Do I need a bias audit for my hiring software?

You likely need a bias audit for your hiring software if you operate in New York City, Illinois, or Colorado — three jurisdictions with active AI hiring laws as of 2026. NYC Local Law 144 (in effect since July 2023) requires annual independent bias audits for any employer using an automated employment decision tool (AEDT) to screen or rank candidates for NYC positions. Illinois AIVIA (effective January 1, 2026) extends this requirement statewide to all Illinois employers using AEDTs. Colorado SB 24-205 (effective February 1, 2026) requires pre-deployment AI impact assessments for high-risk AI systems but not the same annual bias audit structure. An AEDT is any AI-based tool that screens, ranks, filters, or makes employment decisions about candidates — this includes resume screening platforms, video interview analyzers, and psychometric assessment tools. The audit must be conducted by an independent third party with no financial stake in the AEDT's adoption. Employers who fail to comply face escalating penalties: NYC DCWP enforcement carries $500–$1,500 per day (NYC DCWP) per violation; Illinois penalties reach $10,000–$25,000 per violation; Colorado penalties top out at $20,000 per violation. EmployArmor automates the bias audit workflow — data preparation, statistical analysis, auditor coordination, and public disclosure generation — making compliance achievable without dedicated legal departments.

Last updated: March 2026

Comparison: Bias Audit Requirements by Law

RequirementNYC LL144IL AIVIACO SB 24-205
Annual bias audit requiredYes — by independent third partyYes — annualNo — impact assessment instead
State agency notificationNoYes — IDES, 30 days before useNo
Public disclosure summaryYes — on employer websiteYes — upon requestInternal documentation only
Candidate noticeYes — 10 business days before useYes — before AEDT processes candidateNot specified in law
Pre-deployment requirementAudit must be completed before useIDES notice 30 days before; audit annualImpact assessment before deployment
Penalties$500–$1,500/day per violation (DCWP)$10,000–$25,000 per violation$20,000 per violation (AG enforcement)

How It Works

  1. Identify all AEDTs used in your hiring pipeline — resume screeners, video interview tools, psychometric platforms, ranking algorithms.
  2. Determine which jurisdictions' laws apply based on where your candidates are located (NYC, Illinois, or Colorado).
  3. Connect your ATS or upload historical candidate data — demographics and outcomes — into EmployArmor's platform.
  4. EmployArmor's statistical engine runs bias analysis: adverse impact ratios, selection rate comparisons, and significance testing.
  5. A qualified independent auditor reviews the analysis and certifies the bias audit report.
  6. For NYC employers, publish the public disclosure summary on your company website.
  7. Set annual re-audit reminders to maintain continuous compliance across all applicable jurisdictions.

By the Numbers

  • NYC LL144: $500–$1,500 per day per violation (DCWP enforcement)
  • Illinois AIVIA: $10,000 initial / $25,000 subsequent per violation
  • Colorado SB 24-205: $20,000 per violation (AG enforcement)
  • IL AIVIA effective: January 1, 2026
  • CO SB 24-205 effective: February 1, 2026
  • CA AB 2930: Pending — would add bias audit requirements for California employers

Frequently Asked Questions

Do I need a bias audit for my hiring software?

You need a bias audit if you use an automated employment decision tool (AEDT) to screen, rank, or select candidates in New York City (under Local Law 144), in Illinois (under AIVIA effective January 1, 2026), or if you deploy a high-risk AI system in Colorado (under SB 24-205 effective February 1, 2026). The audit must be conducted annually and the summary disclosed publicly.

What counts as an automated employment decision tool (AEDT)?

An AEDT is any software that uses AI, machine learning, or algorithmic processes to make or materially influence hiring decisions. Common examples include resume screening platforms, video interview analysis tools, psychometric assessment platforms, and candidate ranking or scoring algorithms.

Does Local Law 144 apply if my company is not based in New York?

Yes, if you use an AEDT to screen candidates for positions based in New York City. The law applies to all employers who use AEDTs in NYC hiring, regardless of where the company is headquartered. Remote hiring for NYC-based positions is included.

Does AIVIA apply to small businesses?

Yes. Illinois AIVIA applies to all Illinois employers using AEDTs, with no small business exemption. Unlike some employment laws that scale requirements by company size, AIVIA's obligations apply uniformly to any employer using AI-based hiring tools in Illinois.

What happens if I don't conduct a required bias audit?

Failure to conduct a required bias audit under NYC LL144 can result in civil penalties of $500–$1,500 per day per violation, as enforced by the DCWP. Illinois AIVIA violations carry penalties up to $10,000 initially and $25,000 for subsequent violations. Colorado's non-compliance penalties reach up to $20,000 per violation under SB 24-205.

Can I use my ATS vendor's bias audit instead of a third-party audit?

Under NYC Local Law 144, the bias audit must be conducted by an independent third party — not the AEDT vendor or the employer itself. The third party must not have a financial interest in the AEDT's adoption. Illinois AIVIA similarly requires an independent annual bias audit. EmployArmor coordinates with a network of qualified independent auditors to satisfy this requirement.

EmployArmor automates this — run a free compliance scan.

References

  1. NYC Administrative Code § 20-871–20-875 (Local Law 144 of 2021). NYC Dept. of Consumer and Worker Protection
  2. Illinois Artificial Intelligence Video Interview Act (820 ILCS 42). Illinois General Assembly
  3. Colorado SB 24-205, "Consumer Protections for Artificial Intelligence" (2024). Colorado General Assembly
  4. EEOC Technical Assistance, "The ADA and AI to Assess Job Applicants" (May 2022). U.S. Equal Employment Opportunity Commission