Who must comply with NYC Local Law 144?

Any employer or employment agency using an automated employment decision tool (AEDT) to screen candidates for a job located in New York City, regardless of where the employer is headquartered. They must run an independent bias audit within the prior year, publish the summary, and notify candidates at least 10 business days in advance.

When do EU AI Act obligations apply to hiring systems?

AI systems used for recruitment and employee selection are high-risk under Annex III 4(a). High-risk obligations for hiring systems apply from August 2, 2026, covering risk management, data governance, human oversight, transparency, logging, and post-market monitoring.

An Automated Employment Decision Tool is any computational process derived from machine learning, statistics, or AI that produces a score, classification, or recommendation used to substantially assist or replace discretionary hiring or promotion decisions.

What are the penalties for NYC Local Law 144 non-compliance?

Fines start at $500 for a first violation and reach $1,500 for each subsequent violation. Each day of non-compliant use and each missed candidate notice counts as a separate violation.

NYC Local Law 144 Explained: What Employers Must Do Before Using AI Hiring Tools

Q: Can our AI vendor perform our bias audit?

No. NYC Local Law 144 requires an independent auditor with no role in building, selling, or using the tool and no financial interest in it. Vendors can supply data but cannot serve as the independent auditor.

Summary: New York City's Local Law 144 regulates the use of automated employment decision tools (AEDTs) in hiring and promotion. If you use software to screen, rank, or score candidates for a job located in New York City, you must commission an independent bias audit within the prior year, publish a summary of the results, and notify candidates at least 10 business days before the tool is used. Enforcement began on July 5, 2023, and penalties run from $500 to $1,500 per violation, with each day of non-compliant use counting separately.

Key takeaways

Local Law 144 applies to employers and employment agencies using AEDTs for jobs based in New York City, regardless of where the company is headquartered.
Three obligations sit at the center of the law: an annual independent bias audit, public disclosure of the audit summary, and advance candidate notice.
The bias audit must measure selection rates and impact ratios across sex, race and ethnicity, and intersectional categories.
Non-compliance is measured per day and per candidate, so exposure adds up quickly.
Compliance is achievable in weeks with the right sequence, and it usually surfaces improvements worth making anyway.

What is Local Law 144?

Local Law 144 of 2021 is a New York City ordinance governing how employers use automated tools to make or heavily influence hiring and promotion decisions. The New York City Department of Consumer and Worker Protection (DCWP) enforces it, and active enforcement began on July 5, 2023.

The law was written in response to a simple concern. Hiring software increasingly decides who moves forward, yet candidates rarely know a tool was involved, and employers rarely know whether that tool treats groups of people differently. Local Law 144 tries to close that gap with transparency and testing rather than an outright ban.

What is an automated employment decision tool?

An automated employment decision tool, or AEDT, is any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that produces a score, classification, or recommendation used to substantially assist or replace discretionary decision making in hiring or promotion.

In practice, that includes resume screeners that rank applicants, assessment platforms that score candidates against a model, video interview tools that evaluate responses, and matching engines that surface a shortlist. A basic keyword filter or a spreadsheet you update by hand generally does not qualify. The line the law draws is whether the tool substantially assists or replaces human judgment, not whether it uses a fashionable label like AI.

The three core obligations

1. An annual independent bias audit

Before you use an AEDT, you must have a bias audit completed by an independent auditor within the previous year. The audit calculates selection rates and impact ratios for the groups the tool affects. It is not a one-time exercise. You need a fresh audit every year for as long as you use the tool.

Independence matters here. The auditor cannot be someone who was involved in building, selling, or using the tool, and cannot have a financial interest in it. This is a common failure point, because the most convenient party to run the numbers is often the vendor, and the vendor cannot serve as your independent auditor.

2. Public disclosure of the results

You must publish a summary of the most recent bias audit on your careers or hiring page, along with the date the tool was first used. The summary needs to be reachable by candidates, not buried in a legal appendix. The point is that anyone considering applying can see how the tool performed across demographic groups before they decide to engage.

3. Advance notice to candidates

You must notify candidates who live in New York City at least 10 business days before you use an AEDT on them. The notice has to explain that an automated tool will be used, describe the job qualifications and characteristics the tool assesses, and tell candidates how to request an alternative selection process or a reasonable accommodation.

Who does the law apply to?

Local Law 144 applies to employers and employment agencies using an AEDT to evaluate candidates or employees for a position located in New York City. The trigger is the location of the job, not the location of the company. A firm headquartered in London or Austin that hires for a role based in New York City is fully within scope.

This is why the law reaches far beyond the five boroughs. Remote-friendly companies with even a small New York presence frequently discover they are covered.

What are the penalties for non-compliance?

Penalties start at $500 for a first violation and run up to $1,500 for each subsequent violation. The important detail is how violations are counted. Each day you use a non-compliant AEDT is a separate violation, and a failure to provide the required notice is counted separately as well. A single tool used across a busy hiring quarter can generate a large stack of daily violations before anyone raises the issue.

Beyond the fines, the reputational and litigation exposure is real. A public bias audit that shows a disparate impact, or a candidate who was never told a tool scored them, can become the basis for a discrimination complaint under other laws.

How to get compliant

A workable sequence looks like this. First, inventory every tool in your hiring stack and identify which ones meet the definition of an AEDT. Most companies find at least one they did not expect. Second, commission an independent bias audit for each in-scope tool, using an auditor with no stake in the software. Third, publish the audit summary and first-use date in a place candidates can find. Fourth, build the candidate notice into your application flow so it fires automatically at least 10 business days out. Fifth, put a calendar reminder in place so the audit renews every year.

None of these steps is exotic. The friction is usually in the inventory and the independence requirement, which is where a structured compliance review pays for itself.

Frequently asked questions

Does Local Law 144 apply to companies outside New York? Yes, if the job is located in New York City. The law follows the position, not the employer's headquarters.

Can our software vendor run our bias audit? No. The auditor must be independent, with no role in building, selling, or using the tool and no financial interest in it. Vendors can supply data, but they cannot serve as your independent auditor.

How often do we need a bias audit? Every year. The most recent audit must have been completed within the prior 12 months for as long as you use the tool.

What counts as substantially assisting a decision? Producing a score, ranking, or recommendation that meaningfully drives which candidates advance. If a human rubber-stamps the tool's output, the tool is still substantially assisting the decision.

Is this the same as the EU AI Act? No. They are separate regimes with different triggers and obligations, though a well-designed audit program can satisfy elements of both. A side-by-side comparison is worth reading if you hire in both markets.

Getting compliant with Local Law 144 does not have to be a scramble. A focused compliance review will map your stack, flag every in-scope tool, and get your audit, disclosure, and notice in place before enforcement becomes your problem. If you would like a clear picture of where you stand, that is exactly the kind of check we run.