty
• Subsequent violations: $500-$1,500 per violation
• Each day of use without a bias audit counts as a separate violation
• Each candidate not notified counts as a separate violation

Violation Math
If you've been using an AEDT without an audit for 90 days, that's potentially 90 violations ($45,000-$135,000). If you processed 500 NYC candidates without notice during that time, add another 500 violations ($250,000-$750,000). Compliance is far cheaper than penalties.

LL144 Compliance: DIY vs. Software vs. Consultants

Employers have three main options for achieving NYC Local Law 144 compliance. Each approach has trade-offs in cost, speed, and ongoing maintenance:

Note: EmployArmor is not a substitute for legal advice. For complex compliance scenarios or litigation risk, consult qualified employment counsel. Our platform helps you implement and maintain compliance processes but does not replace attorney judgment.

Frequently Asked Questions

What is NYC Local Law 144?

NYC Local Law 144 is New York City's pioneering law regulating automated employment decision tools (AEDTs) in hiring and promotion. Effective July 5, 2023, it requires employers and employment agencies using AEDTs in NYC to: (1) conduct annual independent bias audits, (2) publicly post audit results on their website, (3) notify candidates at least 10 business days before using the AEDT, and (4) provide alternative selection processes upon request. The law is enforced by NYC Department of Consumer and Worker Protection (DCWP) with penalties of $500-$1,500 per violation.

Who does Local Law 144 apply to?

LL144 applies to any employer or employment agency using AEDTs to evaluate candidates residing in NYC or for NYC-based positions. This includes: resume screening software, video interview AI, candidate ranking systems, skills assessment tools with automated scoring, and ATS features that filter or prioritize applications using AI/algorithms. Even if your company is based outside NYC, if you evaluate NYC candidates with AEDTs, employers are generally required to comply. Check your compliance status.

What counts as an Automated Employment Decision Tool (AEDT)?

An AEDT is any computational process derived from machine learning, statistical modeling, data analytics, or AI that issues simplified outputs (scores, classifications, recommendations) to substantially assist or replace discretionary hiring decisions. 'Substantially assist' means the AEDT: overweights certain criteria, replaces human discretion, or is given significant weight alongside other factors. Simple keyword searches, eligibility filters (work authorization), and non-analytical tools (calendar scheduling) are NOT AEDTs. Video interview analysis, resume screeners, and candidate ranking systems typically ARE AEDTs.

How often do I need to conduct bias audits under Local Law 144?

Annual bias audits are required—meaning within 12 months of your prior audit. The audit must be conducted by an independent auditor (not your AEDT vendor or employees) and must analyze selection rates by sex, race/ethnicity categories, calculating impact ratios for each group. If your AEDT is significantly modified (algorithm updates, new features, different use case), you must conduct a new audit before continuing to use it. Set calendar reminders to commission new audits 30-60 days before your current audit expires to avoid gaps.

What happens if my bias audit shows adverse impact?

The law doesn't prohibit using AEDTs with adverse impact—it requires transparency. You must still publish the audit results showing the disparate impact. However, adverse impact creates liability risk under other laws (Title VII, EEOC guidance, NYSHRL). Options: (1) stop using the tool, (2) work with your vendor to modify the algorithm to reduce disparate impact, (3) demonstrate job-relatedness and business necessity (requires validation study), or (4) accept the legal risk. Many employers discovering adverse impact in audits choose option 1 or 2. Consult employment counsel before continuing to use a tool with significant adverse impact.

Do I need to provide the 10-day notice for internal promotions?

Yes. Local Law 144 explicitly covers 'promotion or selection for hire,' meaning internal candidates being evaluated for promotions must receive the same 10-business-day advance notice as external applicants. Many employers mistakenly assume internal moves have different rules—they don't. If you're using an AEDT to evaluate internal candidates for new roles, full LL144 compliance (audit, public posting, notice, alternative process) applies. Internal candidates may actually have more knowledge of your processes and greater access to evidence for potential discrimination claims.

What are the penalties for violating NYC Local Law 144?

NYC DCWP can impose civil penalties of $500 for first violations and $500-$1,500 for subsequent violations. Each day of non-compliance counts as a separate violation. Example: using an AEDT without a bias audit for 90 days = 90 violations ($45,000-$135,000). Processing 500 NYC candidates without proper notice = 500 additional violations ($250,000-$750,000). Beyond fines, DCWP can require corrective action and publishes enforcement actions publicly, creating reputational risk. Private lawsuits under general discrimination laws are also possible if the AEDT produces discriminatory outcomes. Assess your compliance risk now.

What happens if an employer misses the annual bias audit deadline?

Missing the annual audit deadline means every day you continue using the AEDT without a current audit counts as a separate violation—potentially $500-$1,500 per day. If you realize your audit has lapsed, stop using the AEDT immediately or commission an emergency audit as quickly as possible. Document your remediation steps, as proactive corrective action may be considered favorably in enforcement proceedings. Ongoing use without a valid audit significantly multiplies penalty exposure. Check if your audit is still valid.

Does NYC Local Law 144 apply to promotional decisions, not just external hiring?

Yes. The law explicitly covers both 'selection for hire' and 'promotion.' Any AEDT used to evaluate existing employees for internal advancement—whether a lateral transfer, promotion, or role change—must comply with the same requirements as external hiring: a current bias audit, public disclosure, 10-business-day advance notice to the employee, and an alternative process upon request. Employers frequently overlook the promotional dimension, which can create significant unnoticed liability in large organizations with active internal mobility programs.

How should employers handle third-party AI vendors under Local Law 144?

Employers—not vendors—bear primary legal responsibility for LL144 compliance. If your ATS, video interviewing platform, or skills assessment tool uses AI, you must: (1) verify the vendor has obtained or can facilitate an independent bias audit meeting DCWP's requirements, (2) ensure audit results are publicly posted on your website (not just the vendor's), and (3) integrate vendor-provided notice language into your candidate communications on schedule. Vet new vendors before deployment by requiring proof of audit-readiness. See our AI Vendor Assessment Guide for a due-diligence checklist.

Additional Questions

Does this apply to remote positions?

If you're evaluating candidates who reside in NYC, or for positions based in NYC, the law likely applies. The safest approach is to comply for any role that might attract NYC applicants.

Can my vendor provide the bias audit?

The vendor cannot audit their own tool. However, many vendors work with third-party auditors and can provide audit results. Review the audit to ensure it meets NYC requirements and was conducted by an independent party.

What if my AEDT shows adverse impact?

The law doesn't prohibit using an AEDT with adverse impact—it requires transparency. However, adverse impact may create liability under other employment discrimination laws. Consider working with your vendor to improve the tool or implementing additional safeguards.

Do I need a new audit every year?

Yes. The bias audit must have been conducted within one year of using the AEDT. Set a calendar reminder to commission a new audit before your current one expires.

What's the penalty for not providing the required 10-day notice?

The NYC Department of Consumer and Worker Protection (DCWP) can impose civil penalties of $500 for first violations and up to $1,500 for subsequent violations, assessed per affected candidate. For high-volume hiring, this adds up fast: if you screen 1,000 NYC candidates without proper notice, you're looking at $500,000 minimum exposure. In addition to fines, DCWP can require corrective action (retroactive notices, process changes) and publish enforcement actions, creating reputational risk. Private lawsuits are also possible under general employment discrimination statutes if the AEDT produces discriminatory outcomes and you failed to follow LL144's bias audit requirements.

If our AEDT is only used by one person in our HR team, do we still need to comply?

Yes. LL144 applies to any use of AEDTs in hiring, regardless of how many employees use the tool. Even if only your TA Director uses an AI resume screening tool, full compliance (bias audit, disclosure, public posting) is required. The law focuses on the impact on candidates, not your internal staffing. A common misconception is that "limited use" exempts employers—it doesn't.

Can we satisfy the disclosure requirement by including LL144 language in our general privacy policy?

No. The law requires that candidates be notified "at least ten business days before use of the AEDT." Burying this in a privacy policy that candidates might read months before (or after) the AEDT is used doesn't meet the timing requirement. You must provide specific, timely notice tied to when the AEDT will actually be applied to their candidacy. Best practice: send a dedicated disclosure email when scheduling AI-powered assessments or before applying AI screening tools to their application. Document the delivery date to prove 10-day compliance. See our disclosure templates for compliant notice examples.

Official Resources & Citations

• NYC DCWP: Automated Employment Decision Tools Official Page
• NYC Administrative Code § 20-871: Full Text of Local Law 144

Related Resources

• NYC Compliance Page
• What Counts as AI in Hiring?
• Vendor Assessment Guide
• AI Disclosure Notice Template
• AI Hiring Compliance Guide 2026
• How to Conduct an AI Bias Audit
• Free Compliance Scorecard
• Does Indeed Trigger NYC Local Law 144?
• EEOC vs. NYC vs. Colorado AI Hiring Compliance Comparison
• EEOC AI Hiring Guidance 2026

Last updated: March 2026

Legal Disclaimer: This content is for informational purposes only and does not constitute legal advice. Laws and regulations change frequently, and compliance depends on your specific circumstances. Always consult with qualified employment law counsel before taking action. EmployArmor provides tools to assist with compliance but is not a law firm.

Quick Reference:

• What software do employers use for NYC Local Law 144 compliance?
• NYC Local Law 144 employer requirements explained