NYC LL144 AEDT Bias Audit Readiness

NYC Local Law 144 of 2021 is a municipal law that requires employers and employment agencies using automated employment decision tools (AEDTs) in New York City to conduct annual independent bias audits, provide notice to candidates and employees, and publish summary results. The law became enforceable on July 5, 2023. It is a municipal law, not a federal or state law, and applies within the City of New York.

The law reflects a growing trend toward regulating AI in employment contexts. Its requirements are specific to New York City and may interact with other obligations, including federal anti-discrimination laws, state privacy laws, and the EU AI Act for organizations that also operate in Europe. Lexara Advisory provides readiness support for organizations navigating these overlapping requirements.

LL144 may apply if your organization uses an AEDT in New York City for hiring or promotion decisions. The applicability depends on whether the tool meets the statutory definition of an AEDT, whether it is used to substantially assist or replace discretionary decision-making, and whether the decisions affect candidates or employees in New York City. The law applies to employers and employment agencies.

Organizations with remote hiring practices, multi-state operations, or vendor-provided tools should examine whether their tools trigger LL144 requirements. The applicability analysis must consider the specific tool, the employment decisions it supports, and the geographic scope of its use. Lexara Advisory provides classification support to help organizations assess whether LL144 may apply to their specific tools and circumstances.

LL144 requires an annual independent bias audit of each AEDT used in New York City. The audit must be conducted by an independent auditor and assess whether the tool has a disparate impact on candidates or employees based on sex, race, or ethnicity. The audit must examine the tool's selection or scoring rates across demographic groups.

The exact requirements for a bias audit depend on the specific tool and the data available. LL144 does not prescribe a single methodology, and the adequacy of any audit methodology depends on the specific circumstances of the tool being audited. Organizations must also consider that demographic data may not always be available, and the law recognizes certain limitations in data collection. Lexara Advisory provides audit workflow advisory to help organizations understand the audit requirements that may apply to their tools.

A selection rate measures the proportion of candidates from a demographic group who pass a screening or assessment stage and advance to the next stage. A scoring rate measures the proportion of candidates from a demographic group who receive a score above a threshold that advances them in the process. These rates are used to evaluate whether a tool produces different outcomes across demographic groups.

An impact ratio compares the selection or scoring rate of one demographic group to that of the highest-performing group. For example, if the selection rate for female candidates is 40% and the selection rate for male candidates is 50%, the impact ratio for female candidates would be 0.80 (40/50). Impact ratios are used to assess whether a tool produces disparate outcomes across groups.

The interpretation of impact ratios depends on the specific context, the size of the candidate pool, and the statistical significance of the difference. An impact ratio below a certain threshold may suggest disparate impact, but the threshold is not fixed in the law and depends on the specific circumstances. Lexara Advisory provides audit workflow advisory to help organizations understand how impact ratio analysis may apply to their specific tools.

Lexara Advisory's audit readiness workflow includes: AEDT classification support to determine whether specific tools may be subject to LL144; documentation review to assess whether existing vendor documentation, notice practices, and data collection are adequate for audit purposes; audit workflow advisory to help organizations understand the independent audit requirements that may apply to their tools; and ongoing monitoring to track changes in tools, data, or legal requirements that may affect LL144 applicability.

Lexara Advisory provides readiness support, documentation review, classification support, and audit workflow advisory for organizations navigating NYC Local Law 144. We do not conduct official bias audits, provide guaranteed compliance, or offer regulator-approved certification. Our role is to help organizations understand the requirements that may apply to them, assess their current documentation and practices, and build a roadmap for audit readiness.

LL144 is a municipal law with specific requirements that depend on the specific tool, the specific employment process, and the specific circumstances of its use. The information on this page is for advisory purposes and does not constitute legal advice. Organizations should consult qualified legal counsel for matters specific to their situation.