The NYC Local Law 144 Bias Audit, Walked Step-by-Step

New York City Local Law 144 requires employers and employment agencies that use Automated Employment Decision Tools (AEDTs) in hiring or promotion decisions to conduct annual bias audits. The results must be published publicly. Enforcement has been active since 2023.

Here’s how the audit actually works.

What Triggers the Requirement

You need a bias audit if you:

• Use an AEDT to screen candidates or employees for jobs located in NYC, OR
• Use an AEDT to rank or score candidates for NYC positions

An AEDT is any computational process derived from machine learning, statistical modeling, data analytics, or AI that issues simplified output (score, classification, recommendation) that is used to make or substantially assist in hiring or promotion decisions.

Common examples: Resume screening tools that score and filter applicants; interview AI that evaluates video interviews; skills assessments with AI scoring.

Not covered: Human-conducted interviews, applicant tracking systems that don’t score or filter, reference checks.

Finding a Qualified Auditor

The AEDT must be audited by an “independent auditor”. The DCWP rules don’t specify a certification, but the auditor must:

• Have no financial interest in the employer, employment agency, or AEDT vendor
• Have relevant expertise in algorithmic systems and bias testing

In practice, auditors are typically:

• Boutique AI audit firms (ORCAA, BABL AI, and similar)
• Large consulting firms with AI audit practices
• Academic teams with relevant expertise

Expect 3-6 months lead time for reputable auditors. Demand has outpaced supply.

What the Auditor Will Need From You

Before the audit begins, prepare to provide:

Historical data: 12 months (minimum) of decisions made by the AEDT, with demographic information (sex/gender, race/ethnicity) for each applicant/candidate. This is the most common compliance gap — many employers don’t collect this data.

If you don’t have historical data: The rules allow testing with a sample of candidates if historical data is unavailable. Work with your auditor on methodology.

System documentation: How the AEDT works, what inputs it uses, how outputs are generated. Request this from your vendor.

Scope definition: Which positions, which use cases, which time period.

What the Auditor Tests

The bias audit must calculate — at minimum — the selection rate for each sex/gender and race/ethnicity category compared to the most selected group.

Selection rate = number selected by AEDT / number of individuals assessed

The audit calculates the impact ratio for each group = group selection rate / highest selection rate

If any group has an impact ratio below 0.80 (the 4/5ths rule from federal EEOC guidance), that’s a finding. The AEDT is selecting members of that group at a substantially lower rate than the most selected group.

Impact ratios below 0.80 don’t automatically mean the tool is illegal — but they require explanation and may require remediation.

The auditor will document:

• Impact ratios for all sex/gender categories
• Impact ratios for all race/ethnicity categories (and intersectional categories where data permits)
• Scoring rate distributions where applicable (for scoring rather than binary selection tools)
• Methodology used

After the Audit: Publication Requirements

Within 90 days of conducting the audit, employers must publish on their website:

• The bias audit summary (not necessarily the full report)
• The date the AEDT was last audited
• The number of individuals assessed
• Impact ratios by category

The summary must be on a publicly accessible page, not behind a login.

Also: Before using an AEDT to evaluate a candidate in NYC, you must notify that candidate at least 10 business days in advance that an AEDT will be used, what the AEDT is assessing, and how to request an alternative selection process or reasonable accommodation.

Annual Cadence

Audits must be conducted annually. The DCWP interprets “annually” as within the prior 12 months. If you’ve been using an AEDT for a while without auditing it, you should audit immediately.

If you update the AEDT significantly, consider whether a new audit is warranted even if you’ve done one recently.

Penalties and Enforcement

Violations are $1,500 per day per violation. Enforcement is by the NYC Department of Consumer and Worker Protection. The first enforcement actions were taken in 2025.

A “violation” can mean: using an unaudited AEDT, failing to publish results, or failing to provide required notices to candidates. Each day of continued violation is a separate violation.

The Compliance Checklist

• [ ] Identify all AEDTs used in NYC hiring or promotion decisions
• [ ] Engage an independent auditor (allow 3-6 months)
• [ ] Collect historical applicant data with demographic information
• [ ] Complete the bias audit
• [ ] Publish summary on your website
• [ ] Set up candidate notification process (10 business days before AEDT use)
• [ ] Set calendar reminder for annual re-audit