Local Law 144 (AI Hiring Tool Regulation) - Compliance Guide

· About Automated Employment Decision Tool Law (AEDT)

Key Takeaways

  • New York City Local Law 144 applies to employers and employment agencies that use an automated employment decision tool to screen candidates or employees for hiring or promotion decisions in the city, and it requires a bias audit plus advance notices before use.[7][1]
  • The law took effect on 1 January 2023, and the city’s Department of Consumer and Worker Protection began enforcement on 5 July 2023 after final rules were issued.[1][8]
  • Covered users must ensure the AEDT has been subject to a bias audit no more than one year before use and must make a summary of the most recent audit publicly available on their website before using the tool.[7][1]
  • Covered users must notify each affected candidate or employee in New York City at least 10 business days before using the AEDT and explain the job qualifications and characteristics the tool will assess.[7]
  • Noncompliance can trigger civil penalties, including $375 for a first violation and at least $500 for each subsequent violation, up to $1,500 total per violation under the implementing guidance summarized by counsel.[5]
  • No 2025–2026 amendment or enforcement delay appears in the official city materials reviewed here; the law remains in force and the city’s FAQ was updated in 2026.[1][3]

What It Is

New York City’s AEDT regime is Local Law 144 of 2021, a city employment law that regulates the use of automated tools in hiring and promotion decisions.[7][3] It is enforced by the New York City Department of Consumer and Worker Protection (DCWP).[1][3]

The law defines an automated employment decision tool as a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues a simplified output, such as a score, classification, or recommendation, and is used to substantially assist or replace discretionary decision-making in employment decisions.[7]

Key dates are as follows: the law was enacted in 11 December 2021; it took effect on 1 January 2023; and DCWP began enforcement on 5 July 2023 after publishing final rules.[7][1][8]

The official city FAQ still states in 2026 that employers and employment agencies must comply with the bias-audit and notice requirements when using AEDTs in New York City.[1][3]

Who Must Comply

The law applies to employers and employment agencies using AEDTs to screen a candidate or employee for an employment decision in New York City.[7][3] The trigger is use in connection with hiring or promotion decisions, not mere possession of AI software.[7]

The law has an extraterritorial effect only through the individual’s residence in New York City and the employment decision context described in the statute and rules; the notice obligation in the council text refers to candidates or employees who reside in the city.[7] In practice, companies outside the city may be covered if they use the tool for covered decisions involving NYC candidates or employees.[7][1]

The law is not a general AI governance statute and does not apply to every algorithmic tool; it applies to tools that meet the AEDT definition and are used to substantially assist or replace discretionary decision-making.[7] The city guidance also indicates that employers should determine whether a tool is actually an AEDT before compliance duties attach.[1][3]

The city materials reviewed here do not describe a broad business-size exemption, and the rule text and FAQ focus on function and use rather than employer headcount.[1][3][7] If a tool is not an AEDT, or if it is not used for a covered employment decision in New York City, the local law does not apply.[7][1]

Core Requirements

  1. Bias audit before use — The AEDT must be subject to a bias audit conducted no more than one year before the tool is used, and the employer or employment agency may not use or continue to use the tool if more than one year has passed since the most recent audit.[7][11]
  2. Public audit summary — A summary of the most recent bias audit and the date of distribution of the audited tool must be made publicly available on the employer’s or agency’s website before the tool is used.[7][11]
  3. Advance notice — A covered user must provide each affected NYC candidate or employee with notice at least 10 business days before using the AEDT in the assessment or evaluation.[7][5]
  4. Explain what the tool assesses — The notice must describe the job qualifications and characteristics that the AEDT will use in the assessment, so the affected person can understand the scope of the evaluation.[7][1]
  5. Accommodation or alternative process information — The notice must inform the candidate or employee that they may request an alternative selection process or reasonable accommodation.[7][5]
  6. Website disclosures on data use — City guidance and 311 materials state that employers must post notice about the type and source of data used for the tool and the data retention policy on their website.[4][1]
  7. Recordkeeping and defensibility — While the law’s text is most explicit on audit and notice duties, the practical compliance file should retain the audit, vendor materials, notice templates, and publication evidence to defend enforcement inquiries.[1][7]

Deadlines and Penalties

| milestone | date | what applies | |---|---:|---| | Law enacted | 11 December 2021 | Local Law 144 was enacted.[7] | | Law in force | 1 January 2023 | The statutory effective date began.[7] | | Enforcement begins | 5 July 2023 | DCWP started enforcement after final rules.[1][8] | | Audit currency | Before each use, with audit no more than 1 year old | No use or continued use if the audit is older than one year.[7][11] | | Notice timing | At least 10 business days before use | Candidate or employee notice must precede use by the required period.[7] |

Civil penalties reported in city-linked guidance and practitioner analysis include $375 for a first violation and at least $500 for each subsequent violation, capped at $1,500 per violation.[5] The city also allows complaint-based enforcement, and the 311 guidance says suspected violations can be reported to DCWP.[4]

Other sanctions can include compelled compliance, investigation, and reputational harm from public notice failures, because the city materials tie lawful use to public audit posting and advance disclosure.[1][4]

How to Comply

  1. Inventory every hiring and promotion workflow that uses scoring, ranking, classification, recommendation, or similar automated output, and determine whether the tool is an AEDT under the city definition.[7]
  2. Classify the decision scope for each tool, mapping where NYC candidates, employees, or residents are affected, and document whether the tool is used to substantially assist or replace discretion.[7][1]
  3. Obtain an independent bias audit no more than one year before use, and require the auditor to test the tool and provide a report suitable for public summary.[7][11]
  4. Publish the required summary and notices on the employment section of the website and in candidate-facing communications before use, keeping evidence of publication and delivery.[1][11]
  5. Build a 10-business-day notice workflow into requisition and hiring timelines so the tool is not activated until the notice period has expired.[7][5]
  6. Align controls to ISO 27001 for vendor management, access control, change management, logging, and evidence retention, because those controls support governance around model and data integrity.[1]
  7. Map governance to NIST CSF 2.0 by using its identify-govern-protect-detect-respond-recover structure to assign ownership, monitor tool changes, and track incidents affecting assessment fairness.[1]
  8. Adopt ISO 42001-style AI management system practices for policy, risk assessment, human oversight, lifecycle review, and corrective action, especially where the employer deploys multiple AI tools in HR.[1]

Related Regulations

  • EEOC Title VII guidance overlaps because AEDT bias can create employment discrimination risk even when a local AI notice rule is followed.
  • NYC Human Rights Law may conflict in practice if automated screening produces disparate impact against protected classes, so AEDT compliance does not replace broader anti-discrimination duties.
  • Illinois AI Video Interview Act is narrower but similar in requiring notice and regulation of AI-assisted hiring, making it a useful benchmark for multi-state employers.
  • Colorado AI Act is broader and state-level, so employers operating nationally must avoid assuming NYC’s disclosure rules are the only AI hiring obligations.
  • EU AI Act is the closest overseas analogue for high-risk employment systems, but it imposes a more comprehensive governance framework than Local Law 144.

FAQ

Does NYC’s AEDT law apply to companies outside New York City?

Yes, if the company is an employer or employment agency using an AEDT for a covered employment decision involving an affected candidate or employee in New York City.[7][1] The law is city-based, but the compliance burden follows the use case, not only the company’s headquarters.

What counts as an automated employment decision tool?

The law covers a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues a simplified output, such as a score, classification, or recommendation, and is used to substantially assist or replace discretionary decision-making.[7] A plain HR software system without that function is not necessarily covered.[1][7]

How old can the bias audit be?

The audit must be conducted no more than one year before the AEDT is used.[7][11] If more than one year has passed, the tool may not be used or continued to be used until a new audit is completed.[11]

How much notice must candidates or employees receive?

The city’s rule and statutory text require at least 10 business days of notice before the AEDT is used.[7][5] The notice must also explain the relevant qualifications and characteristics evaluated by the tool and tell the person how to request accommodation or an alternative process.[7][1]

What are the penalties for noncompliance?

Reported civil penalties start at $375 for a first violation and at least $500 for subsequent violations, with a cap of $1,500 per violation in practitioner summaries of the rule.[5] In addition, DCWP can investigate complaints and require correction of deficient notices or missing audits.[4][1]

Has the law been delayed or amended in 2025–2026?

The official NYC FAQ and city AEDT page reviewed here still describe the same core requirements and enforcement posture in 2026, with no identified delay or substantive amendment in the city materials found.[1][3] If a vendor or employer is relying on a claimed exemption or later relaxation, that claim should be checked against the current city text and rules before use.[1][7]

Sources

Put it into practice

More compliance guides