NYC Local Law 144, enacted in 2021 and enforced since July 5, 2023, requires employers to conduct annual independent bias audits of automated employment decision tools (AEDTs) used in hiring and promotion decisions. This article provides practical guidance on preparing for a bias audit, classifying whether your tools qualify as AEDTs, and understanding the documentation an independent auditor will need.
What This Means
NYC Local Law 144 regulates the use of automated employment decision tools (AEDTs) in employment decisions for positions located in New York City. The law applies to any employer or employment agency using an AEDT to evaluate candidates or employees for hiring or promotion. The employer does not need to be headquartered in New York City; if you are hiring for a remote role and a candidate resides in any of the five boroughs, the law applies to that evaluation. An AEDT is defined as any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that substantially assists or replaces discretionary decision-making for employment decisions. This definition is broad enough to cover resume screening tools, candidate ranking systems, video interview analysis platforms, and any other algorithmic system that influences who gets hired or promoted. The law requires three core obligations: an annual independent bias audit, publication of a public summary of the audit results, and advance notice to candidates and employees before using the AEDT. This article focuses on the first obligation: preparing for the independent bias audit. The other two obligations are covered in related resources on this site. It is important to understand that LL144 is a local law, not federal legislation. It is enforced by the NYC Department of Consumer and Worker Protection (DCWP). A December 2025 audit by the New York State Comptroller found significant deficiencies in DCWP's enforcement infrastructure, including misrouted complaints and limited proactive investigation. However, DCWP has committed to implementing the Comptroller's recommendations, and employers should not assume that past enforcement gaps will continue indefinitely. For employers also hiring in the European Union, the EU AI Act (Regulation (EU) 2024/1689) adds an additional layer. AI systems used in recruitment are classified as high-risk under Annex III, Category 4. The compliance requirements under the EU AI Act are substantially broader than LL144's bias audit alone. Readiness work for LL144 can support EU AI Act compliance, but it does not satisfy it.
Key Requirements
Independent Auditor.
The bias audit must be conducted by an independent auditor who has no financial interest in the AEDT being evaluated. This means the vendor that developed or sells the tool cannot conduct the audit for its own product. The independence requirement is strict and non-negotiable. Employers should verify the auditor's independence in writing before engaging their services.
Disparate Impact Testing.
The audit must test for disparate impact across race, ethnicity, and sex categories. The categories required are not limited to simple binary classifications. The DCWP rules require testing across intersectional categories, meaning the analysis must examine outcomes for combinations such as Hispanic women, Black men, and Asian women, not just race or sex in isolation.
Selection Rate and Impact Ratio.
The audit must calculate the selection rate for each demographic category and the impact ratio for each category compared to the most selected category. The impact ratio is calculated by dividing the selection rate of a given category by the selection rate of the most selected category. These metrics are central to understanding whether the tool produces statistically significant disparities.
Annual Frequency.
The bias audit must be completed no more than one year before the AEDT is used. If you use the tool continuously throughout the year, you need a fresh audit at least annually. Using an audit that is more than one year old is a violation of the law. Employers should build audit scheduling into their annual compliance calendar.
Public Summary.
After the audit is completed, the employer must publish a summary of the results on the careers or jobs section of its website. The summary must include the date of the audit, the distribution of categories considered, and the selection rates and impact ratios. The public summary requirements are detailed in a separate guide on this site.
Candidate Notice.
Employers must notify candidates at least ten business days before using an AEDT. The notice must describe how the tool will be used and what data will be collected. Candidates must also be informed of their right to request an alternative selection process or accommodation. This notice obligation is separate from the audit requirement but is part of the same compliance framework.
Practical Steps
Conduct Classification Support.
The first step in readiness is determining whether your tool qualifies as an AEDT under LL144. Not every software tool used in recruiting is an AEDT. A tool that only automates administrative tasks, such as scheduling interviews or sending form emails, likely does not qualify. A tool that scores, ranks, or selects candidates based on algorithmic analysis does qualify. If the tool uses machine learning or statistical modeling to evaluate candidates, it almost certainly qualifies. Document your classification rationale.
Review Documentation.
Assemble all documentation related to the tool: technical specifications, vendor descriptions, model cards, training data documentation, and intended use cases. The independent auditor will need to understand how the tool works, what data it processes, and what outputs it produces. If your vendor has not provided this documentation, request it now. If the vendor cannot or will not provide it, this is a significant red flag.
Coordinate with Vendors.
Vendors often hold critical information about how their tools function. Ask your vendor whether they have conducted internal bias testing, what methodologies they used, and whether they can provide independent audit support. Note that vendor internal testing does not satisfy the independence requirement, but it can inform the independent auditor's work. Request vendor documentation on demographic categories, selection rates, and any known limitations.
Prepare Workflow Advisory.
Map the exact workflow through which the AEDT influences employment decisions. Does it produce a score that human recruiters review? Does it automatically reject candidates below a threshold? Does it rank candidates for interview slots? The audit must evaluate the tool as it is actually used, not as it is theoretically described. Accurate workflow mapping helps the auditor design appropriate tests.
Plan the Timeline.
Independent bias audits take time. Data collection, vendor coordination, auditor scheduling, and report writing can take several weeks or months. Build the audit into your annual compliance calendar. If your current audit is approaching its one-year expiration, begin the renewal process at least two months in advance. Waiting until the last minute increases the risk of a compliance gap.
Consult Qualified Counsel.
Related Resources
HR AI Compliance
EU AI Act vs NYC Local Law 144
Frequently Asked Questions
What is an AEDT under NYC Local Law 144?
An automated employment decision tool (AEDT) is any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that substantially assists or replaces discretionary decision-making for employment decisions in New York City. This includes tools used for screening, ranking, or evaluating candidates and employees for hiring or promotion.
Who can conduct an independent bias audit under LL144?
An independent auditor must have no financial interest in the AEDT being evaluated. The auditor cannot be the vendor that developed the tool or any entity with a financial stake in the tool's sale or deployment. The auditor must test for disparate impact across race, ethnicity, and sex categories, including intersectional analysis.
What happens if an employer fails to conduct a bias audit?
The NYC Department of Consumer and Worker Protection (DCWP) can enforce violations with civil penalties. Each day a violation continues may constitute a separate violation. While DCWP enforcement has historically been limited, a December 2025 Comptroller audit found significant deficiencies and recommended more proactive enforcement. Employers should not rely on past enforcement patterns as an indication of future risk.
Can a vendor's internal audit satisfy LL144 requirements?
No. LL144 explicitly requires an independent audit, meaning the auditor must have no financial interest in the AEDT. A vendor's own internal testing, regardless of methodology, does not satisfy this independence requirement. Employers must engage a separate, qualified third party to conduct the audit. Assess Your LL144 Readiness Our free AI Regulatory Readiness Assessment evaluates your exposure under LL144 and related frameworks across 43 controls.