New Jersey S-1943: AI Hiring Disclosure & Bias Audit Law

Citation: New Jersey S-1943 / A1 (Companion bills)
Status: Passed legislature; pending Governor signature and/or final rulemaking
Expected Effective Date: 2026
Jurisdiction: New Jersey — applies to employers using AI to evaluate NJ candidates
Enforced by: New Jersey Division on Civil Rights
Official Source: New Jersey Legislature – S-1943

Overview

New Jersey S-1943 (and its companion Assembly bill A1) is pending AI hiring legislation that will require employers and employment agencies using AI tools to evaluate or rank job candidates to:

1. Disclose AI use to applicants before evaluation
2. Conduct annual bias audits of AI hiring tools
3. Publish audit results publicly
4. Offer alternative evaluation processes for candidates who prefer not to be assessed by AI

When enacted, S-1943 will make New Jersey one of the strictest states for AI hiring compliance on the East Coast — closely mirroring NYC Local Law 144, which is already in effect across the Hudson River.

Who must comply: Employers operating in New Jersey using AI tools to evaluate or rank job candidates, including employment agencies and staffing firms.

Preparation timeline: Given the expected 2026 effective date and complexity of bias auditing, employers should begin compliance preparation now.

Current Legislative Status

Key open question: Whether S-1943 will require independent third-party bias audits (like NYC LL 144) or allow internal audits (like California AB 2930). Final rules from the NJ Division on Civil Rights will determine this.

Proposed Scope

S-1943 would cover:

• Employers operating in New Jersey using AI tools to evaluate or rank job candidates
• Employment agencies using AI tools for candidate screening and placement
• AI tools that evaluate, screen, or rank candidates based on automated analysis

Types of AI tools expected to be covered:

Key Proposed Requirements

1. Candidate Disclosure

Employers must provide candidates with notice that AI is being used to evaluate or rank their application. Required disclosure elements:

• That an AI hiring tool is being used
• The general purpose of the AI tool
• What types of data or characteristics the AI tool evaluates
• How the AI tool's output influences hiring decisions
• Contact information for applicant inquiries

Timing: Disclosure must occur before or at the time the AI tool is used.

2. Annual Bias Audit

The centerpiece of S-1943 — modeled on NYC Local Law 144's bias audit requirement. Employers must:

• Commission an annual bias audit of each AI hiring tool used in New Jersey
• Analyze whether the tool produces disparate impact based on:
  • Race and ethnicity
  • Sex and gender
  • National origin
  • Religion
  • Age (40+)
  • Disability status

Audit methodology (expected, based on pending rules):

• Calculate selection rates for each protected class
• Compute impact ratios: selection rate for each group ÷ selection rate for the highest-selected group
• Apply the "4/5ths rule" or statistical significance testing to identify adverse impact

3. Publication of Audit Results

Employers would be required to make bias audit results available — likely through publication on the company's website or disclosure to the NJ Division on Civil Rights. Specific publication requirements are pending rulemaking.

4. Alternative Process

Applicants must have the option to request an alternative evaluation process that does not use AI if they prefer not to be assessed by automated tools.

5. Record Retention

Employers must retain records of AI tool use, disclosures, and audit results (expected: 2–3 years, to be confirmed in final rules).

S-1943 vs. NYC Local Law 144: Key Comparison

S-1943 is closely modeled on NYC LL 144. Employers already complying with LL 144 will have a significant head start:

If you're already compliant with NYC LL 144, you're largely positioned for S-1943 compliance — with minor NJ-specific variations to address once final rules are issued.

Enforcement Framework

When enacted, S-1943 would be enforced by the New Jersey Division on Civil Rights, leveraging New Jersey's existing anti-discrimination enforcement infrastructure:

• Complaint-driven investigations
• AG-initiated investigations for systematic violations
• Civil penalties (amounts pending rulemaking)
• Injunctive relief
• Potential private right of action (pending final bill language)

Proactive Compliance Strategy

Immediate Actions (Pre-Enactment)

1. Inventory AI hiring tools: Document all AI systems used in New Jersey hiring
2. Request vendor bias audit documentation: Ask vendors whether they have conducted or can support bias audits
3. Draft disclosure templates: Create candidate notice templates modeled on NYC LL 144 standards
4. Establish alternative process: Build a non-AI evaluation pathway into your hiring workflow
5. Monitor rulemaking: Track Division on Civil Rights announcements for final requirements

When Final Rules Are Published

1. Engage independent auditor (if required): Identify qualified third-party auditors
2. Collect audit data: Gather 12 months of AI tool selection rate data by protected class
3. Complete initial audit before the effective date
4. Publish results as required by final rules
5. Update candidate-facing materials with final disclosure language

Multi-State Context for New Jersey Employers

New Jersey employers frequently hire across the NY/NJ metro corridor. Current compliance obligations:

Industries Most Affected

How EmployArmor Helps

EmployArmor prepares New Jersey employers for S-1943 compliance:

• Pre-enactment readiness audit: Assess current AI hiring tools against S-1943 proposed requirements
• Disclosure template drafting: Create candidate notices aligned with emerging NJ and existing NYC standards
• Auditor network: Connect with qualified bias auditors experienced in NJ/NY compliance
• NYC LL 144 crosswalk: Map existing NYC compliance to NJ S-1943 requirements
• Regulatory monitoring: Real-time alerts when S-1943 rules are finalized and effective date confirmed

Get your New Jersey AI Hiring Readiness Assessment →

New Jersey Employer Resources

• New Jersey Employment Law Compliance Hub
• New Jersey Pay Transparency Law Guide
• NYC Local Law 144 Guide (related law)

Frequently Asked Questions

Is New Jersey S-1943 currently law?

Answer: Not yet enacted as of March 2026. The bill has passed the legislature and is pending final gubernatorial action and/or regulatory rulemaking. Monitor the NJ Division on Civil Rights for updates on final rules and the effective date.

If we already comply with NYC Local Law 144, are we compliant with S-1943?

Answer: Largely yes — NYC LL 144 compliance (independent bias audit, disclosure, website publication) aligns closely with S-1943's proposed framework. Minor NJ-specific variations will emerge in the final rules, but NYC-compliant employers have a significant head start.

Will S-1943 require independent auditors like NYC, or can we conduct internal audits?

Answer: This is a key open question pending final rulemaking by the NJ Division on Civil Rights. NYC requires independent third-party auditors; California AB 2930 allows internal audits. The NJ Division on Civil Rights' final rules will clarify this requirement.

When should New Jersey employers start preparing for S-1943?

Answer: Now. Given the expected 2026 effective date and the complexity of bias auditing and disclosure implementation, employers should begin compliance preparation immediately — particularly those also subject to NYC Local Law 144.

Does S-1943 apply to New Jersey candidates who apply for remote positions?

Answer: It is expected to apply to New Jersey residents applying for positions — including remote ones — similar to NYC LL 144's geographic trigger. Confirm with counsel once final rules are published.

What types of AI tools does S-1943 cover?

Answer: S-1943 is expected to cover AI tools that evaluate, screen, or rank job candidates — including resume screening AI, video interview analysis AI, candidate fit-scoring platforms, and automated assessments. Background check reporting tools that only report factual records (without AI scoring) are likely excluded.

Last updated: March 2026. This content is for informational purposes only and does not constitute legal advice. S-1943 requirements are subject to change as final rules are issued. Consult qualified employment counsel for guidance specific to your organization.

Related Laws and Resources:

• NYC Local Law 144 Guide
• California AB 2930 Guide
• Colorado AI Act Guide
• Illinois AIVIA Guide
• Multi-State AI Hiring Laws Comparison
• AI Hiring Compliance Guide 2026