New York City Local Law 144 on Automated Employment Decision Tools

Overview

New York City Local Law 144 of 2021 regulates the use of automated employment decision tools (AEDTs) by employers and employment agencies operating in New York City. Enforcement began in July 2023. It is one of the first laws in the United States to require independent bias auditing of AI used in hiring, and it has become a reference point for AI-in-employment regulation.

The law responds to concern that algorithmic screening and ranking tools can replicate or amplify discrimination in employment, while operating opaquely. It focuses on transparency and bias measurement rather than banning the tools.

Who It Applies To

The law applies to employers and employment agencies that use an AEDT to screen candidates for employment or employees for promotion for a position located in New York City. An AEDT is a computational process derived from machine learning, statistical modeling, data analytics, or AI that substantially assists or replaces discretionary decision-making in hiring or promotion.

Key Requirements

Before use, an AEDT must undergo a bias audit conducted by an independent auditor within the prior year. The audit must calculate selection or scoring rates and impact ratios across sex, race/ethnicity, and intersectional categories. A summary of the most recent audit results and the distribution date must be published on the employer's website. Candidates and employees who reside in the city must receive notice at least ten business days before the tool is used, including the job qualifications and characteristics the tool assesses, and information on how to request an alternative process or accommodation.

Penalties for Non-Compliance

Violations are subject to civil penalties enforced by the city, with fines per violation and additional penalties for continuing violations, where each day of non-compliant use and each failure to provide required notice can constitute a separate violation. The law does not create a private right of action, though affected individuals may pursue other anti-discrimination remedies.

How to Comply

Employers should inventory hiring and promotion tools to identify AEDTs, commission an independent annual bias audit, and publish the required summary. Implement candidate notice workflows that meet the ten-day window and disclose assessed characteristics, and offer an accommodation or alternative process. Retain documentation of audits and notices to demonstrate compliance.