New York City Local Law 144: Automated Employment Decision Tools (AEDT)
Citation: New York City Local Law 144 of 2021 (Admin. Code § 20-871 et seq.)
Effective: July 5, 2023
Jurisdiction: NYC — applies when candidate is located in NYC, regardless of employer location
Enforced by: NYC Department of Consumer and Worker Protection (DCWP)
First Penalties Issued: Q4 2025
Official Source: NYC Rules – LL 144
Overview
New York City Local Law 144 (LL 144) is the most actively enforced AI hiring law in the United States. It requires employers and employment agencies using Automated Employment Decision Tools (AEDTs) in NYC hiring or promotion decisions to:
- Commission annual independent bias audits
- Publish audit results on their company website
- Provide 10-business-day advance notice to candidates
Why this matters now: The NYC DCWP issued its first penalties in Q4 2025 and has ongoing investigations. Non-compliance creates rapidly accumulating daily liability.
Geography-based jurisdiction: LL 144 applies if the candidate is located in NYC — regardless of where the employer is headquartered. A San Francisco company recruiting a candidate in Brooklyn must comply.
What Is an "Automated Employment Decision Tool" (AEDT)?
Under LL 144, an AEDT is any computational process derived from machine learning, statistical modeling, data analytics, or AI that substantially assists or replaces discretionary decision-making in hiring or promotion.
"Substantially assists or replaces" means:
- Using an output as one of the criteria in the decision
- Using an output to overrule or limit a human reviewer's recommendation
- Generating a score, tag, classification, ranking, or recommendation that factors into hiring or promotion
Examples of covered AEDTs:
| Tool Type | Covered? |
|---|---|
| Resume screening and scoring tools that rank candidates | ✓ Yes |
| Video interview AI that generates candidate assessments | ✓ Yes |
| Candidate fit-scoring and matching platforms | ✓ Yes |
| AI-powered assessment platforms with suitability scores | ✓ Yes |
| Systems generating "hire/no-hire" recommendations | ✓ Yes |
| Scheduling software with no decision-making component | ✗ Not covered |
| Background check platforms reporting factual records (no AI scoring) | ✗ Not covered |
| ATS tools used solely for record-keeping | ✗ Not covered |
Key Requirements
1. Annual Independent Bias Audit
This is the cornerstone of LL 144. Each AEDT used in NYC hiring or promotion must be audited by a qualified, independent third-party auditor (not the employer or AEDT vendor). The audit must:
- Analyze the AEDT's selection rates across sex categories and race/ethnicity categories
- Calculate the impact ratio for each group
- Assess whether the AEDT produces statistically significant disparate impact
- Cover the most recent 12-month period of AEDT use
Auditor independence requirement: The auditor cannot be employed by the employer or the AEDT vendor. Internal HR teams and vendor-provided audits do not qualify.
2. Public Publication of Audit Results
Within 10 business days of completing the bias audit, employers must publish results on their company website. Published summary must include:
- Date of the audit
- Name of the independent auditor
- Summary of results including impact ratios for each sex and race/ethnicity category
- Number of applicants assessed during the audit period
- Scoring criteria used by the AEDT
Results must remain posted until superseded by the next annual audit.
3. Candidate Disclosure (Minimum 10-Day Advance Notice)
Employers must notify candidates at least 10 business days before the AEDT is used. The disclosure must:
- State that an AEDT will be used in the hiring or promotion decision
- Describe the job qualifications and characteristics the AEDT assesses
- Provide instructions for requesting an alternative selection process
Disclosure can be made through the job posting, application, or other written communication — the 10-day timing requirement must be met.
4. Alternative Process
Employers must accommodate requests for an alternative selection process that does not use the AEDT, before the AEDT is used.
5. Data Retention Notice
Employers must publish on their company website:
- What candidate data the AEDT collects
- How long data is retained
- Where candidate data is stored
Penalties
| Violation | Penalty |
|---|---|
| First violation | $500 minimum |
| Subsequent violations | $1,500 per day |
| Each day of non-compliance | Separate violation |
| Enforcement authority | NYC DCWP |
Example: Failing to conduct a bias audit for 60 days after the deadline = $90,000+ in potential penalties.
First enforcement (Q4 2025): The NYC DCWP levied penalties against multiple employers using well-known AI hiring platforms without required bias audits. Ongoing investigations are active.
Audit Methodology: Impact Ratio Calculation
The DCWP's rules specify the required bias audit methodology:
Impact Ratio Formula
Impact Ratio = (Selection rate for group) ÷ (Selection rate for highest-selected group)
- Ratio of 0.80 or above (the "4/5ths rule"): Generally indicates no adverse impact
- Ratio below 0.80: May indicate disparate impact requiring investigation
- Statistical significance tests should accompany impact ratio calculations
Race/Ethnicity Categories Audited
- Hispanic or Latino
- White (non-Hispanic)
- Black or African American (non-Hispanic)
- Asian (non-Hispanic)
- Native Hawaiian or Pacific Islander (non-Hispanic)
- American Indian or Alaska Native (non-Hispanic)
- Two or more races (non-Hispanic)
Data sufficiency note: If fewer than 100 candidates were assessed in a given category, the auditor may note this and explain why analysis was not performed for that category.
Common Compliance Mistakes
| Mistake | Risk |
|---|---|
| Using a vendor-provided "audit" | Not independent; violates LL 144 |
| Publishing audit results in a hard-to-find location | May not satisfy publication requirement |
| Not providing 10-day advance notice | Disclosure violation |
| Assuming HQ outside NYC = exemption | Law applies based on candidate location |
| Conducting audit but not updating annually | Must be done every 12 months |
LL 144 vs. Other State AI Hiring Laws
| Feature | NYC LL 144 | NJ S-1943 | California AB 2930 | Colorado SB24-205 |
|---|---|---|---|---|
| Independent bias audit | ✓ Required | ✓ Proposed | Internal audit | Impact assessment |
| Public audit publication | ✓ Required | ✓ Proposed | — | AG report |
| Advance candidate notice | ✓ 10 days | ✓ Proposed | ✓ Pre-use | ✓ Pre-use |
| Alternative process | ✓ | ✓ | ✓ | ✓ |
| Max penalty | $1,500/day | Pending rules | $7,500/violation | $20,000/violation |
| Enforcement status | Active (2025) | Pending | Jan 2026+ | Feb 2026+ |
Compliance Checklist
- Identify all AEDTs used in NYC hiring or promotion decisions
- Engage a qualified, independent third-party bias auditor
- Gather 12 months of AEDT use data (selection rates by sex and race/ethnicity)
- Complete bias audit and obtain written audit report
- Publish audit results on company website within 10 business days
- Add data retention notice to company website
- Update job postings and application portals with LL 144 disclosures
- Build 10-day advance notice workflow into recruiting process
- Establish alternative selection process for opt-out candidates
- Set annual audit renewal reminders
How EmployArmor Helps
EmployArmor simplifies NYC LL 144 compliance:
- Auditor network: Connect with qualified independent auditors specializing in AEDT bias audits
- Audit data preparation: Aggregate and format AEDT selection rate data for auditor review
- Disclosure templates: Pre-built LL 144 candidate notice templates for job postings
- Publication assistance: Formatted audit summaries ready for website publication
- Annual audit scheduling: Automated reminders and workflow management
Get your NYC LL 144 Compliance Assessment →
New York Employer Resources
- New York Employment Law Compliance Hub
- New York Recruiting Compliance
- New Jersey S-1943 Guide (related NJ law)
Frequently Asked Questions
What makes a bias auditor "independent" under LL 144?
Answer: The auditor must have no financial relationship with the employer or the AEDT vendor. Law firms, specialized AI auditing firms, and academic institutions typically qualify. Internal HR teams and AEDT vendors do not.
Do we need a new audit each year even if our AEDT hasn't changed?
Answer: Yes. LL 144 requires an annual bias audit regardless of whether the AEDT has changed. Annual audits reflect updated data on actual usage patterns.
What if our AEDT vendor won't share the data we need for an audit?
Answer: This is a significant compliance issue. Review your vendor contract to ensure access to selection rate data is available. If a vendor refuses to provide audit data, that AEDT likely cannot be used in NYC hiring legally.
Does LL 144 apply to promotion decisions for current employees?
Answer: Yes. LL 144 covers both hiring and promotion decisions. AEDTs used to evaluate current employees for promotion in NYC positions are subject to the same requirements.
Does NYC Local Law 144 apply to remote roles where the candidate is in NYC?
Answer: Yes. The law applies based on where the candidate is located — not where the job is physically performed. A remote candidate based in NYC triggers LL 144 compliance.
What is the penalty for failing to conduct the annual bias audit?
Answer: After the first violation ($500 minimum), each additional day of non-compliance carries a $1,500/day penalty. Failing to audit for 60 days after the deadline could result in $90,000+ in penalties.
Last updated: March 2026. This content is for informational purposes only and does not constitute legal advice. Consult qualified employment counsel for guidance specific to your organization.
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