NYC Local Law 144 and AI Hiring Audits: A Plain-English Guide

New York City’s Local Law 144 was the first U.S. law to require independent bias audits of the automated tools employers use to screen candidates (Illinois had already regulated AI video interviews since 2020, but not with an audit mandate). Enforcement began July 5, 2023, and it’s become the template other jurisdictions borrow from. If you hire in NYC and use a tool that substantially drives who advances, it likely applies to you. Here is the plain-English version.

What the law covers

The law regulates automated employment decision tools (AEDTs) — software that uses machine learning, statistical modeling, or AI to substantially assist or replace a hiring or promotion decision. Think resume rankers, scored assessments, and AI interview scorers. A tool counts if its output is a major factor in the decision, not just one small input a human weighs among many.

A plain spreadsheet formula or a simple pass/fail rule generally isn’t an AEDT. A model that scores and ranks candidates generally is. The gray area — “how much did the tool substantially assist?” — is where most of the compliance argument lives.

Who it applies to

Employers and employment agencies using an AEDT to screen a candidate or employee for a position located in New York City. It’s the job’s location that matters, so remote roles based out of an NYC office can be covered even if the applicant is elsewhere.

What employers must do

Three obligations, all before you use the tool:

1. Get an independent bias audit — conducted by an independent auditor, no more than one year old. The audit computes selection rates and impact ratios across sex, race/ethnicity, and their intersectional categories (a four-fifths-style impact-ratio analysis). See our guide on how a real bias audit works.

2. Publish a summary of the audit results on your careers or website — publicly available, including the selection rates, impact ratios, the date the tool was put into use, and the number of individuals it assessed.

3. Notify candidates at least 10 business days before using the tool. The notice must say that an AEDT will be used, what job qualifications and characteristics it assesses, and — on request — the data source and retention policy. Candidates can request an alternative process or accommodation, though the law doesn’t force employers to grant an alternative.

What it doesn’t do

It’s worth being precise about the limits, because the law is narrower than the headlines suggested:

• It doesn’t ban biased tools. It requires you to audit, publish, and notify. A tool with a poor impact ratio isn’t automatically illegal under 144 — though it may expose you under other anti-discrimination laws (Title VII, the NYC Human Rights Law).
• The penalties are modest per violation — civil penalties of up to $500 for a first violation and $500–$1,500 for each subsequent one, with each day of use counting separately. The reputational and discrimination-suit exposure usually dwarfs the fine.
• The audit is a snapshot. It reflects the data it was run on. Your live applicant pool can produce different impact, which is why re-auditing on your own deployment matters.

The bigger picture

Local Law 144 is the leading edge, not the whole map. Illinois regulates AI video interviews specifically. Colorado’s AI Act (effective 2026) imposes broader duties on developers and deployers of high-risk AI systems, including hiring. The EU AI Act classifies hiring and worker-management AI as “high-risk,” with conformity and transparency obligations. And U.S. federal agencies have signaled that existing anti-discrimination law already applies to algorithmic hiring, audit or no audit.

The practical takeaway for an HR team: if you use a tool that scores or ranks candidates, assume you owe someone an audit, a public disclosure, and candidate notice — and that the list of someones is growing every year. Build the audit and notice into procurement now, rather than retrofitting it after a complaint.