Talent Acquisition Strategy
NYC Local Law 144 Compliance Checklist for AI Hiring Tools (2026)
Use this NYC Local Law 144 compliance checklist to cover AEDT scope, bias audits, candidate notice, penalties, and MeritHyre’s audit-ready tools.
Many hiring teams assume their software vendor handles NYC Local Law 144. It does not. The city puts three duties on the employer. Those are the bias audit, the public summary, and the candidate notice.
Fines run from $500 to $1,500 per violation. Each day of use can count separately. In December 2025, the State Comptroller called the city’s enforcement ineffective. DCWP committed to tightening it.
This NYC Local Law 144 compliance checklist outlines each obligation sequentially. The scope, audit, public disclosure, candidate notice, and fines are all included. The Local Law 144 sections rely on DCWP rules and its FAQ.
What Is NYC Local Law 144?
One of the first US laws pertaining to hiring AI was Local Law 144 of 2021. It is enforced by the Department of Consumer and Worker Protection (DCWP) of the city. On July 5, 2023, enforcement got underway.
An Automated Employment Decision Tool (AEDT) is software that scores or ranks candidates. NYC Local Law 144 regulates AEDTs used to screen candidates for NYC jobs. Employers need an audit, a summary, and 10 business days’ notice.
Three duties sit at the core of the law:
- Annual independent bias audit. The audit must be under a year old when you use the tool.
- Public summary. Post the audit results on the employment section of your website.
- Advance notice. Tell NYC-resident candidates 10 business days before the tool evaluates them.
The vendor holds none of these duties. They sit with you as the employer.
Does Your Hiring Tool Count as an AEDT?
Not every recruiting tool falls under the law. Scope depends on what the tool does, not what the vendor calls it.
The Three-Part Test DCWP Applies
DCWP’s FAQ sets three conditions. A tool qualifies only when all three are true:
- It uses machine learning, statistical modeling, data analytics, or AI.
- It produces a prediction or classification, such as a score or ranking.
- It substantially assists or replaces discretionary decision-making.
The phrase “substantially assists” has a specific meaning in the rules. A tool qualifies if you rely on it alone. It also qualifies if you weight it above other factors. Using it to overrule human assessments counts too. A person making the final call does not remove the tool from scope.
Common HR Tools Sorted by Scope
Use this table for a first pass. Your actual configuration decides the final answer.
|
Hiring tool |
In scope? |
Reason |
|
AI resume screener or ranker |
Yes |
Scores or ranks applicants before humans review. |
|
Conversational AI or voice screener |
Yes |
Outputs a score or fit recommendation. |
|
Predictive skills or game-based assessment |
Yes |
Classifies candidates by traits or aptitude. |
|
Automated interview scheduler |
No |
Handles logistics and evaluates no one. |
|
Boolean keyword search in an ATS |
Usually no |
Fixed filters, no learned model or score. |
|
AI sourcing tool that scans resume banks |
No, until people apply |
Covers applicants, not prospects. |
The last row surprises many teams. DCWP’s FAQ says resume bank scans and outreach fall outside the law. Coverage starts once a person applies for a specific position.
|
Are Your Screening Tools Compliant With NYC LL144? A stale audit or missed notice can cost up to $1,500 per violation. MeritHyre helps you keep standardized scoring logs and audit documentation. It also automates candidate notice workflows. |
The 2026 NYC Local Law 144 Compliance Checklist
Five steps cover the full workload. Work through them in order, because each one feeds the next.
Step 1: Map Your Tools and Your NYC Roles
DCWP applies the law to AEDT use “in the city.” That means the job sits in an NYC office at least part time. It also covers fully remote jobs tied to an NYC office. Employment agencies based in NYC are covered too.
Notice goes to candidates who live in New York City. Build a simple inventory before you do anything else:
- Tool name and vendor
- Output type, such as score, rank, or classification
- NYC roles the tool screens
- Date of the last independent audit
Step 2: Meet the NYC AI Hiring Bias Audit Requirements
The auditor must be independent. DCWP keeps no approved list, so the choice is yours. An auditor fails the test if they work for you or the vendor. The same is true if they helped build, use, or distribute the tool. A financial stake in either company also disqualifies them.
The audit must calculate these figures at a minimum:
- Selection rate or scoring rate for each category
- Impact ratio for each category
- Results by sex, by race and ethnicity, and by intersectional groups
- Counts of individuals in an unknown category
Categories under 2% of the data may be excluded from the calculations. Auditors must use historical data from real use of the tool. Test data is allowed only when history is too thin. Imputed or inferred demographic data is not allowed.
The impact ratio is one group’s rate divided by the highest group’s rate. Say Group A is selected at 40% and Group B at 28%. Group B’s impact ratio is 0.70. The EEOC’s four-fifths rule treats 0.80 as a warning level. Local Law 144 sets no pass mark. It requires the math and the disclosure.
Step 3: Publish the Audit Summary
Post the summary on the employment section of your website. A clearly labeled link to a page holding it also works. Put it where any visitor can find it.
The published summary must include:
- The date of the most recent bias audit
- The source and explanation of the audit data
- The number of individuals in an unknown category
- Applicant counts, selection or scoring rates, and impact ratios for all categories
- The AEDT’s distribution date, meaning the day you began using it
Keep it posted for at least six months after last use. A line saying “audited, no bias found” does not meet the standard.
Step 4: Send Local Law 144 Candidate Notice 10 Business Days Ahead
The notice must say you use an AEDT. It must name the job qualifications and characteristics the tool assesses. It must explain how to request an alternative process or accommodation.
Candidates can receive notice in the job posting, by email, or by mail. You may also post it on your careers page. A careers page notice does not need to be role-specific. After 10 business days live, you can use the tool for any role.
That single fact removes the worst hiring delay. Post the notice early and the clock runs while you plan. Internal promotion candidates can receive notice through a written policy.
Sample candidate notification template:
Notice of Automated Employment Decision Tool
[Company] uses an automated tool to evaluate applicants for New York City roles. The tool assesses [qualifications and characteristics, such as skills and experience]. Recruiters review its output. To request an alternative process or a reasonable accommodation, contact [email address]. Details on data type, data source, and retention are at [link]. Posted on [date].
Step 5: Prepare Data Disclosure and Accommodation Workflows
Candidates and employees can ask about the data your AEDT collects. You must share the type of data, its source, and your retention policy. Post that information on your careers page. Or answer each written request within 30 days.
Accommodation requests need a defined path too. The rule requires instructions for alternatives where available. It does not force you to build one. Federal and city disability laws may still require accommodations. Assign one owner and one inbox. Log every request with its response date.
NYC Local Law 144 Penalties and Enforcement
Fines look modest until you see how they stack. Enforcement is also becoming more active.
How the Fines Add Up
The city sets a range, and the count of violations drives the total.
|
Situation |
Penalty |
|
First violation, plus others on the same day |
Up to $500 |
|
Each later violation |
$500 to $1,500 |
|
Using an AEDT without a valid audit |
Separate violation each day of use |
|
Missing notice to a candidate |
Separate violation for each candidate |
Picture an unaudited screener running for 30 days. At the top rate, that one issue can approach $45,000. Missed notices add to the total. Discrimination claims go to the NYC Commission on Human Rights. That is a separate exposure.
Why Enforcement Risk Is Rising
The State Comptroller’s December 2025 audit reviewed how DCWP enforces the law. Reports on it say examiners checked 32 companies. They found 17 potential violations. DCWP had found one.
DCWP agreed to adopt most of the recommendations, including proactive reviews. DLA Piper advises employers to expect stricter scrutiny. A complaint is no longer the only way a problem gets found.
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Automate Local Law 144 Compliance Without Slowing Down Hiring MeritHyre tracks scoring logs and impact ratios as you hire. It also runs candidate notice workflows. Plans start at $99 per month. |
Why Vendor Assurances Do Not Protect You
Vendors often say their tool is compliant. The law puts that duty on you.
Who Carries the Liability
DCWP’s FAQ says the tool’s vendor is not responsible for the audit. Employers remain responsible. A vendor can hire an independent auditor for its product. You can rely on that audit in only two cases.
- You gave your own historical data to the auditor.
- You are using the tool for the first time.
Outside those cases, a vendor’s audit does not cover you. The vendor also cannot post your summary or send your notices.
What to Put in Your Vendor Contract
Contract terms decide how smoothly your audit goes. Ask for these items in writing:
- Candidate-level scoring logs, exportable on request
- Access for your independent auditor
- Advance notice of any model change that affects scoring
- Cooperation with audit timelines
- Clear cost terms for each annual audit
Independent bias audit hiring software still needs an independent auditor. No product removes that step.
How Local Law 144 Fits With Other AI Hiring Laws
Local Law 144 is one rule among several. Other laws take different routes to similar goals.
Side-by-Side Comparison
|
Law |
Status |
What it asks of employers |
|
Enforced since July 2023 |
Annual audit, public summary, 10 business days’ notice |
|
|
In effect since Oct. 1, 2025 |
No mandatory audit. Anti-bias testing supports a defense. Keep records for four years. |
|
|
Effective Jan. 1, 2027 |
Pre-use notice, 30-day adverse outcome explanation, human review |
|
|
Employment tools from Dec. 2, 2027 |
Risk management, documentation, logging, oversight |
What One Audit File Can Cover
An NYC audit does not satisfy the other laws. It does give you evidence they all value. California weighs testing evidence when a claim arises. Colorado’s adverse outcome explanations need scores you can explain. The EU expects logs, which stored scoring records can supply.
Build one evidence file and reuse it. Keep audit reports, scoring logs, notices, and records of human review together. Each new law then adds a small gap to close.
MeritHyre LL144 Compliance: What Is Built In
MeritHyre supports hiring teams that work under these rules. It does not replace your auditor. It supplies the data an auditor needs.
Scoring Logs Ready for Your Auditor
MeritHyre uses structured scoring models and stores each candidate’s score. Your auditor gets consistent records instead of screenshots. That cuts back-and-forth during the audit.
Notice Workflows That Trigger on Application
MeritHyre sends the notice when a candidate applies. It also tracks the 10-business-day window for each person. Pair it with a careers page notice to start the clock earlier.
Impact Ratio Tracking Between Audits
The dashboard reports impact ratios against the four-fifths benchmark. It alerts hiring managers when a group drops below 0.80. You can catch model drift months before the annual audit. Internal monitoring supports the independent audit but does not replace it.
Governance for Smaller Teams
Compliance tools often assume an enterprise budget. MeritHyre plans start at $99 per month. That puts audit-ready records within reach of smaller teams.
Frequently Asked Questions About NYC Local Law 144
These answers cover the questions employers raise most often. Each one follows DCWP’s published guidance.
Yes, when the job is tied to an NYC office. DCWP covers jobs at an NYC office. That includes remote roles tied to one. Notice goes to NYC-resident candidates. Edge cases deserve a quick check with employment counsel.
No. The auditor must be independent, so vendor staff cannot audit their own product. A vendor can hire an outside auditor, though. You may rely on that audit in two cases. You supplied your own data, or you are a first-time user.
The four-fifths rule compares selection rates between groups. It comes from EEOC guidance.
- Divide each group's rate by the highest group's rate.
- A result below 0.80 signals possible adverse impact.
- The law requires reporting, not a pass mark.
Your notice must explain how to request an alternative process or accommodation. Set up a simple path:
- One named owner and inbox
- A log with request and response dates
- A human review option where feasible
Usually no. A fixed rule like "three or more years" uses no machine learning. It produces no score. A model that ranks candidates by experience likely qualifies as an AEDT.
At least every 12 months. An audit expires one year after it is done. Refresh the summary with each new audit. Keep it posted for at least six months after last use.
No. The law requires the audit and the disclosure. It sets no required action based on results. Anti-discrimination laws still apply, so a low impact ratio invites scrutiny. Fix the tool or consult counsel.
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Build an Audit-Ready AI Hiring Pipeline Today Meet NYC LL144 duties while you prepare for California and Colorado rules. MeritHyre automates candidate screening with audit records built in. |
Where to Start This Week
Start with the tool inventory. It takes an afternoon and shows exactly which tools the law reaches. Every later step depends on that list.
Then book an independent auditor early. Post your candidate notice early so the 10-business-day clock starts running. Publish the audit summary the day it is final.
Treat this NYC Local Law 144 compliance checklist as a yearly routine. Employers who do usually face fewer surprises. The work also builds candidate trust. People who see a clear notice know how the process works. MeritHyre supplies the records, notices, and monitoring that keep it simple.
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