New York City adopts final rules for law enforcement’s automated employment decision tools


Received by the New York City Department of Consumer and Worker Protection (DCWP). Final regulations b 144 of Environmental Law On April 6, 2023, this landmark legislation prohibits employers from using automated employment decision tools (AEDTs) to evaluate job candidates or employees unless certain discrimination audit and notification requirements are met. Enforcement will begin on July 5, 2023.

Summary of employer’s obligations under domestic law 144

covered bodies

Employers who are physically located in New York City, or who have candidates or employees who live in the city, fall within the scope of Local Law 144. In addition, the Act also applies to “recruitment agencies”, which are broadly defined and include: Other organizations that, for a fee, provide career guidance or counseling services, provide information on job search techniques or strategies, or help applicants present their credentials to employers.

Covered AEDTs

Under Domestic Law 144, AEDT includes “any computational process derived from machine learning, statistical modeling, data analytics or artificial intelligence that provides simplified results, serves to significantly assist or replace scoring, classification or recommendations. Decision making in hiring decisions. The Act expressly excludes tools such as spam filters, firewalls, anti-virus software, calculators, spreadsheets, databases, datasets, or other datasets (1) that do not automate, support, assist, or replace decision-making processes; and (2) do not materially affect individuals.

A list of non-compliant devices that may fall within the definition of ADT includes:

  • Applicant screening and ranking or candidate stacking software.
  • Automated education and training programs.
  • Virtual training programs.
  • Boarding software.
  • Employee engagement and retention software.

Importantly, to be considered an AEDT within the meaning of the Act, such devices must “substantially assist or replace” the employer’s discretionary decision-making in hiring or promotion decisions. The final rules phrase “effectively assisting or replacing reasoned decision making”:

  • Relying only on a simple output (result, label, classification, ranking, etc.) among other factors.
  • By using a simplified output as one of a set of criteria, the simplified output is weighted more than any other criteria in the set.
  • Including human decision-making to overrule conclusions drawn from other factors using simplified output.

Unbiased audit obligations

NYC Local Law 144 prohibits an employer or employment agency from using the AEDT to make hiring or promotion decisions for a candidate in New York City unless all three of the following conditions are met:

  • AEDT is subject to a “bias audit” within one year of its use.
  • A summary of the results of the bias audit and the date the employer or hiring agency began using AEDT is posted on the employer’s or recruiting agency’s website.
  • Certain notices are given to employees or job candidates as described below.

A covered employer, employment agency, or vendor that distributes or distributes AEDT may conduct a discrimination audit, which must be completed by “independent auditors.” “Independent Auditors” means objective and independent individuals or groups that (1) are not involved in and involved in the use, development or distribution of AEDT, (2) are not at any time employed by the employer, recruitment agency or vendor of AEDT at the time of the bias audit; and (3) have no direct financial interest or material indirect financial interest in the employer, employment agency, or ADT vendor.

Discrimination audits should compare the “preference rate” and “impact ratio” for specific race/ethnicity and gender categories to the most preferred category for each race/ethnicity, gender, and intersection category. The final regulations add additional requirements for bias audits, such as race/ethnicity and gender “unknown” and publication of the number of individuals excluded from the calculations.

Advertising obligations

Local Rule 144 also requires covered employers or employment agencies to provide specific notices to employees or job candidates:

  • At least 10 days notice that AEDT will be in effect and that the candidate or employee may request an alternative selection process or accommodation.
  • At least 10 days’ notice of the job criteria and characteristics that the AEDT will use to evaluate the candidate or employee.
  • Information about the type, source and retention policy related to data collected for AEDT.


The New York City Law Department’s Corporation Counsel may enforce Local Law 144 and may fine employers or employment agencies not more than $500 on the date of the first violation and $500 to $1,500 for each subsequent violation.

Impact of the final regulations

While the final rules largely mirror the previously published rules, the final rules (1) expand the scope of the technology that can qualify as an AEDT, (2) add additional discrimination audit standards, and (3) clarify the information that must be included. It explains the bias audit and the type of information that must be disclosed in the audit summary, and (4) when an employer may rely on a bias audit conducted using historical data from other employers or employment agencies.

Looking Ahead: What Employers Can Do Now

Employers and employment agencies physically located in New York City or with job candidates or employees in the City must fall within the scope of Local Law 144 with applicant screening or employee assessment technologies currently in use or being evaluated for future use.

Many employers and employment agencies may be affected by this law; AEDT must ensure that their impartial audit and notification procedures comply with legal requirements to avoid potential penalties. For more information on artificial intelligence (AI) and automated systems used in the employment context, please read our related update.

© 2023 Perkins Coie LLP

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