What New York City’s Local Law 144 Requires of AI Hiring Tools

Key takeaways

• Employers and employment agencies must get an independent bias audit before using an automated tool to screen NYC candidates, and repeat it every year.
• Audit results and the tool’s start date must be posted publicly, and candidates need 10 business days’ notice before the tool is used.
• A December 2025 state audit found DCWP missed most non-compliance among 32 companies it reviewed and mishandled most test complaints routed through 311.

New York City employers that use software to screen job applicants or evaluate employees for promotion operate under a specific set of rules. Local Law 144 of 2021, enforced by the city’s Department of Consumer and Worker Protection (DCWP), prohibits using an automated employment decision tool unless it has undergone an independent bias audit and candidates have been notified in advance.

The law took effect January 1, 2023, and DCWP began enforcing it on July 5, 2023. It applies narrowly.

What Counts as an AEDT Under the Law

DCWP defines an automated employment decision tool as a computer-based tool that uses machine learning, statistical modeling, data analytics or artificial intelligence, helps an employer or employment agency make an employment decision, and substantially assists or replaces discretionary decision-making. The agency’s guidance describes machine learning and related techniques as methods for generating a prediction, such as a candidate’s likely fit for a job, or a classification, such as grouping applicants by skill set.

The law covers tools used anywhere in the hiring or promotion process, not just the final decision. DCWP’s FAQ states that if a tool substantially helps assess or screen candidates at any point, the requirements apply before it can be used.

It does not cover every automated step. Scanning a resume database, reaching out to potential candidates, or inviting people to apply falls outside the law, because those actions involve people who have not yet applied for a specific position. Coverage also depends on location: the job must be based at least part time in a New York City office, be a remote position tied to a city office, or involve an employment agency operating in the city.

One Audit, Two Very Different Counts
DCWP reviewed the websites of 32 employers and vendors for Local Law 144 compliance and flagged one problem. A state comptroller’s audit of the same 32 companies found at least 17 instances of potential non-compliance.

What the Annual Bias Audit Must Measure

Before using a covered tool, an employer must have it evaluated by an independent auditor. DCWP’s rules and FAQ set a floor for that evaluation: it must calculate selection or scoring rates and impact ratios across sex categories, race and ethnicity categories, and intersectional categories combining the two.

The audit relies on historical data collected during actual use of the tool. Employers can pool historical data with other companies using the same tool, but only if they supplied their own usage data to the auditor or are using the tool for the first time. If historical data is too limited for a statistically meaningful audit, test data can substitute, but the public summary must explain why and how that data was built. DCWP has not set a numeric threshold for what counts as statistically significant, leaving that judgment to the auditor.

Employers cannot fill data gaps by guessing at an applicant’s race or sex. The FAQ states plainly that imputed or inferred demographic data cannot be used in a bias audit. A demographic category can be dropped from the calculations only if it makes up less than 2 percent of the audit’s data set.

An auditor is not considered independent if they work for the employer, the agency, or the tool’s vendor; were involved in building, using or distributing the tool; or hold a direct or material indirect financial stake in the employer or vendor. Vendors are allowed to commission audits of their own products, but DCWP’s guidance is explicit that the hiring employer, not the vendor, remains responsible for making sure a valid audit exists before the tool is used.

What Must Be Published, and Where

Completing a bias audit is not enough; the results have to be made public. DCWP requires employers to post a summary of the most recent audit along with the tool’s distribution date, meaning the date the employer started using it. That information can go on the employment section of the company’s website or be reached through an active hyperlink.

The summary itself has required contents: the date of the most recent audit, the source and explanation of the data used, the number of people the tool assessed who fell into an unknown demographic category, and the number of applicants along with the selection or scoring rates and impact ratios for every category included.

An audit is only good for one year from the date it was conducted. To keep using a tool beyond that window, an employer needs a fresh audit and an updated public summary.

Of 12 test calls placed to 311 to report an AEDT violation, only three were correctly routed to the agency that enforces the law.

The 10-Business-Day Notice to Candidates

Separately from the audit, employers must tell New York City resident candidates and employees that an automated tool is in use and what qualifications or characteristics it evaluates. The notice must also include instructions for requesting a reasonable accommodation under other laws.

Timing matters: the notice must go out at least 10 business days before the tool is used. For job applicants, employers can satisfy this through a job posting, mail or email, or by posting notice on their employment website — in which case the notice does not need to name a specific position, and the 10-business-day clock can start running before any particular job is posted. For employees being considered for promotion, the same alternative applies through a written policy or procedure rather than a position-specific notice.

Complaints, Penalties and a Critical State Audit

DCWP enforces the bias-audit and notice requirements; it does not investigate whether a tool actually discriminates. The agency directs discrimination complaints to the New York City Commission on Human Rights, which enforces the separate NYC Human Rights Law. Complaints about missing audits or notices can be filed through 311 or the DCWP website and should include the job posting or position, the name and type of the tool, any notice that was provided, and an explanation of the suspected violation.

How well that system works came under scrutiny in a December 2, 2025 audit from the Office of the New York State Comptroller, covering July 2023 through June 2025. State Comptroller Thomas DiNapoli’s office reported that DCWP had received only two AEDT-related complaints during the entire two-year period. When DCWP reviewed the websites of 32 employers and vendors for compliance, it identified just one non-compliance issue; auditors who reviewed the same 32 companies found at least 17 instances of potential non-compliance.

The audit also tested how complaints move through the system, placing 12 calls to 311 to report AEDT issues. Only three of those calls, 25 percent, were correctly transferred to DCWP. Eight calls, 67 percent, were misdirected to the New York State Department of Labor, and one call was routed back to the employer accused of the violation. The comptroller’s office issued 13 recommendations, including that DCWP fix its complaint-routing process, study why complaint volume is so low, and use technical resources from the city’s Office of Technology and Innovation when reviewing suspected violations.

Related coverage: What New York City’s Racial Equity Plan Asks of City Agencies.

Photo: Momos · CC BY-SA 3.0 · via Wikimedia Commons