NYC Local Law 144 AI Hiring Audits: Two Years of Enforcement and What Employers Must Know Now
New York City Local Law 144 of 2021 took effect on July 5, 2023, making New York the first U.S. jurisdiction to regulate automated employment decision tools (AEDTs) with mandatory annual bias audits and public disclosure requirements. Two years in, the Department of Consumer and Worker Protection (DCWP) has shifted from guidance-issuing mode to enforcement mode — and the penalties, while not yet enormous, signal a more aggressive posture ahead.
The law covers any employer or employment agency that uses an AEDT to "substantially assist or replace" discretionary decisions about hiring or promotion of candidates and employees in New York City. An AEDT is broadly defined as a computational process derived from machine learning, statistical modeling, data analytics, or AI that issues simplified output — including scores, classifications, or recommendations — used in employment decisions. If your company uses resume-screening software, video interview scoring tools, or predictive hiring platforms for NYC-based roles, LL 144 almost certainly applies.
The core obligation has two prongs. First, the employer must obtain a bias audit from an independent auditor before deploying the tool and annually thereafter. The audit must calculate selection rate disparities across sex, race/ethnicity, and intersectional categories, comparing the AEDT's output rates across groups. Second, the employer must publish a summary of the most recent audit on its website, along with the data used to conduct it. Candidates and employees must receive advance notice — at least ten business days — that an AEDT will be used, along with an explanation of the tool's role in the process and an opportunity to request an alternative selection process or reasonable accommodation.
DCWP's 2025 enforcement actions have targeted several recurring failures. The most common: employers posting audit summaries that omit required data fields, particularly intersectional category breakdowns. A second pattern is notice failures — either providing notice fewer than ten days before assessment or burying the disclosure in dense application terms rather than delivering it as a standalone communication. Third, some employers have commissioned audits from vendors who are not sufficiently independent because they also sold or developed the AEDT being audited. DCWP has signaled that this structural conflict alone can invalidate an otherwise technically compliant audit.
For employers that have deployed AEDTs for multiple job categories, a critical issue is whether a single audit covers the tool across all uses. DCWP guidance clarifies that the audit must be job-category-specific — a single generic audit of a platform's overall scoring model does not satisfy the requirement if the tool is being applied to distinct candidate pools with different baseline qualifications. Separate audits, or at minimum separate scoring-category analyses, are expected.
Penalties under LL 144 run up to $1,500 per violation per day for employers with fewer than ten violations and up to $500,000 annually for larger-scale noncompliance. DCWP has the authority to issue civil penalties after a notice of violation and a hearing opportunity. Private right of action under the law does not exist, but plaintiffs' counsel have begun using audit failures as predicate facts in broader discrimination claims under the New York City Human Rights Law.
Employers should audit their vendor relationships now, confirm independence of any auditors used, and verify their notice workflows. The next DCWP enforcement cycle is expected to expand scrutiny to internal AI-built tools — not just commercial off-the-shelf products — which will significantly widen the population of covered employers.