NYC AI Law: Bias Audits, Candidate Notice, and Penalties

The NYC AI hiring law, formally Local Law 144 of 2021, requires any employer or employment agency using an automated tool to screen candidates or evaluate employees for promotion in New York City to have that tool independently audited for bias every year, publish a summary of the results on its website, and notify New York City residents at least 10 business days before the tool is used on them.¹ The law took effect January 1, 2023, with enforcement starting July 5, 2023, and violations carry civil penalties up to $1,500 per day.²

Who Has to Follow It

The law reaches any employer or employment agency that uses an automated employment decision tool for a job connected to New York City.² A job counts as “within the city” if it is based in an NYC office at least part-time, or if it is fully remote but associated with an NYC office location. An employment agency located outside the city is still covered as long as the job it is filling meets one of those tests.³

The candidate notice piece is narrower. Only NYC residents have to receive the pre-use notification.³ But the bias audit has to be done before the tool is used on anyone, no matter where they live.

What Counts as an Automated Employment Decision Tool

An automated employment decision tool, or AEDT, is any computational process using machine learning, statistical modeling, data analytics, or artificial intelligence that produces a simplified output — a score, classification, or recommendation — used to substantially assist or replace a human manager’s discretionary decision about hiring or promotion.⁴

The phrase “substantially assist or replace” does the heavy lifting. Spam filters, firewalls, antivirus programs, calculators, spreadsheets, and simple databases are explicitly excluded.⁴ The tool has to actually influence whether someone is hired or promoted. Resume-screening software that ranks applicants, video interview platforms that score responses, and predictive models that flag top performers all fit.

The Bias Audit

Before an employer or employment agency deploys an AEDT, it must have the tool audited by an independent auditor. The audit must be no more than one year old at the time of use.² As long as the tool stays in use, the audit repeats every year.

What It Measures

The audit tests for disparate impact across the demographic categories employers already report to the federal Equal Employment Opportunity Commission: race, ethnicity, and sex.⁴ DCWP’s rules go further and require an intersectional analysis, meaning combinations like Black women or Asian men, rather than race and sex viewed only in isolation.

For each group, the auditor calculates an impact ratio: that group’s selection or scoring rate divided by the rate of the best-performing group. A ratio of 1.0 means no disparity. Under the long-standing federal “four-fifths rule,” an impact ratio below 0.80 flags potential disparate impact.⁵ Local Law 144 does not set a hard pass/fail line, but the numbers become public.

Who Can Perform It

The statute defines a bias audit as “an impartial evaluation by an independent auditor.”⁴ Someone who built the tool cannot audit it. Neither can an employee of the company using it. Most employers hire outside compliance firms or data-science consultancies with no stake in the outcome.

Publishing the Results

A summary of the most recent audit must be posted on the employer’s or agency’s website.¹ It becomes a public record that any candidate, journalist, regulator, or plaintiff’s attorney can read.

Notice to Candidates

Before using an AEDT on a New York City resident, the employer or agency must give written notice at least 10 business days in advance.² The notice can live on the careers section of the employer’s site or inside the job posting. It has to cover three points:

That an automated tool will be used to assess the person’s qualifications.
The specific job qualifications and characteristics the tool measures.
The types of data the tool collects and the sources of that data. If those details are not already posted on the website, the employer has to provide them within 30 days of a written request.²

The notice must also let the candidate request an alternative selection process or an accommodation.² The law does not spell out what the alternative has to look like, but an employer cannot force every applicant through the algorithm with no other path.

The Employer Owns the Compliance Risk, Not the Vendor

This trips up a lot of companies. The legal obligation sits with the employer or employment agency, not the software vendor. DCWP’s guidance says employers and employment agencies are “ultimately responsible for ensuring a bias audit was done before using an AEDT.”³ A vendor can arrange its own audit, and many do, but that does not transfer the penalty exposure. If the audit is missing or stale, the employer pays.

What Violations Cost

A first violation, along with any additional violations on the same day, carries a penalty of up to $500 each. Each violation after the first day costs between $500 and $1,500.²

The counting is what makes this dangerous. Every day the tool is used without compliance is a separate offense, and every candidate who does not get the required notice is a separate violation.² A company screening 50 applicants a day through an unaudited tool for ten days can rack up hundreds of individual violations. The NYC Corporation Counsel can also sue to enforce the statute, and the law does not limit any other rights a candidate might have, although no court has yet ruled on whether Local Law 144 creates its own private right of action.

How Enforcement Has Actually Worked

DCWP is the agency in charge, but a December 2025 audit by the New York State Comptroller found the enforcement record is thin. Between July 2023 and June 2025, DCWP received only two AEDT-related complaints.⁶

The Comptroller found DCWP’s complaint intake was broken: complaints filed through 311 were not consistently reaching DCWP, and the agency never checked whether the pipeline worked. DCWP also lacked the technical expertise to evaluate AEDT use and did not consult with the city’s Office of Technology and Innovation. Reviewing the same 32 companies, DCWP flagged one instance of noncompliance; the Comptroller flagged at least 17.⁶

Filing a Complaint

If an employer or employment agency uses an AEDT without a bias audit, without a posted audit summary, or without giving you the required notice, you can file a complaint with DCWP through its online portal or by calling 311.¹ Given the Comptroller’s findings about 311 routing, filing directly through the DCWP portal is the safer route. Save the job posting, any emails from the employer, and screenshots of the careers page, especially if there is no published audit summary. That record makes the complaint harder to dismiss.

Federal Law Still Applies

Local Law 144 sits on top of federal anti-discrimination law, not in place of it. Title VII of the Civil Rights Act of 1964 prohibits employment practices that have a disparate impact on protected groups, whether or not the employer intended to discriminate, and whether or not a third-party vendor ran the tool. The federal four-fifths rule is the same basic math the NYC impact ratios capture.⁵ The difference is exposure: Title VII disparities usually only surface in litigation, while Local Law 144 puts the numbers on the open web. A publicly posted audit showing wide gaps can hand a plaintiff a running start in a federal discrimination case. Note also that Illinois, Colorado, and California have their own AI hiring rules with different scope and different obligations, so an NYC-focused compliance approach does not automatically satisfy those laws.

1
NYC Department of Consumer and Worker Protection. Automated Employment Decision Tools (AEDT)
2
City of New York. New York City Local Law 144 of 2021 – Automated Employment Decision Tools
3
NYC Department of Consumer and Worker Protection. Automated Employment Decision Tools: Frequently Asked Questions
4
American Legal Publishing. NYC Administrative Code 20-870 Definitions
5
U.S. Equal Employment Opportunity Commission. Questions and Answers to Clarify and Provide a Common Interpretation of the Uniform Guidelines
6
Office of the New York State Comptroller. Enforcement of Local Law 144 – Automated Employment Decision Tools