NYC Local Law 144

Overview

NYC Local Law 144 of 2021, signed on December 11, 2021, took effect on January 1, 2023, with DCWP enforcement beginning July 5, 2023. It 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) adopted 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

Coverage depends on the location of the job, not the candidate. Under DCWP's official FAQ, an AEDT is used "in the city" when the job is based at an NYC office at least part of the time, when a fully remote job is associated with an NYC office, or when the employment agency using the AEDT is located in NYC. A San Francisco employer hiring for a San Francisco-based role is not covered even if an applicant lives in NYC; conversely, an NYC-located job triggers the bias-audit duty regardless of where candidates live. A candidate's NYC residence matters only for determining who must receive the advance notice.

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 an NYC-located job 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 (e.g., Hispanic or Latino male candidates). The adopted rule requires these calculations as a minimum; only categories representing less than 2% of the data may be excluded, and the exclusion must be disclosed

What the Audit Must Calculate

The bias audit must compute:

These rates and ratios must be calculated separately for each sex category, race/ethnicity category, and intersectional category.

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

The bias audit must have been conducted no more than one year before each use of the AEDT (in practice, an annual audit). Re-auditing after a material change to the tool is good practice, but neither the statute nor the adopted rule states it as a requirement.

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 and the distribution date of the AEDT
• The selection rates (or scoring rates) and impact ratios for each category, including intersectional categories
• The number of individuals assessed who fall into an unknown category
• The source of the data used (or disclosure that test data was used)

The summary and distribution date must remain posted for at least 6 months after the employer's latest use of the AEDT for an employment decision.

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Notice Requirements

Candidate / Employee Notice

Before using an AEDT, employers must notify affected candidates or employees who reside 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. Instructions for requesting an alternative selection process or a reasonable accommodation under other laws, where available

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

The notice must include instructions for how to request an alternative selection process or a reasonable accommodation under other laws, where one is available. The adopted rule states expressly that nothing in it requires an employer or employment agency to provide an alternative selection process. Accommodation duties can still arise under other laws, such as disability or religious accommodation requirements.

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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, the AEDT's distribution date, the rates and impact ratios for each category (including intersectional categories and the count of individuals in an unknown category), and the 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. Decide how to handle alternative-process requests. The law does not require you to provide an alternative selection process, but the candidate notice must include instructions for requesting one where available, and accommodation obligations can still arise under other laws (for example, disability or religious accommodation).

8. Calendar annual re-audits. Set a reminder to re-commission the bias audit at least once every 12 months. Re-auditing sooner after a material update to the tool is good practice, though not a stated legal requirement.

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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 for jobs located in New York City.

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 (or scoring rates, for AEDTs that score candidates) and impact ratios by sex, race/ethnicity, and intersectional category, 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? Only when the job is tied to NYC: a fully remote job is covered if it is associated with an NYC office. The trigger is the job's location, not the candidate's; a candidate's NYC residence matters only for the notice requirement.

Are employment agencies covered? Yes. Employment agencies using an AEDT on behalf of employers to screen candidates for NYC-located jobs must comply, and an agency located in NYC is itself within the law's scope.

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
• DCWP adopted final rule on AEDTs (PDF, Apr. 2023)
• DCWP AEDT Frequently Asked Questions (PDF)
• 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)