NYC Local Law 144.

Overview

NYC Local Law 144 of 2021, signed on December 11, 2021 and effective as of July 5, 2023, is the first US law to mandate independent bias audits of AI-powered hiring and promotion tools. The law targets automated employment decision tools (AEDTs) — AI systems that help employers screen job candidates or evaluate current employees for promotion opportunities in New York City.

The law was motivated by growing evidence that algorithmic hiring tools can perpetuate and amplify racial, gender, and other forms of discrimination at scale. NYC Local Law 144 addresses this by requiring:

1. An annual independent bias audit before using an AEDT
2. Public disclosure of audit results on the employer's website
3. Advance notice to candidates and employees that an AEDT will be used

The NYC Department of Consumer and Worker Protection (DCWP) issued final implementing rules in April 2023, which clarified key definitions and set audit methodology standards.

2026 enforcement update: On December 2, 2025, the New York State Comptroller published an audit concluding that DCWP's enforcement of Local Law 144 has been "ineffective." Employment counsel (e.g., DLA Piper, January 2026) are warning employers to expect a new phase of stricter enforcement, more frequent investigations, and higher penalties. See Penalties & Enforcement below for details.

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Who It Applies To

NYC Local Law 144 applies to:

• Employers that use an AEDT to screen candidates for employment in NYC, or
• Employers that use an AEDT to screen current employees for promotion opportunities in NYC, or
• Employment agencies that use an AEDT on behalf of such employers

Geographic Scope

The law applies when the candidate or employee is located in New York City at the time of the screening — not where the employer is based. A San Francisco employer using an AI resume screener to evaluate NYC-based applicants must comply.

No Revenue or Size Threshold

There is no minimum number of employees, annual revenue threshold, or industry carve-out. Any employer that uses a qualifying AEDT for NYC-located applicants or employees is in scope.

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What Is an AEDT?

An Automated Employment Decision Tool is defined as any computational process — derived from machine learning, statistical modeling, data analytics, or artificial intelligence — that issues a simplified output (including a score, classification, or recommendation) that is used to substantially assist or replace discretionary decision-making in hiring or promotion.

Key Phrase: "Substantially Assist or Replace"

DCWP's final rules clarify that a tool "substantially assists or replaces" decision-making when:

• It is the only assessment used
• It overrides an assessment of another criterion, or
• It is weighted more heavily than all other criteria combined

What Is NOT an AEDT?

The law does not cover:

• Tools that solely automate administrative tasks (scheduling, document collection)
• AI used in the assessment process that does not produce a simplified output affecting selection decisions
• Manual rule-based systems without machine learning components (e.g., simple keyword filters)
• Tools used only after a human interviewer has already assessed a candidate

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Bias Audit Requirements

Who May Conduct the Audit?

The bias audit must be conducted by an independent auditor — a person or organization not employed by or affiliated with the employer or AEDT vendor. The auditor must assess impact across the following categories:

• Race/ethnicity (as defined by the EEOC)
• Sex (including gender categories recognized by the EEOC)
• Intersectional categories are permitted but not required

What the Audit Must Calculate

The bias audit must compute:

An impact ratio below 0.80 (the "four-fifths rule" from EEOC Guidelines) generally indicates adverse impact — though the auditor may also use statistical significance tests.

Data Requirements

The audit must use historical data from actual use of the AEDT in employment decisions. If insufficient historical data is available, the auditor may use test data — but must clearly disclose this limitation in the audit summary.

Audit Frequency

Audits must be conducted at least annually. A new audit is also required if the AEDT is materially changed.

Public Disclosure

Employers must post a summary of the most recent bias audit on their website in a location accessible to applicants. The summary must include:

• The date of the most recent audit
• The selection rates and impact ratios for each demographic group
• The historical data used (or disclosure that test data was used)

The summary must remain posted for at least 3 years after the AEDT is no longer used.

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Notice Requirements

Candidate / Employee Notice

Before using an AEDT, employers must notify affected candidates or employees who are located in NYC at least 10 business days in advance. The notice must state:

1. That an AEDT will be used in the employment or promotion decision
2. The job qualifications or characteristics being assessed
3. How candidates can request an alternative selection process or accommodation

Job Posting Notice

If the employer posts a job listing for NYC positions, the notice must be included in the posting or provided through another reasonable means.

Alternative Selection Process

Employers must accommodate reasonable requests from candidates who object to being evaluated by an AEDT. What constitutes a "reasonable alternative" is fact-specific, but DCWP has indicated it could include a human review of the candidate's application without AEDT involvement.

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Compliance Timeline

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Penalties & Enforcement

The NYC Department of Consumer and Worker Protection (DCWP) has exclusive enforcement authority. There is no private right of action. The civil penalties are set by NYC Administrative Code § 20-872:

Note: Local Law 144 does not contain a $375 penalty tier or a 30-day cure period that lowers the fine — those figures do not appear in the statute. The penalty floor is $500.

Critically, each day an AEDT is used in violation of the law is a separate violation, and each failure to provide a required notice to a candidate or employee is also a separate violation. Because failing to post audit results, failing to provide required candidate notice, and using an unaudited AEDT are each treated as separate violations — and a fresh violation accrues for each day of continued non-compliant use — penalties can compound to as much as $1,500 per violation per day.

DCWP Enforcement Process

DCWP may:

• Respond to complaints from individuals
• Conduct proactive investigations
• Issue subpoenas and inspect records
• Impose civil penalties

December 2025 State Comptroller Audit

On December 2, 2025, New York State Comptroller Thomas P. DiNapoli released an audit finding that DCWP's enforcement of Local Law 144 has been "ineffective." Key findings included:

• Misrouted complaints. 75% of test calls placed to NYC's 311 system about AEDT issues were improperly routed and never reached DCWP, and the website instructions for filing complaints were unclear.
• Superficial compliance reviews. Of 32 employer and vendor bias-audit disclosures DCWP reviewed, the agency identified only 1 likely instance of non-compliance — while the Comptroller's review of the same 32 found at least 17 potential non-compliance issues.
• Unused tools. DCWP did not use its own "Enforcement Workbook" and did not consult the city's Office of Technology and Innovation (OTI) when evaluating whether tools were AEDTs.

DCWP agreed to implement most of the Comptroller's recommendations, including improving complaint routing, training staff, and strengthening its review process. Employment counsel (e.g., DLA Piper, January 2026) have read the audit as a signal that a stricter enforcement phase — with more frequent investigations and higher penalties — is likely. Employers who have treated Local Law 144 as low-enforcement-risk should re-verify that their bias audits, public disclosures, and candidate notices are current and defensible.

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Compliance Steps

1. Audit your hiring and promotion technology stack. Identify every tool that uses machine learning, statistical modeling, or AI to score, rank, or screen candidates or employees for NYC roles.

2. Determine if any tool qualifies as an AEDT. Apply the "substantially assists or replaces" test. When in doubt, treat the tool as an AEDT.

3. Commission an independent bias audit. Engage an auditor with no affiliation to your company or the vendor. Provide historical selection data; if unavailable, discuss test data methodology.

4. Review the audit results. Examine impact ratios. If an adverse impact ratio (below 0.80) is flagged, work with legal counsel and the AEDT vendor to understand whether bias mitigation is feasible.

5. Publish the audit summary. Post the results on your company's careers page or website. Include the audit date, selection rates, impact ratios, and data disclosure.

6. Update candidate-facing communications. Add AEDT disclosure language to job postings for NYC roles and ensure the 10-business-day advance notice process is in place.

7. Build an alternative process. Create a documented process for accommodating candidates who request an AEDT-free review.

8. Calendar annual re-audits. Set a reminder to re-commission the bias audit at least once every 12 months, or sooner if the AEDT is materially updated.

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Frequently Asked Questions

What is an AEDT? Any computational process (ML, AI, statistical modeling) that issues a score, classification, or recommendation substantially assisting or replacing discretionary hiring or promotion decisions affecting NYC residents.

Who must conduct the audit? An independent auditor — someone with no employment or business relationship with the employer or AEDT vendor.

What does the audit measure? Selection rates and impact ratios by race/ethnicity and sex, calculated against the EEOC's four-fifths (80%) rule as a standard benchmark.

When must candidates be notified? At least 10 business days before the AEDT is used to evaluate them, with disclosure of what the tool assesses.

Does it apply to remote workers? Yes — the trigger is the candidate's or employee's NYC location at the time of screening, not where the job is based.

Are employment agencies covered? Yes. Employment agencies using an AEDT on behalf of employers to screen NYC-based candidates must comply.

Is there a private lawsuit option? No. Only DCWP can enforce the law. Individuals cannot sue employers directly under NYC LL 144.

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Official Sources

• NYC Local Law 144 of 2021 (NYC Council)
• DCWP Automated Employment Decision Tools rules
• NY State Comptroller — Enforcement of Local Law 144 (audit, Dec. 2, 2025)
• DLA Piper — Critical audit of NYC's AI hiring law signals increased risk for employers (Jan. 2026)