NYC Local Law 144: AI Hiring Tool Bias Audit Requirements
New York City became the first US jurisdiction to require bias audits for AI hiring tools. Local Law 144 has been in force since July 2023. Enforcement is active. Here is who must comply, what the audit requires, and what the fines look like.
Enforcement is active — $1,500/day per violation
Local Law 144 has been enforced since July 5, 2023. The NYC Department of Consumer and Worker Protection (DCWP) investigates complaints. Fines are $1,500 per day per affected applicant for first violations, $500 civil penalty for posting failures.
What Is Local Law 144?
New York City Local Law 144 of 2021 regulates the use of Automated Employment Decision Tools (AEDTs) — AI systems that substantially assist or replace discretionary human judgment in employment decisions. It passed in November 2021, was amended twice, and enforcement began July 2023.
The law applies to employers and employment agencies using AEDTs to screen candidates or employees in New York City. It requires independent bias audits, public posting of results, and notice to affected individuals.
What Is an AEDT?
The law defines AEDTs as computational processes derived from machine learning, statistical modelling, data analytics, or AI that are used to substantially assist or replace discretionary judgment in making employment decisions. Specifically:
AEDT — covered
- Resume screening tools that rank candidates
- Video interview AI that scores expressions, word choice, tone
- Personality or cognitive assessments with AI scoring
- Tools that generate a "hire/don't hire" recommendation
- Automated scoring of work samples or exercises
Not an AEDT — not covered
- Spreadsheets used to record interview notes (no ML)
- Job boards that let candidates filter by location (not employment decisions)
- Applicant tracking systems that only store data
- Background check providers (separate regulation)
- Tools that help write job descriptions without scoring candidates
Who Must Comply?
Any employer or employment agency that meets both conditions:
- 1.Uses an AEDT to screen candidates or employees for employment decisions
- 2.The position is in New York City (remote workers based in NYC are included)
A company headquartered in California using AI to screen NYC-based remote workers must comply. A company in NYC screening candidates for a London role does not need to comply with LL144 (though EU AI Act may apply instead).
Who bears the obligation: employer, not vendor
The obligation sits with the employer or employment agency using the AEDT — not the vendor who sold it. If you purchase an AI screening tool and use it for NYC candidates, you must ensure it has been audited. You cannot simply accept a vendor's claim that their tool is compliant. Verify that the audit meets NYC DCWP requirements.
What the Bias Audit Must Cover
The bias audit must be performed by an “independent auditor” — someone with no financial relationship with the employer or the AEDT vendor beyond the audit itself. The audit must analyze the impact of the AEDT on different groups.
Selection rate analysis
RequiredThe audit calculates the selection rate (percentage screened in vs. out) by sex category and race/ethnicity category. The auditor must use the most recent EEOC race/ethnicity categories.
Impact ratio calculation
RequiredThe impact ratio compares the selection rate of each group to the most-selected group (or the group with the highest selection rate). An impact ratio below 0.8 (the "4/5ths rule") indicates potential disparate impact.
Historical data or test data
RequiredThe audit must use historical data from actual use of the AEDT, or — if historical data is unavailable — a "test data set" that the auditor determines is representative. The data set must be described in the audit summary.
Published summary
Required — public postingThe audit summary must be posted on the employer's website at least 10 business days before the AEDT is used. It must include: the date of the audit, the auditor's name and contact info, the summary of results, and the source of data used.
Annual renewal
Required every yearThe bias audit must be redone at least annually. If the AEDT is materially changed, a new audit is required. Using an audit from 2024 for a 2026 hiring cycle without renewal is a violation.
Notice Requirements to Applicants
Employers must give applicants or employees notice before using an AEDT:
- Notice that an AEDT will be used and a description of the job qualifications or characteristics it will assess
- Instructions for requesting an accommodation if the candidate is unable to use the AEDT
- Timing: notice must be provided at least 10 business days before the AEDT is used (for NYC-based candidates in-scope)
- The notice can be in the job posting, on the company website, or via email
Penalties
| Violation | Penalty |
|---|---|
| Using AEDT without bias audit (first violation) | $1,500 per day |
| Using AEDT without bias audit (subsequent violations) | $1,500 per day + up to $500 additional civil penalty per affected candidate |
| Failure to post bias audit summary on website | $500 civil penalty |
| Failure to give applicant notice | $500 civil penalty |
NYC LL144 vs Colorado AI Act vs EU AI Act — employment coverage
Three separate laws can apply to the same AI hiring tool depending on where the candidate is:
NYC LL144
Candidates for NYC positions
Bias audit required
Colorado AI Act
Colorado residents
Risk assessment required
EU AI Act Annex III Cat.4
EU-based candidates
Conformity assessment required
Check if your hiring tools need a bias audit
ComplianceIQ identifies which of your AI hiring tools are AEDTs under NYC LL144, which jurisdictions apply, and what your audit needs to cover.